Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

3. Accrual Accounting Concepts

Adjusting Entries: Accrued Expenses

Financial Accounting

3. Accrual Accounting Concepts

Adjusting Entries: Accrued Expenses

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Multiple Choice

Which of the following accounts is typically considered an accrued expense?

Unearned Revenue

Salaries Payable

Accounts Receivable

Prepaid Insurance

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Verified step by step guidance

Understand the concept of accrued expenses: Accrued expenses are liabilities that represent costs incurred by a company but not yet paid. These are recorded in the accounting period in which they are incurred, regardless of when payment is made.

Analyze each account option provided: Unearned Revenue represents money received before goods or services are delivered, which is a liability but not an accrued expense. Accounts Receivable represents money owed to the company by customers, which is an asset. Prepaid Insurance represents payments made in advance for insurance coverage, which is an asset.

Focus on Salaries Payable: Salaries Payable is a liability account that represents salaries earned by employees but not yet paid by the company. This fits the definition of an accrued expense because the expense has been incurred but payment is pending.

Relate Salaries Payable to the matching principle: The matching principle in accounting requires that expenses be recognized in the same period as the revenues they help generate. Salaries Payable ensures that employee compensation is recorded in the correct period, even if payment occurs later.

Conclude that Salaries Payable is the correct answer: Based on the analysis and definitions, Salaries Payable is typically considered an accrued expense because it represents an obligation to pay for services already received.