Section 2: 30–40%2G
Payables and Accrued Liabilities
Payables represent what the company owes. The exam tests proper classification (current vs. non-current), accrual accounting for expenses incurred but not yet paid, refinancing agreements, and deferred revenue. These topics appear in both MCQ and simulation formats.
What AICPA Wants You to Know
- 1Classify liabilities as current vs. non-current using the one-year or operating cycle rule
- 2Apply the refinancing exception for short-term debt to be classified as long-term
- 3Record accrued liabilities for wages, interest, warranties, and bonuses
- 4Account for deferred revenue and when it converts to earned revenue
- 5Identify the current portion of long-term debt