Accounting chapter 11 (Accrued and Prepaid)

Question 1

Define Accrued expense

Answer 1

Expenses that should have been paid within the accounting period but still haven’t paid yet

Question 2

What category does Accrued expense fall into?

Answer 2

Current liability

Question 3

Define prepaid expenses?

Answer 3

A prepaid expense is an expense paid during the financial year which relates to a future accounting period. It is an amount paid in advance.

Question 4

What category does prepaid expense fall into?

Answer 4

Current asset

Question 5

Define Accrued income?

Answer 5

Accrued income is income relating to a particular accounting period which has not been received at the end of the period

Question 6

What category does Accrued income fall into?

Answer 6

Current asset

Question 7

Define Prepaid income?

Answer 7

Income received during a financial year which relates to a future accounting period.

Question 8

What category does Prepaid income fall into?

Answer 8

Current liability