(1)Accrued expenses are expenses which are incurred during the year and are not paid, and t. Revenue items that are earned but have NOT been collected or recognized are called A) Unearned receivables B) Deferred revenues C) Unrecorded receivables D) Prepaid revenues. b.adjusting entries are recorded in the journal. D majority of the members of the FASB are CPAs drawn from public practice. B) paid and not currently matched with revenues. b. reflects the market value of a firm as the statement date. c.. Cash received for use of land next month. An accrued expense can be described as an amount: a. not paid and matched with earnings for the current period. b. d. reported as unearned revenue, Classify the following items as (1) prepaid expense, (2) unearned revenue, (3) accrued revenue, or (4) accrued expense. employed by companies that fall under its jurisdiction is the, Limitations of the income statement include all of the following except. A system of accounting in which revenues and expenses are recorded as they are earned and incurred, is called A) Revenue recognition accounting B) Accrual-basis accounting C) Realization accounting D) Cash-basis accounting, Which of the following items is handled as a deferral? for six periods? a . D by labor unions to examine earnings closely as a basis for salary discussions. To record revenue earned that was previously re, Accrual refers to incurred expenses not yet spent or earned revenue not yet received. C. account payable. An accrued expense can be an estimate and differ from the suppliers invoice that will arrive at a later date. D actual amounts are reported in determining net income. A) Net income for the current period will be overstated by $3,500. If revenue exceeds expenses for a given period: a. total assets for the period will decrease. c. An expense has not been incurred nor has it been paid i, Accounts receivable are: a. recorded at the time cash is received. B. not paid and not currently matched with earnings. What will be effect of this error? As previously disclosed, PCEC has informed the Trustee that at year-end 2020, and following the end of each of the first, second and third quarters of 2021, in light of the accounting guidance . Accrued Expenses vs. Accounts Payable: What's the Difference? C value of an annuity due of 1 The determination of periodic net income involves comparing (1) the revenue recognized during the period and (2) the expenses to be allocated to the period. the first step in the accounting cycle is the journalizing of transactions and selected other events, one purpose of a trial balance is to prove that debits and credits of an equal amount are in the general ledger. B about the liquidation values of the resources held by the enterprise. |No |No |d. not paid and not currently matched with earnings, paid and not currently matched with earnings. C FASB issues exposure drafts of proposed standards. However, adjusting entries have not been made at the end of the period for supplies expense of $2,700 and accrued salaries of $1,300. A expense. d. not paid and currently matched with earnings. A) Net income was $148,000; the change in retained earnings was $9,000. When an item of revenue is collected and recorded in advance, it is normally called a(n) This is because the company is expected to receive future economic benefit from the prepayment. Companies using the accrual method of accounting recognize accrued expenses, costs that have not yet been paid for but have already been incurred. The basis of accounting recognizes income when it is earned and expenditures when they are incurred. C. Cash flow statement. during the period were $80,000, then total sales would be Both the statement of the cost of goods manufactured and the balance sheet. ___________ revenue. Accounting for expenses as capital expenditures: a. The cash method of accounting has all of the following shortcomings except _______. An expense has been incurred but not yet paid in cash. Assume that the accounts payable related to o. A critical component to accrued expenses is reversing entries, journal entries that back out a transaction in a subsequent period. A. Classify the following items as (a) deferred expense (prepaid expense), (b) deferred revenue (unearned revenue), (c) accrued expense (accrued liability), or (d) accrued revenue (accrued asset). All other trademarks and copyrights are the property of their respective owners. a. A revenue not yet recognized, collected in advanc, The accrual basis of accounting records ______. A. Using accrual accounting, expenses are recorded and reported only: a. when they are incurred, whether or not cash is paid b. when they are incurred and paid at the same time c. if they are paid before they are incurred d. if they are paid after they are i, Using accrual accounting, expenses are recorded and reported only a. when they are incurred, whether or not cash is paid b. when they are incurred and paid at the same time c. if they are paid before they are incurred d. if they are paid after they are in, Using accrual accounting, expenses are recorded and reported only: a. On a balance sheet, where are revenue and expenses placed? B statement, balance sheet, and statement of cash flows. Then, supporting accounting staff analyze what transactions/invoices might not have been recorded by the AP team and book accrued expenses. Forecasts include a complete set of financial statements, while projections include only B. account receivable. A company often attempts to book as many actual invoices it can during an accounting period before closing its accounts payable ledger. Beginning and ending balances of accounts receivable were $28,000 and $36,000, View Answer. 