In the context of working capital an accrual is not:
A)an estimate of an obligation of the firm.
B)effectively a short term loan from the unpaid supplier of services.
C)an adjustment to the accrued depreciation account.
D)a source of spontaneous financing.

Question

Quizplus · Accepted Answer

An accrual is an estimate of an obligation of the firm, typically for services or goods received but not yet paid for. It is effectively a short term loan from the unpaid supplier of services or goods. It is also a source of spontaneous financing. However, it is not an adjustment to the accrued depreciation account, which is a separate account used to record the decline in value of a fixed asset over time.

In the Context of Working Capital an Accrual Is Not