If an expense has been incurred but not yet recorded, then the end-of-period adjusting entry would involve
A) a liability account and an asset account.
B) a liability account and a revenue account.
C) an asset and an expense account.
D) a receivable account and a revenue account.

Question

Quizplus · Accepted Answer

An expense that has been incurred but not yet recorded would require an adjusting entry that involves recording the expense in the current period by debiting the expense account and crediting the corresponding asset account (such as prepaid supplies, prepaid insurance, etc.). Therefore, the answer is option C, which involves an asset and an expense account. Option A involves a liability account and an asset account, which would not be appropriate for an expense that has been incurred. Option B involves a liability and a revenue account, which would not be appropriate either as expenses are recorded in expense accounts, not revenue accounts. Option D involves a receivable account and a revenue account, which again is not appropriate for an expense that has been incurred but not yet recorded.

If an Expense Has Been Incurred but Not Yet Recorded