Question

Expenses that are paid in advance are held on the balance sheet until the end of the accounting period when they are transferred to the income statement with accounting adjustments. Select one: True False

Answer 1

Answer: False

Explanation: The expenses appear directly in the income statement and indirectly in the balance sheet.

It is useful to always read both the income statement and the balance sheet of a company, so that the full effect of an expense can be seen.