Accrued wages and taxes are secured sources of financing because companies are obligated to make these payments before they make payments on any other loans or pay dividends.

Question

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Accrued wages and taxes are liabilities, not sources of financing. They represent amounts owed by the company for wages earned by employees and taxes due to the government, not funds the company can use for its operations.

Accrued Wages and Taxes Are Secured Sources of Financing Because