A company incurred $5,000 for rent for the last month of Year 5.The company paid the bill during the first month of Year 6.Which of the following statements is correct?

Question

Quizplus · Accepted Answer

Since the expense was incurred (that is,the rent/building was used),the related $5,000 should be included in the amount of Rent Expense reported on the income statement for Year 5.(Note that the unpaid amount of $5,000 should be included in Accounts Payable in the liabilities section of the balance sheet at the end of Year 5. )

A Company Incurred $5,000 for Rent for the Last Month