Question

A company fails to recognize an expense incurred but not paid. Indicate which of the following accounts is debited and which is credited in the adjusting entry:

(a) asset
(b) liability
(c) revenue
(d) expense

Answer 1

When a company fails to recognize an expense incurred but not paid, the expense account is debited and the liability account is credited.

Step-by-step explanation:

When a company fails to recognize an expense incurred but not paid, the appropriate debited account would be expense and the credited account would be liability.