Question 1

A company can have a liability even if the amount of the obligation is uncertain.

Accepted Answer

A) True 
 B)False

Question 2

Payroll liabilities for current employees are

Accepted Answer

A) contingent liabilities. 
B) estimated liabilities. 
C) can be either current or long-term depending on when workers retire. 
D) current liabilities. 
E) none of these. 
A) contingent liabilities. 
B) estimated liabilities. 
C) can be either current or long-term depending on when workers retire. 
D) current liabilities. 
E) none of these.

Question 3

Goods and Services Tax (GST)is not paid by a wholesaler.

Accepted Answer

A) True 
 B)False

Question 4

An estimated liability is a known obligation of an uncertain amount that can be reasonably estimated.

Accepted Answer

A) True 
 B)False

Question 5

On November 16,2020,Source for Sports gave Kinsmen Sports a 90-day,12%,$120,000 note payable to extend a past due account payable.Prepare the journal entry for Source for Sports to record the note and the extension of the past due account.

Accepted Answer

The answer of On November 16,2020,Source for Sports gave Kinsmen...

Question 6

The Toronto Raptors received $6 million in season ticket sales.Prior to the beginning of the basketball season,these sales are recorded as a credit to unearned season ticket revenue.

Accepted Answer

A) True 
 B)False

Question 7

Buy Best Company sells personal computers for $2,300 each.The price includes a two-year warranty.During 2020,the company sells 600 computers.On the basis of past experience,the warranty costs are estimated to be $150 per computer.The actual warranty costs paid by Buy Best during 2020 were $45,000.Prepare general journal entries to record the estimated warranty expense and the warranty payments during 2020.

Accepted Answer

The answer of Buy Best Company sells personal computers for...

Question 8

Promissory notes

Accepted Answer

A) are negotiable. 
B) can be transferred from party to party by endorsement. 
C) are due on a specific date. 
D) can be current or non-current. 
E) all of these. 
A) are negotiable. 
B) can be transferred from party to party by endorsement. 
C) are due on a specific date. 
D) can be current or non-current. 
E) all of these.

Question 9

Unearned revenues are

Accepted Answer

A) Amounts received in advance from customers for future delivery of products or services 
B) Not recorded as liabilities 
C) The same as accrued revenues 
D) Reduce assets 
E) All of these 
A) Amounts received in advance from customers for future delivery of products or services 
B) Not recorded as liabilities 
C) The same as accrued revenues 
D) Reduce assets 
E) All of these

Question 10

A short-term note payable is a written promise to pay a specified amount on a specified future date within one year or the payee's operating cycle,whichever is shorter.

Accepted Answer

A) True 
 B)False

Question 11

On November 16,Ray Co.borrowed $40,000 from CRB Bank.The loan had an interest rate of 11% and was due in 90 days.Prepare the journal entry to record the payment of the note on Ray's books,assuming an adjusting entry was made at December 31st,Ray Co.'s year end.

Accepted Answer

The answer of On November 16,Ray Co.borrowed $40,000 from CRB...

Question 12

A pending lawsuit is an example of a contingent liability.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is created by the adjusting entry to recognize interest expense incurred but not yet paid?

Accepted Answer

A) Prepaid interest 
B) Unearned revenue 
C) Interest revenue 
D) Interest expense 
E) Notes payable 
A) Prepaid interest 
B) Unearned revenue 
C) Interest revenue 
D) Interest expense 
E) Notes payable

Question 14

A warranty is a contingent liability.

Accepted Answer

A) True 
 B)False

Question 15

Estimated liabilities can arise from

Accepted Answer

A) warranties. 
B) property taxes. 
C) income taxes. 
D) employee benefits. 
E) all of these. 
A) warranties. 
B) property taxes. 
C) income taxes. 
D) employee benefits. 
E) all of these.

Question 16

Employee vacation benefits

Accepted Answer

A) are estimated liabilities. 
B) are contingent liabilities. 
C) become an expense when the employee takes a vacation. 
D) are not recorded until the employee leaves. 
E) are not required by law. 
A) are estimated liabilities. 
B) are contingent liabilities. 
C) become an expense when the employee takes a vacation. 
D) are not recorded until the employee leaves. 
E) are not required by law.

Question 17

Amounts received in advance from a customer for future products or services are initially recorded as liabilities.