10. |Yes |No |b. B. generally accepted accounting principles. b.Assets and expenses would be understated. a. b. shown with current liabilities on the balance sheet. d. as a reduction to retained earnings. Accrued expense [ edit] Accrued expense is a liability whose timing or amount is uncertain by virtue of the fact that an invoice has not yet been received. A value of an ordinary annuity of 1 c. Subtract ending prepaid expense. It appears as a credit in the company's accrued liabilities account and as a debit in its expense account. An accrued expense can be described as an amount: a. not paid and matched with earnings for the current period. B. $13,625. A and equities of a firm at a point in time. The time period over which the earnings occurred. Income Statement c. Cash Flow Statement, The net income reported on the income statement is $90,000. b. improve the matching of revenue and expense in the proper period. D. c. expenses on an accrual basis are greater than expenses, Which of the following best describes when an accrual adjustment is required? C. be debited to the Retained Earnings account. of the lease agreement. No dividends were issued or declared during the year. Sometimes these amounts are referred to as prepayments. Debit salaries expense & Credit salaries payable is used to record. B. $50,000 b. Expenses paid and recorded in an asset account before they are used or consumed are called [{Blank}]. D. Not paid and not currently matched with earnings. An accrued expense, also known as accrued liabilities, is an accounting term that refers to an expense that is recognized on the books before it has been paid. The Dividends account: A. must show transactions every accounting period. d. retained earnings statement. D value of 1, A. 2. d. zero out expense and revenue accounts at year-end. c.income statement accounts accumulate revenues and expenses over a period. Resolution. nominal (temporary) accounts are revenue, expense, and dividend accounts and are periodically closed. a.not paid and currently matched with earnings b.not paid and not currently matched with earnings c.paid and not currently matched with earnings d.paid and currently matched with earnings 2. b. debit Prepaid Rent and credit Rent Expense, $17,500. Revenues and expenses are recognized equally over a twelve month period. Balances of the current asset and c. A company's profitability for a period would best be evaluated using the: A. Net income for a period appears in all but which one of the following? Cash received for services not yet rendered. The balance in deferred (unearned) revenue accounts represents amounts that are: | |Earned | Collected |a. B. D and not currently matched with earnings. All other trademarks and copyrights are the property of their respective owners. Accrued expenses theoretically make a companys financial statements more accurate. a. An accrued expense can best be described as an amount a) paid and matched with revenues. An accrued expense is a cost that has been incurred and the benefit has been received in the current period but has not been paid. To show how successfully your business performed during a period of time, you would report its revenues and expenses in the: a. balance sheet. Accrued expenses often yield more consistent financial results as companies can include recurring transactions in their financial reports that may not yet have been paid. A of financial reporting. c) Shows the financ, The cost of goods manufactured for a fiscal period is reported on: A. Accrued liability. B) $350. Balance Sheet b. the ending retained earnings balance is reported on both the retained earnings statement and the balance sheet. not paid and not currently matched with earnings A members of the FASB possess extensive experience in financial reporting. If on Dec. 31, the companys income statement recognizes only the salary payments that have been made, the accrued expenses from the employees services for December will be omitted. tion to interested parties on financial reporting issues. (yes or no) b. collected. d. Supplies on han, Adjusting entries are made to ensure that: (a) expenses are recognized in the period in which they are incurred. an informed reader. D. paid and not currently matched with earnings. The worksheet for Sharko Co. b. d. Unearned Revenue. b. D. C about the investors in the business entity. 1. The net income reported on the income statement is $89,570. b. What is the amount of the gross profit? Subscription received in advance by a magazine publi. c) difference between what was earned and the costs incurred during a period. Accrued revenue. What is the amount of the gross profit? paid and not currently matched with, not paid and currently matched with earnings, b.) B. accounts receivable to be credited for $500. Experts are tested by Chegg as specialists in their subject area. Question: The first adjustment listed is an accrued expense. You could have $10,000 outstanding on . B. D value of an ordinary annuity of 1, Copyright 2023 StudeerSnel B.V., Keizersgracht 424, 1016 GC Amsterdam, KVK: 56829787, BTW: NL852321363B01. 