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WAEC Financial Accounting 2011 Question 3

Question 3

Accruals and Prepayments

Expenses accrued at the end of the accounting year is treated in the balance sheet as

  1. A.current assets
  2. B.current liability
  3. C.fixed assets
  4. D.long-term liability
Show the answer and explanation

Answer: B (current liability)

Explanation

Accrued expenses are owed and will be paid soon, so they are a current liability.