Question

Recording salaries owed to employees that will not be paid by the company until the following accounting period is an example of a(n):

Multiple Choice

Prepaid expense.

Unearned revenue.

Accrued expense.

Accrued revenue.

Answer 1

Recording salaries owed to employees that will not be paid until the following accounting period is an example of an accrued expense.

Step-by-step explanation:

Recording salaries owed to employees that will not be paid by the company until the following accounting period is an example of an accrued expense.

An accrued expense represents expenses that have been incurred but have not yet been paid. These expenses are recognized in the financial statements to reflect the company's obligation to pay them in the future.

For example, if a company accrues $1,000 in salaries owed to employees at the end of an accounting period, but will not be paying them until the next period, the company would record an accrued expense of $1,000 on its balance sheet.