The expense that has been incurred but has not been paid are calleda)Prepaid expensesb)Outstanding expensesc)Lossd)RevenueCorrect answer is option 'B'. Can you explain this answer?

Question

Answer

Outstanding expenses

Answer

B

Answer

Outstanding expenses are those expenses which have been incurred and consumed during an accounting period and are due to be paid but are not paid.
Examples include outstanding salary, outstanding rent, etc. Outstanding expenses are recorded in the books at the end of an accounting period to show true numbers of a business.

Answer

Outstanding expenses are those expenses which have been incurred and consumed during an accounting period and are due to be paid but are not paid.
Examples include outstanding salary, outstanding rent, etc. Outstanding expenses are recorded in the books at the end of an accounting period to show true numbers of a business.

Answer

Outstanding Expenses

Outstanding expenses, also known as accrued expenses or unpaid expenses, refer to the expenses that have been incurred but have not yet been paid. These expenses are considered as liabilities for the company because they represent obligations to pay in the future. The correct answer for this question is option 'B' - outstanding expenses.

Explanation:

Definition of Outstanding Expenses:
Outstanding expenses are the expenses that have been recorded in the accounting books but have not been settled or paid by the company. These expenses are usually incurred during an accounting period but are not paid by the end of that period. They are shown as liabilities in the balance sheet of the company.

Characteristics of Outstanding Expenses:
1. Incurred but Unpaid: Outstanding expenses are the expenses that have been incurred by the company for various purposes, such as salaries, rent, utilities, etc., but have not been paid yet.
2. Recorded in the Books: These expenses are recorded in the accounting books as soon as they are incurred to ensure accurate financial reporting.
3. Short-term Liabilities: Outstanding expenses are considered short-term liabilities as they are expected to be settled within a relatively short period, usually within one year.
4. Accrual Concept: The recognition of outstanding expenses is based on the accrual concept of accounting, which states that expenses should be recognized in the period in which they are incurred, regardless of when the payment is made.

Example:
Let's consider an example to understand outstanding expenses better. Suppose a company has incurred $1,000 as utility expenses for the month of December, but by the end of December, the payment has not been made. In this case, the utility expenses of $1,000 would be recorded as outstanding expenses in the company's books. These outstanding expenses would be shown as a liability in the balance sheet until the payment is made.

Conclusion:
Outstanding expenses are an important concept in accounting as they represent the expenses that have been incurred but have not been paid by the company. These expenses are recorded in the books of accounts to ensure accurate financial reporting and are shown as liabilities in the balance sheet. By recognizing outstanding expenses, companies can accurately reflect their financial obligations and assess their overall financial position.

Answer

B

Answer

I explain outstanding expenses meaning by example
ex. a person buy a land in city after some years ago its price increases,finally profit of person but not any money get until another buy it
in increased rate

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Adjustment of outstanding expense prepaid expenses or depredation are not made in receipt and payment account why?

Amount paid in advance for a particulars expenses is known as_____

if outstanding expenses are given in adjustments does it mean that such outstanding expenses made on the date of preparation of financial statement? Related: Financial Statements with Adjustments (Part - 1)?

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