Question 1

The characteristics of a liability include:

Accepted Answer

A)  Requirement of future payment of assets or rendering of services. 
B)  A liability can be current or noncurrent. 
C)  Occurrence of a past transaction or event. 
D)  Existence of a present obligation. 
E)  All of these answers are correct. 
A)  Requirement of future payment of assets or rendering of services. 
B)  A liability can be current or noncurrent. 
C)  Occurrence of a past transaction or event. 
D)  Existence of a present obligation. 
E)  All of these answers are correct.

Question 2

Liabilities:

Accepted Answer

A)  Must have a known payee. 
B)  Must have a date for payment. 
C)  Must be certain. 
D)  Can be reliably estimated. 
E)  Must be for a specific amount. 
A)  Must have a known payee. 
B)  Must have a date for payment. 
C)  Must be certain. 
D)  Can be reliably estimated. 
E)  Must be for a specific amount.

Question 3

Both partnerships and corporations calculate an income tax liability based on their taxable incomes, but proprietorships do not.

Accepted Answer

A) True 
 B)False

Question 4

Discuss the types of estimated liabilities.

Accepted Answer

Estimated liabilities are known obligati

Question 5

Fees accepted in advance from a client:

Accepted Answer

A)  Are recorded as earned revenues on the income statement. 
B)  Are recorded as liabilities. 
C)  Do not increase assets. 
D)  Increase income. 
E)  None of these answers is correct. 
A)  Are recorded as earned revenues on the income statement. 
B)  Are recorded as liabilities. 
C)  Do not increase assets. 
D)  Increase income. 
E)  None of these answers is correct.

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

The employer should record payroll deductions as:

Accepted Answer

A)  Employee receivables. 
B)  Current liabilities. 
C)  Wages payable. 
D)  Employee payables. 
E)  Payroll taxes expense. 
A)  Employee receivables. 
B)  Current liabilities. 
C)  Wages payable. 
D)  Employee payables. 
E)  Payroll taxes expense.

Question 8

Obligations due to be paid within one year or the company's operating cycle, whichever is longer, are:

Accepted Answer

A)  Non current liabilities. 
B)  Revenues. 
C)  Operating cycle liabilities. 
D)  Current assets. 
E)  Current liabilities. 
A)  Non current liabilities. 
B)  Revenues. 
C)  Operating cycle liabilities. 
D)  Current assets. 
E)  Current liabilities.

Question 9

The accounting for a contingent liability is the same as for a provision.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

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

Question 11

MiniCompany borrowed $6,000 by signing an 8% interest-bearing 45-day note payable in exchange for an overdue accounts payable. To record this transaction, MiniCompany should prepare a journal entry that includes a:

Accepted Answer

A)  Credit to Accounts Payable for $6,000. 
B)  Debit to Cash for $6,000. 
C)  Credit to Notes Payable for $6,000. 
D)  Debit to Cash for $6,300. 
E)  Debit to Notes Payable for $6,000. 
A)  Credit to Accounts Payable for $6,000. 
B)  Debit to Cash for $6,000. 
C)  Credit to Notes Payable for $6,000. 
D)  Debit to Cash for $6,300. 
E)  Debit to Notes Payable for $6,000.

Question 12

Provisions must be recorded if:

Accepted Answer

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

Question 13

The difference between the amount received from a note payable and the amount repaid is:

Accepted Answer

A)  Premium. 
B)  Interest. 
C)  Face value. 
D)  Discount. 
E)  Principal. 
A)  Premium. 
B)  Interest. 
C)  Face value. 
D)  Discount. 
E)  Principal.

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

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 17

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

Accepted Answer

A) True 
 B)False

Question 18

Accounts payable:

Accepted Answer

A)  Are amounts owed to suppliers for products and services purchased on credit. 
B)  Have specific due dates. 
C)  Are estimated liabilities. 
D)  Are long-term liabilities. 
E)  All of these answers are correct. 
A)  Are amounts owed to suppliers for products and services purchased on credit. 
B)  Have specific due dates. 
C)  Are estimated liabilities. 
D)  Are long-term liabilities. 
E)  All of these answers are correct.

Question 19

Promissory notes:

Accepted Answer

A)  Can be transferred from party to party by endorsement. 
B)  Are due on a specific date. 
C)  Can be current or non-current. 
D)  Are negotiable. 
E)  All of these answers are correct. 
A)  Can be transferred from party to party by endorsement. 
B)  Are due on a specific date. 
C)  Can be current or non-current. 
D)  Are negotiable. 
E)  All of these answers are correct.

Question 20

Kirland performed warranty repair work for a customer which cost $800. The journal entry to record the work should be a debit of $800 to Warranty Expense and a $800credit to Estimated Warranty Liability.

Accepted Answer

A) True 
 B)False

The characteristics of a liability include:

Liabilities:

Both partnerships and corporations calculate an income tax liability based on their taxable incomes, but proprietorships do not.

Discuss the types of estimated liabilities.

Fees accepted in advance from a client:

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

The employer should record payroll deductions as:

Obligations due to be paid within one year or the company's operating cycle, whichever is longer, are:

The accounting for a contingent liability is the same as for a provision.

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

MiniCompany borrowed $6,000 by signing an 8% interest-bearing 45-day note payable in exchange for an overdue accounts payable. To record this transaction, MiniCompany should prepare a journal entry that includes a:

Provisions must be recorded if:

The difference between the amount received from a note payable and the amount repaid is:

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

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

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.

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

Accounts payable:

Promissory notes:

Kirland performed warranty repair work for a customer which cost $800. The journal entry to record the work should be a debit of $800 to Warranty Expense and a $800credit to Estimated Warranty Liability.

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

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Exam 10: Current Liabilities

The characteristics of a liability include:

Liabilities:

Both partnerships and corporations calculate an income tax liability based on their taxable incomes, but proprietorships do not.

Discuss the types of estimated liabilities.

Fees accepted in advance from a client:

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

The employer should record payroll deductions as:

Obligations due to be paid within one year or the company's operating cycle, whichever is longer, are:

The accounting for a contingent liability is the same as for a provision.

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

MiniCompany borrowed $6,000 by signing an 8% interest-bearing 45-day note payable in exchange for an overdue accounts payable. To record this transaction, MiniCompany should prepare a journal entry that includes a:

Provisions must be recorded if:

The difference between the amount received from a note payable and the amount repaid is:

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

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

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.

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

Accounts payable:

Promissory notes:

Kirland performed warranty repair work for a customer which cost $800. The journal entry to record the work should be a debit of $800 to Warranty Expense and a $800credit to Estimated Warranty Liability.

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