Accepted Answer

A) True 
 B)False

Question 18

Pending lawsuits

Accepted Answer

A) Are always considered estimated liabilities 
B) Should always be recorded 
C) Should always be disclosed 
D) Should be disclosed if payment for damages is probable but the amount cannot be reliably estimated 
E) None of these 
A) Are always considered estimated liabilities 
B) Should always be recorded 
C) Should always be disclosed 
D) Should be disclosed if payment for damages is probable but the amount cannot be reliably estimated 
E) None of these

Question 19

Discuss how to account for contingent liabilities.

Accepted Answer

A contingent liability exists when the l

Question 20

Provisions must be recorded if

Accepted Answer

A) The future event is probable,and the amount can be reliably estimated. 
B) The future event is unlikely. 
C) The future event is probable,but the amount cannot be estimated. 
D) The future event is unlikely,but the amount can be reliably estimated. 
E) All of these answers are correct. 
A) The future event is probable,and the amount can be reliably estimated. 
B) The future event is unlikely. 
C) The future event is probable,but the amount cannot be estimated. 
D) The future event is unlikely,but the amount can be reliably estimated. 
E) All of these answers are correct.

A company can have a liability even if the amount of the obligation is uncertain.

Payroll liabilities for current employees are

Goods and Services Tax (GST)is not paid by a wholesaler.

An estimated liability is a known obligation of an uncertain amount that can be reasonably estimated.

On November 16,2020,Source for Sports gave Kinsmen Sports a 90-day,12%,$120,000 note payable to extend a past due account payable.Prepare the journal entry for Source for Sports to record the note and the extension of the past due account.

The Toronto Raptors received $6 million in season ticket sales.Prior to the beginning of the basketball season,these sales are recorded as a credit to unearned season ticket revenue.

Promissory notes

Unearned revenues are

A short-term note payable is a written promise to pay a specified amount on a specified future date within one year or the payee's operating cycle,whichever is shorter.

On November 16,Ray Co.borrowed $40,000 from CRB Bank.The loan had an interest rate of 11% and was due in 90 days.Prepare the journal entry to record the payment of the note on Ray's books,assuming an adjusting entry was made at December 31st,Ray Co.'s year end.

A pending lawsuit is an example of a contingent liability.

Which of the following is created by the adjusting entry to recognize interest expense incurred but not yet paid?

A warranty is a contingent liability.

Estimated liabilities can arise from

Employee vacation benefits

Amounts received in advance from a customer for future products or services are initially recorded as liabilities.

Pending lawsuits

Discuss how to account for contingent liabilities.

Provisions must be recorded if

Property, plant and Equipment Intangibles

Partnerships

Organization and Operation of Corporations

Corporate Reporting: Income, earnings Per Share, and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

Filters

Exam 2: Current Liabilities

A company can have a liability even if the amount of the obligation is uncertain.

Payroll liabilities for current employees are

Goods and Services Tax (GST)is not paid by a wholesaler.

An estimated liability is a known obligation of an uncertain amount that can be reasonably estimated.

On November 16,2020,Source for Sports gave Kinsmen Sports a 90-day,12%,$120,000 note payable to extend a past due account payable.Prepare the journal entry for Source for Sports to record the note and the extension of the past due account.

The Toronto Raptors received $6 million in season ticket sales.Prior to the beginning of the basketball season,these sales are recorded as a credit to unearned season ticket revenue.

Promissory notes

Unearned revenues are

A short-term note payable is a written promise to pay a specified amount on a specified future date within one year or the payee's operating cycle,whichever is shorter.

On November 16,Ray Co.borrowed $40,000 from CRB Bank.The loan had an interest rate of 11% and was due in 90 days.Prepare the journal entry to record the payment of the note on Ray's books,assuming an adjusting entry was made at December 31st,Ray Co.'s year end.

A pending lawsuit is an example of a contingent liability.

Which of the following is created by the adjusting entry to recognize interest expense incurred but not yet paid?

A warranty is a contingent liability.

Estimated liabilities can arise from

Employee vacation benefits

Amounts received in advance from a customer for future products or services are initially recorded as liabilities.

Pending lawsuits

Discuss how to account for contingent liabilities.

Provisions must be recorded if

Property, plant and Equipment Intangibles

Partnerships

Organization and Operation of Corporations

Corporate Reporting: Income, earnings Per Share, and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

Filters