- CFA Exams
- CFA Exam: Level I 2021
- Study Session 8. Financial Reporting and Analysis (3)
- Reading 28. Non-current (Long-term) Liabilities
- Subject 1. Accounting for Bond Issuance, Bond Amortization, Interest Expense, and Interest Payments
CFA Practice Question
Interest on a note payable is most appropriately accrued ______
B. as of the end of each accounting period during which the note is a liability.
C. when principal payments on the note are made.
D. when the interest is paid.
E. at its maturity date.
A. when the note is signed.
B. as of the end of each accounting period during which the note is a liability.
C. when principal payments on the note are made.
D. when the interest is paid.
E. at its maturity date.
Correct Answer: B
User Contributed Comments 6
| User | Comment |
|---|---|
| haarlemmer | Sell at premium? |
| danlan | Does it mean that the interest is recognized at the end of each accounting period? |
| cwrolfe | as frequent as the accounting periods... daily, monthly, quarterly, annually... |
| bundy | When a note is a liability that means you sold a note to someone and owe them interest. Accured int is then calculated as of the end of each accounting period |
| Seancfa1 | Thank-you Bundy |
| kingirm | I think it's E |