CFA Practice Question

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CFA Practice Question

Interest on a note payable is most appropriately accrued ______

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
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