WorksheetsAccrued and Prepaid (Intro)
Total questions: 10
Worksheet time: 10mins
What is a prepaid expense?
An expense paid after the service is received
An expense paid in advance before the service is received
An unpaid expense
A revenue that has not yet been earned
Which of the following is an example of a prepaid expense?
Wages payable
Interest expense
Rent paid in advance
Accounts receivable
Prepaid expenses are recorded in which section of the statement of financial position?
Current liabilities
Non-current liabilities
Current assets
Non-current assets
What is an accrued expense?
An expense that has been paid in advance
An expense that has been incurred but not yet paid
A liability that has been settled
A revenue that has not yet been earned
Which of the following is an example of an accrued expense?
Interest earned but not received
Rent paid in advance
Salaries incurred but not yet paid
Cash received before service is provided
Under accrual accounting, expenses are recorded when:
They are paid
They are incurred, regardless of payment
The cash is received
The invoice is sent
How is a prepaid expense treated over time?
It becomes an expense as the benet is received
It is always treated as an asset
It remains a liability until paid
It is written off immediately
Accrued expenses are typically listed in which section of the statement of financial position?
Current assets
Current liabilities
Non-current assets
Non-current liabilities
A company received $1000 of utilities but the bill will not be paid until January. What would be the adjusting entry?
Debit Cash, Credit Utilities Expense
Debit Utilities Expense, Credit Accounts Payable
Debit Prepaid Utilities, Credit Cash
Debit Utilities Expense, Credit Prepaid Utilities
When a company incurs interest that has not been paid, it records:
Interest Receivable (debit), Interest Payable (credit)
Interest Payable (debit), Interest Expense (credit)
Interest Expense (debit), Interest Payable (credit)
Cash (credit), Interest Expense (debit)
