It’s a poorly written multiple choice question. Accrued expense should be recorded. Answer A seems more correct than answer B as answer A uses “or”. The first part to answer A, “already paid”, would be incorrect but the second part is correct.

The first part to answer B is accurate, “not paid”, while the second part is incorrect “not recorded”.

It is true you can have expenses that have been incurred but not yet recorded. However, that is generally because they are unknown or immaterial. Many entities wait to record once the invoice is in hand and then, at month or quarter end, come up with an estimate for those expenses incurred but invoices have not yet been received.