The primary difference between prepaid and accrued expenses is that prepaid expenses have:
A)been incurred and accrued expenses have not.
B)not been paid and accrued expenses have.
C)been recorded and accrued expenses have not.
D)not been recorded and accrued expenses have.

Question

Quizplus · Accepted Answer

Prepaid expenses are payments made in advance for goods or services to be received in the future, and they are recorded as assets until the benefit is realized. Accrued expenses, on the other hand, are recognized when incurred, even if not yet paid, and are recorded as liabilities.

The Primary Difference Between Prepaid and Accrued Expenses Is That