- CFA Exams
- CFA Level I Exam
- Study Session 7. Financial Reporting and Analysis (2)
- Reading 21. Understanding Income Statements
- Subject 5. Expense Recognition
CFA Practice Question
All of the following are examples of "accrued expense" types of liabilities except the liability for ______.
A. short-term notes taken out at a bank during the year
B. property taxes owed to local governments for the year
C. estimated product warranty costs on products sold during the year
Explanation: Salaries and wages owed to employees at the end of the year are also accrued expenses.
User Contributed Comments 6
| User | Comment |
|---|---|
| Trex | Short-term notes are paid within 90 days or less, so there will not be accruels on this case. |
| Mirza99 | if a note is of 90-days then it doesnt mean there will not be an accrual... e.g., the note is purchased on 15th december and the year ends at 30th dec OR you purchase a note on 15 may while it was issued on 15th april. |
| o123 | yeah mirza...but they've clarified that its during the year |
| StanleyMo | short term is not expense. |
| zeiad | good stanleyMO |
| bidisha | Ie short term assets & short term liabilities |