What do you mean by accrued expenses, Financial Management

Assignment Help:

Q. What do you mean by Accrued Expenses?

Accrued expenses are the expenses which have been incurred but not yet due and hence not yet paid also. These simply represent a liability that a firm has to pay for the services already received by it. The most important items of accruals are wages and salaries, interest, and taxes. Wages and salaries are usually paid on monthly, fortnightly or weekly basis for the services already rendered by employees. The longer the payment-period, the greater is the amount of liability towards employees or the funds provided by them. In the same manner, accrued interest and taxes also constitute a short-term source of finance. Taxes are paid after collection and in the intervening period serve as a good source of finance. Even income-tax is paid periodically much after the profits have been earned. Like taxes, interest is also paid periodically while the funds are used continuously by a firm. Thus, all accrued expense can be used as a source of finance.


Related Discussions:- What do you mean by accrued expenses

Current scenario of hedge fund industry, Global Scenario The Hedge Fund...

Global Scenario The Hedge Fund industry has captured over US $ 2 trillion in assets globally by the end of year 2006. According to an investor survey revealed for the Hedge Fun

Short sales, Short sales  : Short sales of a security means borrowing o...

Short sales  : Short sales of a security means borrowing of an underlying security by an investor from other investors who are holding it (in Demat account) and selling it with

International financial management - a European perspective , To whom it ma...

To whom it may concern, I wanna someone to help me to get prepared for my exam. is it possible to work together? 1. Managerial Aspects of the Market for Foreign Exchange

Dry up of liquidity and increased correlation, Hedge funds are short two ty...

Hedge funds are short two types of funding options. Describe in detail what these options are. Describe why these options become more valuable during a financial crisis. During

Finance, Do you provide help in college level Managerial Finance?

Do you provide help in college level Managerial Finance?

Explain benefits of investing via international mutual funds, What are the ...

What are the benefits of investing via international mutual funds? Answer:  The benefits of investing via international mutual funds consist of: (a) Save transaction or info

Certificate of deposits, A Certificate of Deposit (CD) can be defined...

A Certificate of Deposit (CD) can be defined as a negotiable promissory note, secure and short-term in nature. CDs are issued at a discount to the face value, the

Significance of secondary markets, Significance of Secondary Markets: H...

Significance of Secondary Markets: High liquidity and constant demand in the market need a diversified investor base with different preferences of demand, maturity and risk. Ap

Explain significance of the additional funds needed (afn), Explain the sign...

Explain the significance of the term additional funds needed. While the pro forma balance sheet is completed, total assets and total liabilities and equity will hardly match.

Prepare monetary statements using accounting standards, Entity A is signifi...

Entity A is significantly smaller than B in terms of revenue and would not impact LOP's revenue to the same extent. However A earns a noticeably better gross profit margin at 26% a

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd