Adjustments To Ledgers Flashcards
1
Q
What is an accrued expense?
A
An expense that has not been paid in full by the end of the financial year
2
Q
What is a prepaid expense?
A
An expense that is over paid by the end of the financial year
3
Q
What is irrecoverable debt?
A
When a trade receivable is unable to pay their debt.
4
Q
What causes irrecoverable debt?
A
Insolvency of a trade receivable
5
Q
What is depreciation?
A
The value a non-current asset loses over time
6
Q
Why do assets depreciate?
A
. Wear and tear
. Obsolescence
. Inadequacy
. Depletion
