An accrued expense occurs when:

A) Cash payment (or an obligation to pay cash) occurs before the expense recognition.

B) An expense is recorded at the same time as the cash payment.

C) The expense is recognized before the payment of cash.

D) Cash is paid but an expense is never recorded.

Answer: C

An accrued revenue represents:

A) Customers paying cash in advance of the good or service to be provided.

B) Revenue being recorded prior to cash collection from the customer.

C) Revenue being recorded at the same time the cash is collected from the customer.

D) Cash being collected from the customer prior to the revenue being recorded.

Answer: B

Deferred revenues refer to:

A) Customers paying cash in advance of the good or service to be provided.

B) Revenue being recorded prior to cash collection from the customer.

C) Revenue being recorded at the same time the cash is collected from the customer.

D) Cash being collected from the customer after the revenue is recorded.

Answer: A