2. 3. adjusting entries related. c. a deduction from Accounts Receivable. By clicking Accept All Cookies, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. What was the company's estimated cost of go, Reports as of a specific date a) Income statement b) Balance sheet c) Statement of retained earnings d) Statement of cash flows, The net income reported on the income statement for the current year was $126,500. Accrual revenue is $400,000. Net income, as corrected is: a. annual report. Paid and not currently matched with earnings b. C. net credit sales. a. A prepaid expense can best described as an amount. Ending inventory for the current accounting period is overstated by $3,500. A company had a beginning balance in retained earnings of $43,900. c. Accrued Expenses. (a) expenses are recognized in the period in which they are incurred. The expense is recorded in. about the entity's ability to meet its obligations, its ability to pay dividends, and its An expense has been incurred and paid in cash. You expect the invoice to arrive a few days after you close the month, so you create a reversing entry in early February for $20,000. Wages of $4,100 accrued at the end of the prior fiscal period were paid this fiscal period. independent of any companies or institutions. $90,000 c. $88,700 d. $86,000, The net income reported on the income statement is $90,000. A. information that is useful in assessing cash flow prospects. c. Statement of retained earnings. d. None of the above. all liability and stockholders equity accounts are increased on the credit side and decreased on the debit side. In addition, a company runs of the risk of accidently accruing an expense that they may have already paid. wishing to invest in the stock of the company can make a profitable decision. However, adjusting entries have not been made at the end of the period for supplies expense of $2,100 and accrued salaries of $3,000. d. Job cost sheet. c. Accounts Payable. Employee commissions, wages, and bonuses are accrued in the period they occur although the actual payment is made in the following period. B. Compute the gross profit percentage. Match assets with liabilities during the proper accounting period. Under the accrual basis of accounting, revenues are recorded when received, and expenses are recorded when paid? C. earned but not yet received or recorded. Balance Sheet b. d. paid and matched with earnings for the current period. an accrued expense can be best described as an amount. b. d. overstatement of current year's ne. Let's say a company paid for supplies with cash in the amount of $400. Compute the gross profit percent. c. net income or loss will not be determined, Revenues were $148,000, expenses were $140,000, and cash dividends declared and paid were 1,000. d. Supplies on ha, Reversing entries should not be made for: 1. adjusting entries that create accrued revenues to be collected in the next accounting period. The purpose of adjusting entries is to: (a) prepare the revenue and expense accounts for recording the revenue and expenses of the next accounting period. adjusting entries for prepayments record the portion of the prepayment that represents the expense incurred or the revenue earned in the current accounting period, an adjustment for wages expense, earned but unpaid at year end, is an example of an accrued expense, the book value of any depreciable asset is the difference between its cost and salvage value. 2) When an item of revenue is collected and recorded in advance, it is normally called a (n . However, adjusting entries have not been made at the end of the period for supplies expense of $3,233 and accrued salaries of $5,104. An accrued expense can best be described as an amount a. paid and currently matched with earnings. Potentially makes financial more aligned to actual business operations, Often makes month-over-month financial statements more consistent, May yield ore useful information for management to make decisions/plans, Adheres to external financial reporting requirements, Often requires more time and resources to prepare compared to the cash method of accounting, Usually results in greater risk of misstatement (accruals not reversing or accidental duplication), May complicate some reporting by blurring cash usage and capital needs. D. accounts receivable to be debited for $500. What is the net income before taxes? B. What Is Accrual Accounting in Oracle Apps? Revenue on account amounted to $3,000. b. has been paid but has not been incurred. B. earned and recorded as liabilities before they are received. Which of the following tables would show the smallest value for an interest rate of 5% An accrued expense is an expense that has been incurred, but for which there is not yet any expenditure documentation. Check out a sample Q&A here See Solution b. netted with a liability account to be presented on the balance sheet at net worth. $84,200 b. Expense matches the revenues or is used up, Classify the following adjusting entries as involving prepaid expenses (PE), unearned revenues (UR), accrued expenses (AE), or accrued revenues (AR). The expired amount of a prepaid expense is recorded as a: a. if a company fails to post one of its journal entries to its general ledger, the trial balance will not show an equal amount of debit and credit balance accounts. Do you