Answered: Under AASB 101, something may be…

Under AASB 101, something may be classified as a current liability even when it is expected to be settled for a period in excess of 12 months. True or False

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 3Q: What is the difference between a noncurrent liability and a current liability?

See similar textbooks

Related questions

Q: When the amount of a contingent liability cannot be reasonably estimated but its likelihood is…

A: There are three types of contingent liabilities and their treatment SR. NO. TYPE TREATMENT…

Q: What rate is used when computing the present value of the new liability arising from modification of…

A: Present value represents the worth of money is more than in the future for the same amount.

Q: When an entity breaches under a long-term loan agreement on or before the end of the reporting…

A: If an entity expects debt to be settled in the normal operating cycle, it is classified as Current…

Q: Which of the following is most likely to be regarded as an estimated liability that is subject to…

A: Solution Concept Estimated liability that is subject to provision It means that the amount…

Q: What is the estimated liability for premium claims outstanding at December 31, (2002? Requirements:…

A: calculation for premium expenses and estimated liability are as follows

Q: In June 2019, Buwis Buhay was involved in a court case amounting to P10,000,000. The attorney…

A: As per IFRS 37 , When it is virtually certain of inflow of resources Occur then recognise "Asset"

Q: . What amount of liability from lawsuit should be reported on December 31, 2021? a. 3,500,000 b.…

A: A liability is a debt that a person or company owes to another party, usually in the form of money.…

Q: long-term basis at the end of

A: Short-term obligation are those which mature within a period of one year. Long term obligations are…

Q: Which of the following characteristic of a liability, if satisfied, would prompt the classification…

A: Current liabilities are a company's short-term financial obligations that are due within one year or…

Q: 9. Decide if the following statements are true or false and select the correct answer. If a…

A: Contingent liability are those liability which may or may not occur in future. Such liabilities…

Q: Determine the correct classification of the following liabilities: (1) Liability with a due…

A: The answer for the multiple choice question and relevant explanation are presented hereunder : The…

Q: Concord Corporation purchased a one-year insurance policy in January 2020 for $79200. The insurance…

A: The question is based on the concept of Financial Accounting.

Q: What amount should RIS report as a liability at December 31, 2021? a. P 0 b. P 26,000

A: Liability is an obligation that has to be paid by sacrificing the assets of the company. It includes…

Q: TRUE OR FALSE? A financial liability that is due within one year after the reporting period shall be…

A: The current liability is to be settled or paid within one year and long-term liabilities are those…

Q: Which of the following would not be considered a general long term liability? Select one: a. Long…

A: Short term obligations are the obligations that have to be paid within a year. whereas, long term…

Q: When an entity has a continuing policy of guaranteeing new products against defects for three years,…

A: Liability arising from the warranty which will be due within a year is reported under current…

Q: anticipated liability, which may or may not arise in future in known as a Current Liability b.…

A: ⇔Debts or obligations that must be paid within a year are referred to as current liabilities,…

Q: Which of the following is a charteristic of a current liability

A: Liability: Liability is the obligation of the company to pay which comes from a past activity done…

Q: 14. Humanizer Company gives warranties at the time of sale to purchasers of its product. Under the…

A: SOLUTION WARRANTY EXPENSE IS THE COST THAT THE BUSINESS EXPECT TO OR ALREADY INCURRED FOR THE REPAIR…

Q: All of the following are true of known liabilities except: rev: 10_02_2019_QC_CS-184070 Top of…

A: liabilities are considered as legal financial debt or obligation that arises during the course of…

Q: 1. Honest Corporation carried a provision of P1,500,000 in the draft financial statements for the…

A: As per IAS 10, Events after the reporting period, An event is said to be adjusting event if, that…

Q: What amount should be recorded as accrued liability on December 31, 2021 in relation to this event?

A: Accrued liability refers to that expenses have been incurred but not paid during an accounting…

Q: Which of the following is most likely to be classified and reported as current liability? a. Bond…

A: The liabilities that are payable within one year are classified as current liabilities. It includes…

Q: 1. What is the premium expense for the current year? 2. What amount should be reported as estimated…

A: As per accrual concept of accounting, all revenues and expense for the particular period should be…

Q: Which of the following is a characteristic of a current liability but not a non- 1 pc current…

A: Answer: The following is the characteristic of current liability and not a non-current liability:…

Q: TRUE OR FALSE? A liability is classified as noncurrent when at the end of the reporting period the…

A: Non current liability is the liability which has the right to settlement for at least 12 months…

Q: If an insured fails to pay the premium when due, the insured's heallh policy will remain in force…

A: Health insurance is a type of insurance that helps to pays for medical costs incurred as a result of…

Q: There is substantial modification of terms of an old financial liability if the gain or loss on…

A: As per IAS 39, in extinguishment accounting we will derecognise/extinguish existing liability and…

Q: The following are the rules to be observed in counting the 4-year period for prescription of an…

