An accrued expense occurs when:
A)Cash payment (or an obligation to pay cash)occurs before the expense recognition.
B)An expense is recorded at the same time as the cash payment.
C)Cash payment occurs after the expense is recognized and a liability is recorded.

Question

Quizplus · Accepted Answer

An accrued expense occurs when the expense is recognized before the cash payment is made, resulting in a liability being recorded on the balance sheet. Choice A describes a prepaid expense, and choice B describes a cash basis accounting method.

An Accrued Expense Occurs When