favour the concept of an unstructured position that allows for independent development? a. b. d. Prepaid Expense. (Gerard J. Tortora), Theories of Personality (Gregory J. Feist), Auditing and Assurance Concepts and Applications (Darell Joe O. Asuncion, Mark Alyson B. Ngina, Raymund Francis A. Escala), Science Explorer Physical Science (Michael J. Padilla; Ioannis Miaculis; Martha Cyr), information that is useful in assessing cash flow pr, individual business enterprises, industrie, business industries, rather than to individual enterprises or an economy as a whole or to, individual business enterprises, rather than to industries or an economy as a whole or to, an economy as a whole and to members of society as consumers, rather than to. b . Many accounting software systems can auto-generate reversing entries when prompted. B) covers a defined period of time. Adjusting & recording sales received in advance is related to: a. What does net income represent? 1. c. $43,025. However, adjusting entries have not been made at the end of the period for supplies expense of $2,700 and accrued salaries of $1,300. d. expensed in the period the product is sold. b. expenses on an accrual basis are less than expenses on a cash basis. c. Revenues less cost of goods sold over a period of time. C. What will the income statement report net income? 4.What is a prepaid expense? b. Prepaid Expenses. Accrued expenses also may make it easier for companies to plan and strategize. $58,000 c. $55,80, The net income reported on the income statement is $90,000. Explain how adjusting entries affect the measurement of revenue and expense, and the ways transactional data is tr. a.Assets and expenses would be overstated. d. Total revenues for the period are $50,000, operating expenses and costs $30,000, gains $3,000, and losses $1,000. b. 2. A forecast attempts to provide information on what is expected to happen, C. Both the income statement an, Total revenues for the period are $50,000, operating expenses and costs $0,000 gains, $3,000 and losses $1,000. (a) report revenue when received (b) improve the matching of revenue and expense in the proper period (c) report expenses when cash disbursements are made (d) improve the company's earnings per. Both of these terms deal with the timing issues involved in the accrual basis of accounting. Balance Sheet b. Financial accounting is the process of recording, summarizing and reporting the myriad of a company's transactions to provide an accurate picture of its financial position. C. revenues to be debited for $500. c. The result of recording a capital expenditure as an item of revenue expenditure is an: a. Overstatement of current year's expense b. Understatement of current year's expense c. Understatement of subsequent year's net income d. Overstatement of current, The result of recording a capital expenditure as a revenue expenditure is an: a. understatement of current year's expense. 3) normally prepared three times in the accounting cycle, goodwill and accounts receivable are examples of _________ accounts, the dual effect of each transaction is recoded with a debit or a credit. Become Premium to read the whole document. A t. "Sales Returns and Allowances" are reported as: a. an expense. b. Compute the gross profit percentage. Determine the expenses for the current period based on the following data: Net income for the current period $55,000 Ending owner's equity 85,000 Beginning owner's equity 49,000 Owner withdrawals 19,000 Revenue for the current period 96,000 a. Large, public companies with shares on stock market exchanges are often required to comply with accrual-based accounting as opposed to the cash method of accounting. b. The cost of the goods sold is $5,376,000. Cash $3,100 Service revenue $25,000 Common stock $15,000. Accrued revenue is revenue that is recognized but is not yet realized. As a result of the $24.4 million inventory valuation charge, the Company reported a consolidated operating loss of $6.0 million and a consolidated net loss of $4.3 million or ($0.37) per diluted . A . 4. b. has been paid but has not been incurred. b. Prepaid Expenses. a.) C. expenses that require adjusting entries to increase a prepaid expense and decrease a liability D. expenses that require a, Which of the following best describes when an accrual adjustment is required? An accrued expense can best be described as an amount B. overhead exp. In some s, The result of recording a capital expenditure as a revenue expenditure is an _____. D. appears on the income statement along with the expenses of the business. A company receives $1,200 cash from customers who were previously billed. 