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Expenses paid in advance require what type of adjusting entry?

1. Accrual

2. Deferral

3. Other 

 

Accounting Financial Reporting Financial Accounting Accounting and Finance
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Question ajoutée par Mehboob Ali Laghari , Social Mobilization Team Incharge , TRDP-European Union
Date de publication: 2015/08/08
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Muhammad Adil
par Muhammad Adil , Manager Accounts , Gul Ahmed CG Limited

When expenses have incurred and have to pay it will be recorded as accrued expenses. When expenses not incurred and paid in advance, it will be treated as your current asset and would be accounted for on deferral basis.

Ahmed Abdi Mahad
par Ahmed Abdi Mahad , Director of Internal Auditing Directorate , Jigjiga University

Deferred expense is deferred asset and accrued expense is accrued liability. So, expense paid in advance is deferred asset. So, choice #2, deferral is the answer for this question.

Utilisateur supprimé
par Utilisateur supprimé

2. Deferral ..,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

Imdad Hussain Rajput
par Imdad Hussain Rajput , Assistant Sales Manager , Forego

Deferral.........................................................

Said Shaban
par Said Shaban , Accountant , Tri State Materials Testing

The correct answer is:  2- Deferral

Cash paid before expense is incurred: Deferred expense .

 

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