The advance cash payments of future expenses are called ________.
A)accrued revenues
B)deferred expenses
C)deferred revenues
D)accrued expenses

Question

Quizplus · Accepted Answer

Advance cash payments of future expenses are called deferred expenses. This is because expenses are recorded when they are incurred, not when the cash is paid, so the advance payment needs to be deferred and recognized as an expense in the appropriate accounting period. Accrued revenues are when revenue has been earned but not yet received, deferred revenues are payments received in advance for goods or services that will be delivered in the future, and accrued expenses are expenses that have been incurred but not yet paid for.

The Advance Cash Payments of Future Expenses Are Called ________