During an accounting period, if an expense has been incurred and consumed but not yet paid for or recorded, then the end-of-period adjusting entry would involve
A) a liability account and an asset account.
B) an asset or contra asset account and an expense account.
C) a liability account and an expense account.
D) a receivable account and a revenue account.

Question

Quizplus · Accepted Answer

If an expense has been incurred and consumed but not yet paid for or recorded, then it means that a liability has been accrued, as the company owes payment for the expense. The adjusting entry would involve the recognition of the accrued liability and expense. Therefore, the correct choice is C, a liability account and an expense account.

During an Accounting Period, If an Expense Has Been Incurred