Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 30 - No. 3)
If an accountant finds an invoice for services received in December, but it wasn't paid until January, how is that treated?
It's recorded as an expense in January.
It's recorded as an expense in December.
It's ignored because it's not paid.
It's recorded as revenue in December.
Explanation
Expenses are recognized in the period the expense has been incurred.
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