Question 1

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 2

Provincial sales tax payable:

Accepted Answer

A)  Is a contingent liability. 
B)  Is an estimated liability. 
C)  Is a business expense. 
D)  Is a current liability for retailers. 
E)  All of these answers are correct. 
A)  Is a contingent liability. 
B)  Is an estimated liability. 
C)  Is a business expense. 
D)  Is a current liability for retailers. 
E)  All of these answers are correct.

Question 3

The current portion of long-term debt:

Accepted Answer

A)  Will be a known amount. 
B)  Is shown separately from the long term portion on the balance sheet. 
C)  Refers to the part of long-term debt that is due within one year. 
D)  Must be disclosed. 
E)  All of these answers are correct. 
A)  Will be a known amount. 
B)  Is shown separately from the long term portion on the balance sheet. 
C)  Refers to the part of long-term debt that is due within one year. 
D)  Must be disclosed. 
E)  All of these answers are correct.

Question 4

A contingent liability:

Accepted Answer

A)  Is a potential obligation that depends on a future event arising out of a past transaction. 
B)  Is an obligation not requiring immediate payment. 
C)  Is a liability of a specific amount. 
D)  Is an obligation arising from the purchase of goods or services on credit. 
E)  None of these answers is correct. 
A)  Is a potential obligation that depends on a future event arising out of a past transaction. 
B)  Is an obligation not requiring immediate payment. 
C)  Is a liability of a specific amount. 
D)  Is an obligation arising from the purchase of goods or services on credit. 
E)  None of these answers is correct.

Question 5

Which of the following accounting policy is being observed when we recognize a warranty obligation?

Accepted Answer

A)  Materiality 
B)  Consistency 
C)  Full disclosure 
D)  Matching 
E)  Timeliness 
A)  Materiality 
B)  Consistency 
C)  Full disclosure 
D)  Matching 
E)  Timeliness

Question 6

Payroll liabilities for current employees are:

Accepted Answer

A)  Current liabilities. 
B)  Can be either current or long-term depending on when workers retire. 
C)  Estimated liabilities. 
D)  Contingent liabilities. 
E)  None of these answers is correct. 
A)  Current liabilities. 
B)  Can be either current or long-term depending on when workers retire. 
C)  Estimated liabilities. 
D)  Contingent liabilities. 
E)  None of these answers is correct.

Question 7

A liability exists because of a past event that creates a future obligation for future sacrifices.

Accepted Answer

A) True 
 B)False

Question 8

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 9

The receipt of $6,000 in advance ticket sales would be recorded as:

Accepted Answer

A)  Debit Unearned Revenue, credit Sales. 
B)  Debit Sales, credit Unearned Revenue. 
C)  Debit Unearned Revenue, credit Cash. 
D)  Debit Cash, credit Unearned Revenue. 
E)  Debit Cash, credit Revenue Payable. 
A)  Debit Unearned Revenue, credit Sales. 
B)  Debit Sales, credit Unearned Revenue. 
C)  Debit Unearned Revenue, credit Cash. 
D)  Debit Cash, credit Unearned Revenue. 
E)  Debit Cash, credit Revenue Payable.

Question 10

Obligations not expected to be paid within one year are reported as:

Accepted Answer

A)  Revenues. 
B)  Current liabilities. 
C)  Current assets. 
D)  Long term liabilities. 
E)  Operating cycle liabilities. 
A)  Revenues. 
B)  Current liabilities. 
C)  Current assets. 
D)  Long term liabilities. 
E)  Operating cycle liabilities.

Question 11

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

Accepted Answer

A) True 
 B)False

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

Provincial sales tax payable:

The current portion of long-term debt:

A contingent liability:

Which of the following accounting policy is being observed when we recognize a warranty obligation?

Payroll liabilities for current employees are:

A liability exists because of a past event that creates a future obligation for future sacrifices.

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

The receipt of $6,000 in advance ticket sales would be recorded as:

Obligations not expected to be paid within one year are reported as:

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

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

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

Provincial sales tax payable:

The current portion of long-term debt:

A contingent liability:

Which of the following accounting policy is being observed when we recognize a warranty obligation?

Payroll liabilities for current employees are:

A liability exists because of a past event that creates a future obligation for future sacrifices.

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

The receipt of $6,000 in advance ticket sales would be recorded as:

Obligations not expected to be paid within one year are reported as:

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

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