Unformatted text preview: accounting period accounting period should be recorded in should be recorded in that period, regardless that period, regardless of when cash is paid..
of when cash is paid 3-15 The Matching Principle
When cash is paid on the date the expense is incurred, the following entry is made:
Expense (+E) xxx Cash (A) xxx 3-16 The Matching Principle
If cash is paid before the company receives goods or services, an asset account, PREPAID EXPENSE is recorded.
Cash is paid before expense is incurred
Prepaid expense (+A) xxx Cash (A) xxx 3-17 The Matching Principle
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