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What the difference between the deferred expense and the accrued expense?

a. deferred expense is a liability, and accrued expense is an asset. b. deferred expense is an asset, and accrued expense is a liabilty. c. deferred expense is a liability, and accrued expense is a liability. deferred expense is an asset, and accrued expense is an asset.

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Question added by Almutaz Bakry Sidahmed , Internal Audit Manager , Banan real estate
Date Posted: 2014/05/17
Upvote (1) Views (50) Followers (27) Answers (26) Report Question
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Shamik Sinha
by Shamik Sinha , SENIOR MANAGER AUDIT , M/S MADHUSUDHANA REDDY & CO, Chartered Accountants

Deferred means delayed and accrued means earned in layman's language. 

Suppose, your current Financial Year is from Jan 16 to Dec 16. You have paid $2000 to an Advertising Agency in the month of July for a year-long advertisement contract of your business starting from July 16 to Jun 17. You can clearly realize that whole $2000 is not related with your current Financial Year. The amout to the extent relatable to current FY is booked as expenses in the current FY and balance amount is deferred or delayed to be booked as expenses in next Financial Year.

Accrued expenses are those expenses you are liable to pay in cash but haven't paid it yet. Suppose, for a month you have received your Telephone Bill of $20 which will be paid by you in the next month. Such expenses which you have incurred and liable to pay but not yet paid are booked as accrued expenses till the time of actual payment.

Abdallah Khadrawi (CPA candidate)
by Abdallah Khadrawi (CPA candidate) , Finance Manager , Humanity & Inclusion

  • An accrued expense is a liability that represents an expense that has been recognized but not yet paid.
  • A deferred expense is an asset that represents a prepayment of future expenses that have not yet been incurred.
  • Oftentimes an expense is not recognized at the same time it is paid. This difference requires a business to record either an asset or liability on its balance sheet to reflect this difference in timing.

Rashad Moursi
by Rashad Moursi , Finance Director & Business Development, International Business Transformer Owners Repr. - Hotels , Investment and financial

b. deferred expense is an asset, and accrued expense is a liabilty.

Abdullah Althamier
by Abdullah Althamier , Financial analyst , The O'Neill Student Investment Fund

Deferred expense is as an asset until it consumes.

Accrued expense is a liability.

Joewell Reyes
by Joewell Reyes , Senior General Accountant , Khusheim Co

deffered epenses isa n asset thats representing pre payment of future expenses thats not yet inccured, while accrued expenses is a liability representing recognize expenses but not yet paid

Mohammad Monirul Islam
by Mohammad Monirul Islam , Head Of Finance , Universal Health Services & Research Ltd.

Accrued expenses are those liabilities that have built up over time and are due to be paid. Accrued expenses are considered to be current liabilities because the payment is usually due within one year of the date of the transaction. Accounts payable are current liabilities that will be paid in the near future.

mashael alabdullah
by mashael alabdullah , Managing Editor , kuwait university

accrual is used to bring forward an accounting transaction into the current period for recognition, while a deferral is used to delay such recognition until a later period

sankalp joshi
by sankalp joshi , Account Manager , SAMPANN

Both accounts payables and accrued expenses are liabilities. Accounts payable is the total amount of short-term obligations or debt a company has to pay to its creditors for goods or services bought on credit. ... However, accrued expenses are those bills in which an invoice or bill has not yet been received

Harish Kumar Tiwari
by Harish Kumar Tiwari , CSDP Accounts Payable Assistant , High Commission of Canada in India

accrued expense are the expense already incurred but yet to be paid.

deferred expense is an asset that represents a payment towards an expense which is still not due.

Umesha Tungayya
by Umesha Tungayya , Sr. Accounts Executive , Tafe Access Limited

Accounts payable refers to payment to vendors who have already supplied you goods or services, the essence of sale being completed for them. Accrued expenses payable refers to expenses services for which have already been consumed but the due date for paying has not yet arrived. For eg. Interest payable, Rent payable etc.

Abdulrahman UmmerFarook
by Abdulrahman UmmerFarook , Associate Portfolio Manager , Square Yards Real Estate LLC

Accruals are earned revenues and incurred expenses that have yet to be received or paid. Accounts payable are short-term debts, representing goods or services a company has received but not yet paid for. Accounts payable are a type of accrued liability.

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