Accrued Liabilities

question 78

Multiple Choice

Accrued liabilities:

• A)Are generally paid in services rather than cash.
• B)Result from payment before services are received.
• C)Result from services received before payment.
• D)Are deferred charges to expense.

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Definitions:

Credit Policy

Credit policy refers to the guidelines that a company follows to determine the credit terms under which it will extend credit to its customers.

Severe Cash Flow

A situation where a business or individual experiences extreme difficulties in generating enough cash to cover operating expenses or meet financial obligations.

Liberal Credit Policy

A liberal credit policy is a financial strategy where companies extend credit terms to customers more freely, aiming to increase sales volume by allowing more flexible payment options.

Economic Order Quantity

A calculation used to determine the optimal order size that minimizes the sum of carrying costs and ordering costs in inventory management.