Unpaid expenses may be included as an expense on the income statement.

Question

Quizplus · Accepted Answer

Unpaid expenses represent costs that have been incurred but not yet paid. They should still be included as an expense on the income statement because they represent a liability, or an obligation to pay, that the company has incurred. The unpaid expense will eventually be paid and become a cash outflow, but until then it is still an expense that has been accrued.

Unpaid Expenses May Be Included as an Expense on the Income