Accrued wages and accrued taxes are considered to be
A) permanent sources of financing because companies must always pay wages and taxes.
B) spontaneous sources of unsecured short-term financing.
C) secured sources of short-term financing.
D) current assets.

Question

Quizplus · Accepted Answer

Accrued wages and accrued taxes are classified as spontaneous sources of unsecured short-term financing as they represent expenses that have been incurred but not yet paid for. They do not require any specific action by the company to obtain financing and are typically settled within a short period. They are not considered permanent sources of financing as they relate to short-term obligations. Accrued wages and taxes are not secured sources of financing, as they do not involve collateral. They are also not classified as current assets as they represent liabilities owed by the company.

Accrued Wages and Accrued Taxes Are Considered to Be