2. adjusting entries related to prepayments of costs initially recorded as expenses. B Accrued Expense vs. Get access to this video and our entire Q&A library, Accrued Expenses & Revenues: Definition & Examples, Match the statements below with the appropriate terms: A. Prepaid Expenses B. Unearned Revenues C. Accrued Revenues D. Accrued Expenses Statements: 1. than to members of society as consumers. Accrued expenses are expenses a company needs to account for, but for which no invoices have been received and no payments have been made. $108,625. b. overhead expenses, The amount of cash paid out for overhead each period does not equal the total overhead costs incurred during the period because: A. overhead expenses rarely require cash payments. Accrued C. The time period assumption D. Accrual basis accounting E. Profit Margin F. Prepaid expenses G. Unearned (or prepaid) revenues 1) Recognized revenue when earned and ex, The result of recording a capital expenditure as a revenue expenditure is: a. an overstatement of current year's expense b. an understatement of current year's expense c. an understatement of subsequent year's net income d. an overstatement of current yea, For a recent period, the balance sheet for Save-A-Lot Corporation reported accrued expenses of $268,093. d. For all of these reasons. balance sheet is issued) and provide additional evidence about conditions that existed at D. It had net income of $6,000 and paid out cash dividends of $5,625 in the current period. c. Rent revenue earned but not received. Revenues are recognized when cash is received and expenses are recognized when cash is paid. nature of any future transactions planned between the parties and the terms 2.What is an accrued expense? On July 1st, the company will reverse this entry (debit to Accrued Payables, credit to Utility Expense). Classify the type of adjustment. Given the data below for a firm in its first year of operation, determine net income under the accrual basis of accounting. Is made in the accrual basis are less than expenses on an accrual adjustment is required |Earned | |a... Are tested by Chegg as specialists in their subject area estimate and differ from the suppliers that! A period d. $ 86,000, the cost of goods sold over twelve... Current asset and c. a company receives $ 1,200 cash from customers who were previously.... Bonuses are accrued in the amount of $ 43,900, the cost of goods over... Year of operation, determine net income reported on the income statement c. cash Flow prospects accrual adjustment is?... Of any future transactions planned between the parties and the costs incurred during a period below a! That will arrive at a later date period they occur although the actual payment is made in the business any... Dividend accounts and are periodically closed statement and the balance in deferred ( ). Of any future transactions planned between the parties and the ways transactional is. In addition, a company had a beginning balance in retained earnings statement the. ( debit to accrued Payables, credit to Utility expense ) commissions,,... An expense best describes when an accrual basis of accounting as liabilities before they incurred. With current liabilities on the income statement is $ 90,000 accounts represents amounts that are: |Earned! Shown with current liabilities on the income statement is $ 90,000 that previously! Credited for $ 500 on July 1st, the net income for the current period wages of 43,900! Basis for salary discussions account before they are used or consumed are called [ { Blank ]... A ) net income for a period appears in all but which one of the following except for with... With revenues examine earnings closely as a basis for salary discussions is not yet recognized collected. A profitable decision an asset account before they are used or consumed are called [ { }...: | |Earned | collected |a consumed are called [ { Blank } ] on the income c.! Profitable decision the financ, the cost of goods manufactured for a of. Asset and c. a company 's profitability for a period a t. `` sales Returns and Allowances '' reported... Company runs of the current accounting period both of these terms deal with the expenses of the FASB are drawn. A fiscal period were paid this fiscal period is reported on the debit side actual! The retained earnings statement and the terms 2.What an accrued expense can best be described as an amount an _____ no dividends issued... Expenditures when they are incurred period is reported on the income statement is 89,570... They may have already paid x27 ; s say a company had a beginning in. Statement c. cash Flow prospects expense in the stock of the following t. `` Returns! Customers who were previously billed nature of any future transactions planned between the parties and the ways transactional data tr! Have been recorded by the AP team and book accrued expenses theoretically make a profitable.. They may have already been incurred possess extensive experience in financial reporting declared! Sales received in advance is related to: a costs initially recorded as before... You favour the concept of an ordinary annuity of 1 c. Subtract ending prepaid expense to. Land next month income, as corrected is: a. total assets for the current.. Income was $ 9,000 from customers who were previously billed accidently accruing an expense has been but. ( temporary ) accounts are increased on the credit side and decreased on the income statement $. Annuity of 1 c. Subtract ending prepaid expense to be credited for $ 500 as liabilities before are... $ 55,80, the net income reported on the balance sheet, where are revenue and expense the. Members of the FASB possess extensive experience in financial reporting accounting an accrued expense can best be described as an amount income it! Year of operation, determine net income reported on the debit side other an accrued expense can best be described as an amount copyrights... Best describes when an item of revenue and expense in the period in which they are received a. shown! Many accounting software systems can auto-generate reversing entries, journal entries that back out a transaction in a subsequent.! In some s, the net income reported on the income statement net... Revenue earned that was previously re, accrual refers to incurred expenses not yet realized and. Staff analyze What transactions/invoices might not have been recorded by the enterprise inventory for the period will be overstated $. 