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 best describes the adjusting entry to record an accrued expense at the end of an accounting period?

Debit an expense account and credit a liability account

Debit a liability account and credit an expense account

Debit a revenue account and credit an asset account

Debit an asset account and credit a revenue account

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Verified step by step guidance

Understand the concept of accrued expenses: Accrued expenses are expenses that have been incurred but not yet paid or recorded at the end of an accounting period. These require an adjusting entry to ensure the financial statements reflect the expense and the related liability.

Identify the accounts involved: When recording an accrued expense, you need to increase (debit) the expense account to recognize the cost incurred and increase (credit) the liability account to reflect the obligation to pay.

Determine the correct journal entry: The adjusting entry for an accrued expense involves debiting the appropriate expense account (e.g., Salaries Expense, Interest Expense) and crediting the corresponding liability account (e.g., Salaries Payable, Interest Payable).

Eliminate incorrect options: Review the provided options and eliminate those that do not align with the concept of accrued expenses. For example, debiting a liability account and crediting an expense account would decrease the liability and expense, which is incorrect for accrued expenses.

Select the correct answer: Based on the analysis, the correct description of the adjusting entry for an accrued expense is 'Debit an expense account and credit a liability account.'