Adjustments

Question 1

What does earnings mean

Answer 1

It’s means that we receive compensation in exchange for having done something

Question 2

What does incurred mean

Answer 2

Incurred cost means to loose money ,owe money or having to pay money as a result of doing something

Question 3

What is Accrued income

Answer 3

Income that have been earned but not yet received

This is owed to the business and therefore is an ASSET

Question 4

What is accrued expense

Answer 4

Expense that has been incurred but not yet paid.

This is owing and therefore is a LIABILITY

Question 5

What is deferred income

Answer 5

Income which has been receive in advance but not gets earned.

We received mint for something we have not yet earned therefore it’s a LIABILITY

Question 6

What is prepaid expense

Answer 6

Expense each have as been paid but not yet incurred. We have paid for something that we did not yet use therefore it’s an ASSET