Question

A city borrows $800,000 in January because it does not receive property taxes until May. It borrows on a tax anticipation note, which it will repay in May when taxes are collected. How would the city classify the note if it were to prepare governmental-type fund financial statements on March 31?

Answer 1

Liability

Step-by-step explanation:

Liabilities are the company's, in this case the city's, legal financial debts or obligations that arise during the course of its operations.