If a resource has been consumed but an invoice has not been received at the end of the accounting period, then
A) an expense should be recorded when the invoice is received.
B) an expense should be recorded when the cash is paid out.
C) an adjusting entry should be made recognizing the expense.
D) it is optional whether to record the expense before the invoice is received.

Question

Quizplus · Accepted Answer

According to the accrual basis of accounting, expenses should be recognized when they are incurred, not necessarily when they are paid. Therefore, if a resource has been consumed but an invoice has not yet been received, an adjusting entry should be made to recognize the expense in the period it was incurred.

If a Resource Has Been Consumed but an Invoice Has