Module I· Interview Essentials AccountingIntermediate
Question
An accrued expense of 50 is booked. Three-statement impact? Tax rate 25%.
Answer
NI -37.5; accrued liabilities +50; cash +12.5; retained earnings -37.5.
Deep diveShow more details
When the accrued expense is later paid, cash and the liability both fall, with no new P&L impact.