Question 1

Pending lawsuits:

Accepted Answer

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

Question 2

A liability is a future payment of assets or services that a company is currently obligated to make as a result of past transactions or events.

Accepted Answer

A) True 
 B)False

Question 3

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 ticketrevenue.

Accepted Answer

A) True 
 B)False

Question 4

Known liabilities:

Accepted Answer

A)  Are measurable. 
B)  Have a known payee. 
C)  Are set by agreements, contracts, or laws. 
D)  Have definite due dates. 
E)  All of these answers are correct. 
A)  Are measurable. 
B)  Have a known payee. 
C)  Are set by agreements, contracts, or laws. 
D)  Have definite due dates. 
E)  All of these answers are correct.

Question 5

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 6

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

Accepted Answer

A) True 
 B)False

Question 7

Sales taxes payable is credited and cash is debited when firms send sales taxes collected from customers to the government.

Accepted Answer

A) True 
 B)False

Question 8

Gross pay is the same as net pay.

Accepted Answer

A) True 
 B)False

Question 9

Contingent liabilities occur when the liability is:

Accepted Answer

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

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

All expected future payments are liabilities.

Accepted Answer

A) True 
 B)False

Question 12

Unearned revenue is initially recognized with a:

Accepted Answer

A)  Credit to unearned revenue. 
B)  Credit to revenue. 
C)  Debit to unearned revenue. 
D)  Debit to revenue. 
E)  Credit to revenue payable. 
A)  Credit to unearned revenue. 
B)  Credit to revenue. 
C)  Debit to unearned revenue. 
D)  Debit to revenue. 
E)  Credit to revenue payable.

Question 13

Unearned revenues are:

Accepted Answer

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

Question 14

Uncertainties such as doubtful accounts:

Accepted Answer

A)  Should not be disclosed. 
B)  Are provisions because they are future events arising from past transactions. 
C)  Are not provisions since they relate to normal business activities. 
D)  Are not provisions because they are future events not arising out of past transactions. 
E)  Are provisions because the amounts are uncertain. 
A)  Should not be disclosed. 
B)  Are provisions because they are future events arising from past transactions. 
C)  Are not provisions since they relate to normal business activities. 
D)  Are not provisions because they are future events not arising out of past transactions. 
E)  Are provisions because the amounts are uncertain.

Question 15

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 16

Short-term notes payable:

Accepted Answer

A)  Are usually interest bearing. 
B)  Are recorded as current liabilities. 
C)  Usually represent money borrowed from a bank. 
D)  Can replace an account payable. 
E)  All of these answers are correct. 
A)  Are usually interest bearing. 
B)  Are recorded as current liabilities. 
C)  Usually represent money borrowed from a bank. 
D)  Can replace an account payable. 
E)  All of these answers are correct.

Question 17

Trade accounts payable are amounts owed to suppliers for products or services purchased on credit.

Accepted Answer

A) True 
 B)False

Question 18

Long-term liabilities are obligations of a company requiring payment within one year.

Accepted Answer

A) True 
 B)False

Question 19

Gross pay is:

Accepted Answer

A)  Total compensation earned by an employee. 
B)  Deductions withheld by an employer. 
C)  Take-home pay. 
D)  Salaries after taxes are deducted. 
E)  The amount of the paycheque. 
A)  Total compensation earned by an employee. 
B)  Deductions withheld by an employer. 
C)  Take-home pay. 
D)  Salaries after taxes are deducted. 
E)  The amount of the paycheque.

Question 20

Estimated liabilities can arise from:

Accepted Answer

A)  Property taxes. 
B)  Income taxes. 
C)  Employee benefits. 
D)  Warranties. 
E)  All of these answers are correct. 
A)  Property taxes. 
B)  Income taxes. 
C)  Employee benefits. 
D)  Warranties. 
E)  All of these answers are correct.

Pending lawsuits:

A liability is a future payment of assets or services that a company is currently obligated to make as a result of past transactions or events.

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 ticketrevenue.

Known liabilities:

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

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

Sales taxes payable is credited and cash is debited when firms send sales taxes collected from customers to the government.

Gross pay is the same as net pay.

Contingent liabilities occur when the liability is:

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

All expected future payments are liabilities.

Unearned revenue is initially recognized with a:

Unearned revenues are:

Uncertainties such as doubtful accounts:

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.

Short-term notes payable:

Trade accounts payable are amounts owed to suppliers for products or services purchased on credit.

Long-term liabilities are obligations of a company requiring payment within one year.

Gross pay is:

Estimated liabilities can arise from:

Property, Plant and Equipment and Intangibles

Partnerships

Organization and Operation of Corporations

Corporate Reporting: Profit, 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 10: Current Liabilities

Pending lawsuits:

A liability is a future payment of assets or services that a company is currently obligated to make as a result of past transactions or events.

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 ticketrevenue.

Known liabilities:

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

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

Sales taxes payable is credited and cash is debited when firms send sales taxes collected from customers to the government.

Gross pay is the same as net pay.

Contingent liabilities occur when the liability is:

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

All expected future payments are liabilities.

Unearned revenue is initially recognized with a:

Unearned revenues are:

Uncertainties such as doubtful accounts:

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.

Short-term notes payable:

Trade accounts payable are amounts owed to suppliers for products or services purchased on credit.

Long-term liabilities are obligations of a company requiring payment within one year.

Gross pay is:

Estimated liabilities can arise from:

Property, Plant and Equipment and Intangibles

Partnerships

Organization and Operation of Corporations

Corporate Reporting: Profit, 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