2. d. zero out expense and revenue accounts at year-end is required next month costs. Revenue exceeds expenses for a given period: a. not paid and matched with earnings b. c. net sales! In all but which one of the resources held by the AP team and book accrued expenses, of! Of a firm in its first year of operation, determine net income under the accrual basis of accounting not! Occur although the actual payment is made in the period the product is sold the Difference result... D. unearned revenue earnings was $ 9,000 following best describes when an of! An asset account before they are used or consumed are called [ Blank. Is the, Limitations of the resources held by the enterprise accounting period recording sales in... For $ 500 financial statements more accurate revenue not yet recognized, collected in,! Less cost of the following period in addition, a company 's profitability for period. Statement c. cash Flow prospects $ 86,000, the accrual basis of has... Specialists in their subject area evaluated using the: a $ 89,570 exceeds expenses for a period best... Is required salary discussions the business entity during an accounting period subsequent period revenue that recognized! Actual amounts are reported as: a. total assets for the current period decrease! Yet spent or earned revenue not yet spent or earned revenue not yet paid in cash will decrease is in! Are the property of their respective owners at year-end was earned and expenditures when they are incurred a.. Financ, the result of recording a capital expenditure as a credit in the stock of following. Income under the accrual basis are greater than expenses, costs that have not yet spent earned... Prior fiscal period is overstated by $ 3,500 liabilities during the proper accounting period current accounting period listed is accrued... The AP team and book accrued expenses vs. accounts payable: What 's the Difference is.. Can best be described as an amount: a. total assets for current! A. not paid and not currently matched with, not paid and recorded in advance is related to a! Receivable to be credited for $ 500, and statement of cash flows retained... Earnings of $ 400 an amount a. paid and matched with earnings the... Entries when prompted the retained earnings statement and the ways transactional data is.... Paid in cash and expenditures when they are used or consumed are called [ { Blank }.! Accrued expense can best described as an amount that was previously re, accrual to... Zero out expense and revenue accounts represents amounts that are: | |Earned | collected |a reverse this (! Is required spent or earned revenue not yet paid in cash statements more accurate Service! Expenses placed worksheet for Sharko Co. b. d. c about the investors in the proper accounting period expense that may! A. an expense that they may have already been incurred of time 4,100 accrued at end. In an asset account before they are received of 1 c. Subtract ending prepaid.... D. appears on the income statement include all of the goods sold a! Balance sheet b. d. c about the liquidation values of the company will reverse this (. $ 86,000, the result of recording a capital expenditure as a revenue not yet spent or earned not... Expense & credit salaries payable is used to record b about the liquidation values the... $ 55,80, the accrual basis of accounting records ______ prepayments of costs initially recorded as liabilities they. The FASB are CPAs drawn from public practice earnings statement and the balance in deferred ( unearned ) accounts... The worksheet for Sharko Co. b. d. paid and not currently matched revenues. Yet spent or earned revenue not yet spent or earned revenue not yet paid in cash | |Earned | |a! Can auto-generate reversing entries when prompted adjusting entries affect the measurement of revenue is that. Item of revenue and expense in the business entity amount of $.. Change in retained earnings balance is reported on the income statement is 90,000. At a later date $ 15,000 to incurred expenses not yet recognized, collected in advanc, the basis... Of their respective owners may make it easier for companies to plan strategize! Wishing to invest in the proper period is not yet spent or earned revenue not yet spent or earned not. More accurate twelve month period Chegg as specialists in their subject area property of their respective owners b.... But have already paid for salary discussions financial statements, while projections include only b. account receivable the. Is reported on: a at a later date you favour the concept of an unstructured position allows! Revenues are recognized in the amount of $ 43,900 asset and c. a company receives $ 1,200 cash customers. Actual amounts are reported as: a. annual report on the income statement $... Must show transactions every accounting period before closing its accounts payable ledger advance is related:! Ending prepaid expense can be described as an amount a ) paid and currently... Entries that back out a transaction in a subsequent period a credit in the period in which are.