Entries that record cash paid out before the expense is incurred are:
A)accrued expenses.
B)prepaid expenses.
C)unearned revenues.
D)accrued revenues.

Question

Quizplus · Accepted Answer

Prepaid expenses refer to payments made for goods or services before they are actually received or used. This means that cash is paid out before the expense is incurred, making option B the correct answer. Accrued expenses, on the other hand, record expenses that have been incurred but not yet paid for, while unearned revenues refer to cash received in advance for services that have not yet been rendered. Accrued revenues are earned but not yet received.

Entries That Record Cash Paid Out Before the Expense Is