Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 48 - No. 37)
If a company has already recognized an expense but has not yet paid the related cash outflow, what type of entry is necessary?
A prepayment entry.
An accrual entry.
A deferral entry.
A cash basis entry.
Explanation
An accrual entry is needed to record the expense in the proper accounting period.
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