Question 1

A note payable can be used to extend the credit period for an account payable.

Accepted Answer

A) True 
 B)False

Question 2

The relevance principle requires that contingent assets be recorded.

Accepted Answer

A) True 
 B)False

Question 3

Explain the concept of interest.

Accepted Answer

Interest represents

Question 4

Management can withhold any information regarding future events if releasing the information could cause a share price decline.

Accepted Answer

A) True 
 B)False

Question 5

Known liabilities

Accepted Answer

A) have definite due dates. 
B) are set by agreements,contracts,or laws. 
C) are measurable. 
D) have a known payee. 
E) all of these. 
A) have definite due dates. 
B) are set by agreements,contracts,or laws. 
C) are measurable. 
D) have a known payee. 
E) all of these.

Question 6

At their fiscal year end,Lorax Corp has an (unadjusted)$62,000 credit balance in their Income Tax Payable account.However,a review reveals that the actual liability is $70,000.Lorax Corp should prepare an adjusting entry to debit Income Tax Expense for $8,000 and credit Income Taxes Payable for $8,000.

Accepted Answer

A) True 
 B)False

Question 7

Explain known current liabilities.

Accepted Answer

Known current liabilities are determined

Question 8

Contingent liabilities occur when the liability is

Accepted Answer

A) Probable and can be reliably estimated 
B) Cannot be reliably estimated 
C) Known and determinable 
D) Reliably estimated 
E) All of these 
A) Probable and can be reliably estimated 
B) Cannot be reliably estimated 
C) Known and determinable 
D) Reliably estimated 
E) All of these

Question 9

The stated interest rate on a short-term note payable is to compensate for the time until payment is made.

Accepted Answer

A) True 
 B)False

Question 10

Unearned revenue is initially recognized with a

Accepted Answer

A) credit to revenue payable. 
B) credit to revenue. 
C) credit to unearned revenue. 
D) debit to revenue. 
E) debit to unearned revenue. 
A) credit to revenue payable. 
B) credit to revenue. 
C) credit to unearned revenue. 
D) debit to revenue. 
E) debit to unearned revenue.

Question 11

The matching principle requires that the total interest expense be allocated over the term of the note.

Accepted Answer

A) True 
 B)False

Question 12

During 2020,Hans Electronics sold 350 microwaves each at $1,050 per unit.Each microwave has one-year warranty.Hans estimates it will cost them $82 per unit,if a unit is brought in under warranty for repair.During 2020,Smith spent $17,500 on warranty costs for the appliances sold in 2020.At the end of the 2020 the warranty liability and the warranty expense related to these sales would be

Accepted Answer

A) Warranty liability: 17,500; Warranty expense: 17,500 
B) Warranty liability: 15,500; Warranty expense: 15,500 
C) Warranty liability: 15,500; Warranty expense: 17,500 
D) Warranty liability: 11,200; Warranty expense: 17,500 
E) Warranty liability: 17,500; Warranty expense: 15,200 
A) Warranty liability: 17,500; Warranty expense: 17,500 
B) Warranty liability: 15,500; Warranty expense: 15,500 
C) Warranty liability: 15,500; Warranty expense: 17,500 
D) Warranty liability: 11,200; Warranty expense: 17,500 
E) Warranty liability: 17,500; Warranty expense: 15,200

Question 13

A company's obligations not expected to be paid within the longer of one year of the balance sheet date or the next operating cycle are reported as current liabilities.

Accepted Answer

A) True 
 B)False

Question 14

On April 18,Valley Sports gave a 120-day note payable to Slick Snowboards,instead of cash payment of an overdue account.The amount of the note was $185,000 at an interest rate of 11%.Prepare the journal entry on Valley Sports books to record the note payable.

Accepted Answer

The answer of On April 18,Valley Sports gave a 120-day...

Question 15

Contingent assets should be recognized as soon as they are probable and can be reliably estimated.

Accepted Answer

A) True 
 B)False

Question 16

On June 14,Multi Sports received a 90-day note payable from Single Sport,instead of cash payment of an overdue account.The amount of the note was $45,000 at an interest rate of 10%.What is the total amount of interest for the note?

Accepted Answer

$1,109.59

Question 17

Known liabilities are agreements,contracts,or laws that are measurable and have little uncertainty.

Accepted Answer

A) True 
 B)False

Question 18

Recording provisions is required when it is probable that the liability will occur,and the amount can be reasonably estimated.

Accepted Answer

A) True 
 B)False

Question 19

Provincial Sales Tax Payable is a tax levied on sales to all final consumers of taxable products.

Accepted Answer

A) True 
 B)False

Question 20

Unearned revenue is another name for sales revenue.

Accepted Answer

A) True 
 B)False

A note payable can be used to extend the credit period for an account payable.

The relevance principle requires that contingent assets be recorded.

Explain the concept of interest.

Management can withhold any information regarding future events if releasing the information could cause a share price decline.

Known liabilities

Explain known current liabilities.

Contingent liabilities occur when the liability is

The stated interest rate on a short-term note payable is to compensate for the time until payment is made.

Unearned revenue is initially recognized with a

The matching principle requires that the total interest expense be allocated over the term of the note.

A company's obligations not expected to be paid within the longer of one year of the balance sheet date or the next operating cycle are reported as current liabilities.

On April 18,Valley Sports gave a 120-day note payable to Slick Snowboards,instead of cash payment of an overdue account.The amount of the note was $185,000 at an interest rate of 11%.Prepare the journal entry on Valley Sports books to record the note payable.

Contingent assets should be recognized as soon as they are probable and can be reliably estimated.

On June 14,Multi Sports received a 90-day note payable from Single Sport,instead of cash payment of an overdue account.The amount of the note was $45,000 at an interest rate of 10%.What is the total amount of interest for the note?

Known liabilities are agreements,contracts,or laws that are measurable and have little uncertainty.

Recording provisions is required when it is probable that the liability will occur,and the amount can be reasonably estimated.

Provincial Sales Tax Payable is a tax levied on sales to all final consumers of taxable products.

Unearned revenue is another name for sales revenue.

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

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Exam 2: Current Liabilities

A note payable can be used to extend the credit period for an account payable.

The relevance principle requires that contingent assets be recorded.

Explain the concept of interest.

Management can withhold any information regarding future events if releasing the information could cause a share price decline.

Known liabilities

Explain known current liabilities.

Contingent liabilities occur when the liability is

The stated interest rate on a short-term note payable is to compensate for the time until payment is made.

Unearned revenue is initially recognized with a

The matching principle requires that the total interest expense be allocated over the term of the note.

A company's obligations not expected to be paid within the longer of one year of the balance sheet date or the next operating cycle are reported as current liabilities.

On April 18,Valley Sports gave a 120-day note payable to Slick Snowboards,instead of cash payment of an overdue account.The amount of the note was $185,000 at an interest rate of 11%.Prepare the journal entry on Valley Sports books to record the note payable.

Contingent assets should be recognized as soon as they are probable and can be reliably estimated.

On June 14,Multi Sports received a 90-day note payable from Single Sport,instead of cash payment of an overdue account.The amount of the note was $45,000 at an interest rate of 10%.What is the total amount of interest for the note?

Known liabilities are agreements,contracts,or laws that are measurable and have little uncertainty.

Recording provisions is required when it is probable that the liability will occur,and the amount can be reasonably estimated.

Provincial Sales Tax Payable is a tax levied on sales to all final consumers of taxable products.

Unearned revenue is another name for sales revenue.

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