When a company determines that there is an amount that it currently owes but has not yet recorded, that company will record a(an)
A) prepaid asset acount.
B) current asset account.
C) intangible asset account.
D) accrued liability account.
E) equity account.

Question

Quizplus · Accepted Answer

An accrued liability account is used to record amounts that a company owes but has not yet paid or recorded. This is in line with the accrual basis of accounting, where expenses are recognized when incurred, not necessarily when paid.

When a Company Determines That There Is an Amount That