Chapter 7 (Expenses)

Expenses are _____________ in the operation of a business to earn income in the same period.

• costs incurred

• other expenses

• cost of sales

• amount earned

According to _____________ theory, expenses should be recognised in the period the services have been used, regardless of whether they have been paid or not.

• Matching

• Historical cost

• Accrual basis of Accounting

• Monetary

___________ is the total cost price of goods that have been sold.

• Cost of Sales

• Other Expenses

• Expenses Payable

• Prepaid Expenses

The ​_____ theory states that expenses incurred during the operation of a business to generate revenue and other income must be ​matched against revenue and other income earned in the same period.

• monetary

• historical cost

• revenue recognition

• matching

Expenses that are paid in advance before the services are used are known as _________ .

• other expenses

• expenses payable

• prepaid expenses

• cost of sales

______ are other costs incurred during the operation of a business to earn income.

• Prepaid Expenses

• Expenses payable

• Other expenses

• Cost of sales

When businesses have incurred the expenses but has not paid for them yet, it is known as ________ .

• other expenses

• expenses payable

• cost of sales

• prepaid expenses

Rent expense, utilities bill, salaries, insurance expenses are examples of _________ .

• cost of sales

• other expenses

• expenses payable

• prepaid expenses

On the financial year ended 31 March 2023, the business had owed its employees wages of $5 800. Select the correct journal entry to record this transaction.

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Select the correct journal entry to be recorded on 1 April 2023 (beginning of next financial year) for the reversal of the wages payable of $5 800.

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