Expenses incurred during the year but for which payment has not been made and will have to be made next year are called unpaid expenses, e.g., rent, rates, taxes, electricity charges, audit fees, salaries, etc. The auditor should examine vouchers, receipts, invoices, demand notes, etc., to ascertain whether expenses ought to have been debited to the current year’s profit and loss account and whether any payment has been made.
According to the lawinsider.com dictionary, “Unpaid Expenses means all unpaid expenses of Seller incurred in connection with the transaction, including attorney’s fee and expenses incurred by Seller in connection with the transactions contemplated hereby taxes, transfer taxes, severance, and accrued and unpaid employee benefit costs, and transaction fees and expenses.”
Unpaid Expenses refer to money owed to vendors for incurred expenses that are not yet paid. This term is known as accounts payable in accounting and bookkeeping. An example can be the advertising expenses that an advertiser has incurred from advertising but has not paid yet.
Use of the term in Sentence:
- The business is expanding its area of operation for generating extra sources of earning and for paying the unpaid expenses on time.
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