Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 35 - No. 8)
What happens to the income statement when a company purchases goods or services on credit and has not yet paid?
An expense will be recognized.
No expense will be recognized.
An asset is recognized.
Revenue is recognized.
Explanation
When incurring the expense, even if there is no cash exchange, the expense is recognized.
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