Question

State the meaning of:
(a) Outstanding expenses
(b) Prepaid expenses
(c) Income received in advance
(d) Accrued income

Answer 1

Answer:

(a) Outstanding expenses - An Outstanding Expense is an expense which is due but has not been paid. An expense becomes outstanding when the company has taken the benefit, but the related payment has not been made. Examples of Outstanding Expenses

(b) Prepaid expenses- A prepaid expense is a type of asset on the balance sheet that results from a business making advanced payments for goods or services to be received in the future. Prepaid expenses are initially recorded as assets, but their value is expensed over time onto the income statement

(c) Income received in advance- Sometimes earned revenue that belongs to a future accounting period is received in the current accounting period, such income is considered as income received in advance. It is also known as Unearned Income and is received before the related benefits are provided.

(d)Accrued income - Accrued income is revenue that's been earned, but has yet to be received. Both individuals and companies can receive accrued income. Although it is not yet in hand, accrued income is recorded on the books when it is earned, according to accrual accounting methods.

Explanation:

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Answer 2

Answer:

(a) Outstanding expenses - An Outstanding Expense is an expense which is due but has not been paid. An expense becomes outstanding when the company has taken the benefit, but the related payment has not been made. Examples of Outstanding Expenses

(b) Prepaid expenses- A prepaid expense is a type of asset on the balance sheet that results from a business making advanced payments for goods or services to be received in the future. Prepaid expenses are initially recorded as assets, but their value is expensed over time onto the income statement

(c) Income received in advance- Sometimes earned revenue that belongs to a future accounting period is received in the current accounting period, such income is considered as income received in advance. It is also known as Unearned Income and is received before the related benefits are provided.

(d)Accrued income - Accrued income is revenue that's been earned, but has yet to be received. Both individuals and companies can receive accrued income. Although it is not yet in hand, accrued income is recorded on the books when it is earned, according to accrual accounting methods

Explanation:

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