Difference between outstanding expenses and unexpired expenses
Answers
Outstanding expense is that expense which is already incurred but amount is not paid while unexpired expenses are those expenses for which payment is made in advance but actually expenses are not yet incurred.
Answer :
Outstanding expenses refer to expenses that have been incurred but not yet paid, while unexpired expenses refer to expenses that have been incurred but not yet used up or consumed.
Explanation :
Outstanding expenses and unexpired expenses are two different concepts in accounting and financial management. Outstanding expenses refer to expenses that have been incurred but have not yet been paid. These are expenses that have been recorded in the books of accounts, but the payments have not yet been made. Examples of outstanding expenses include unpaid bills, unpaid salaries, and unpaid taxes. On the other hand, unexpired expenses refer to expenses that have been incurred but have not yet been used up or consumed. These are expenses that have been recorded in the books of accounts, but the benefit of these expenses has not yet been realized. Examples of unexpired expenses include prepaid insurance, prepaid rent, and prepaid subscription services.
The main difference between the two is that outstanding expenses are expenses that have been incurred but not yet paid, while unexpired expenses are expenses that have been incurred but not yet used up or consumed. Outstanding expenses are typically short-term in nature and are expected to be paid within a year, while unexpired expenses are also typically short-term in nature and are expected to be used up or consumed within a year. Outstanding expenses are recorded in the accounts payable account, while unexpired expenses are recorded in the prepaid expenses account. It is important to keep track of both outstanding and unexpired expenses to ensure that a business stays within its budget and is able to make payments on time.
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