Accrued Expense – Definition & Example

Accrued expense is an expense that has been incurred but has not yet been paid. Put it in simple words, payment for these expenses are done after the product or service is taken. For example, salaries & wages, interest on bank loan, income tax etc. Contrary to prepaid expense, an accrued expense is treated as…


Accrued Income – Definition & Example

Accrued income is the income which has been earned but has not yet been received. This earned income falls under this category only if the company has right to receive this income. Accrued income is recorded for the period for which it is accrued and not for the period in which invoice is raised or…


Deferred Expense – Definition & Example

Deferred expense (also known as prepaid expense) is the cost which has been incurred but the product or service has not yet been received or consumed. As this is the cost for advance payment, this is treated as current assets (If the underlying goods or services are expected to be taken within a year) on…


Deferred Revenue – Definition & Example

Deferred revenue (also known as unearned revenue) is the income which has been received but the product or service has not yet been delivered to customer. As this is the amount which has been received in advance, this is treated as current liability (If the agreement is to provide goods/ services within a year) and…


Employee Stock Option Plan (ESOP)

Employee Stock Option Plan (ESOP) is a corporate scheme in which sponsoring company distribute its share to the employees free of cost or at a price lower than market price. The price so decided is known as grant price or exercise price.┬áThis right can be exercised within time frame imposed by the company and only…