A: Annulment action id referred to as the legal procedure, before any of the Court of Justice, which…

Q: We discussed contingent liabilities in class. Describe the conditions for when a contingent…

A: A liability whose occurrence depends upon the happening or non happening of future uncertain events…

Q: As of December 31 of the current year, Fernandez Company has prepared the following informa-tion…

A: Requirement a:

Q: When products sold with a guarantee of free service or replacement during an extended warranty…

A: Introduction: Warranty: Warranty is given to the products. it can be free service or replacement of…

Q: There is substantial modification of a liability if the difference between the present value of the…

A: The implications of substantial modification of a liability is de-recognition of the specific…

Q: which of the following instances would a liability that would otherwise be presented as current is…

A: Liability is an obligation that has to be paid by the company by sacrificing the assets. It is…

Q: corcese Inc. is involved in a lawsuit at December 31, 2020. (a) Prepare the December 31 entry…

A: Provision is required to be made if loss is probable. If loss is not probable, provision is not…

Q: 5. Which of the following is a characteristic of a current liability? OA current liability must be…

A: Introduction: Balance sheet: All Assets and liabilities are shown in Balance sheet. It tells the net…

Q: Short-term obligation refinanced on a long-term basis at the end of the reporting period is a…

A: A liability can be classified as either Current or Long term term liability. Current Liabilities…

Q: 3. What should be reported as noncurrent liability from this transaction at December 31, 2021 after…

A: Note payable is the payable which a company is having which must have to be repaid by the company to…

Q: 8. Refer to MC No. 6. Which of the following is correct regarding the litigation case on December…

A: Liabilities that depend on the outcome of an uncertain event, must pass two criterions before they…

Q: Which of the following shall not be classified as current liability? * An obligation to be settled…

A: The balance sheet is the statement of financial position of the business.

Q: An entity classifies the obligation as non-current if an entity expects, and has the discretion, to…

A: True Explanation: As per, IAS 1 Presentation of Financial Statements Current/non-current…

Q: n the case of a non-adjusting event, IAS 10 requires it to be: Select one alternative: disclosed…

A: Solution: In the case of a non-adjusting event, IAS 10 requires it to be "disclosed by way of note…

Concept explainers

Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.

Question

Under AASB 101, something may be classified
as a current liability even when it is expected
to be settled for a period in excess of 12
months.
True or False

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1 Explanation:

VIEW

Step 2 Solution:

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

There is substantial modification of terms of an old financial liability if the gain or loss on extinguishment is *a. At least 10% of the old liabilityb. Less than 10% of the old liabilityc. At least 10% of the new liabilityd. Less than 10% of the new liability
*see attached What amount should RIS report as a liability at December 31, 2021?a. P 0b. P 26,000c. P 38,000d. P 116,000
TRUE OR FALSE? Short-term obligation refinanced on a long-term basis at the end of the reporting period is a current liability.
Which of the following is most likely to be regarded as an estimated liability that is subject to provision? a. Deferred revenues b. Current portion of a long-term debt c. Payroll liabilities d. Vacation pay liability
According to FASB, when should a company journalize a contingent liability? A. Do not journalize the contingent liability under any circumstances. B. Journalize the contingent liability, even though you will probably win the lawsuit. C. Journalize the contingent liability only if the amount can be estimated and the probability of loss is reasonably possible. D. Journalize the contingent liability if it is probable that the loss will occur, and the amount of the loss can be reasonably estimated. thanks for help appareciated it rajtir h
Which of the following is a charteristic of a current liability? A)a current liability must be of a known amount B)a current liability is due within one year or one operating cycle, whichever is longer C)a current liability must be of an estimated amount D)current liability’s are subtracted from long term liabilities on the balance sheet
Which of the following would not be considered a general long term liability?Select one:a. Long term promissory notesb. Long term portion of judgementc. Unfunded compensated absencesd. Unfunded rent obligation
The premium liability at December 31, 2021 is *see attached a. P 16,875b. P 31,875c. P 33,750d. P 63,750
In the case of a non-adjusting event, IAS 10 requires it to be: Select one alternative: disclosed as a contingent liability, if it is an unfavourable material event reflected in the financial statements if it is material and relates to an item that would normally be included in the financial statements disclosed by way of note if it is material reflected in the financial statements, if it is an unfavourable material event; disclosed by way of a note, if it is a favourable event
What are the criteria for classifying an item as a current liability? What are some examples of current liabilities? Why is it important to classify a portion of long-term debt on a yearly basis as a current liability? What is the implication of misclassifying a liability as current or long-term?
The present obligation is not a contingent liability but shall be recognized as a provision when *a. Amount is reasonably estimable and event occurs infrequentlyb. Amount is reasonably estimable and occurrence of event is probablec. Event is unusual in nature and occurrence of event is probabled. Event is unusual in nature and event occurrs infrequently
15. There is substantial modification of a liability if the difference between the present value of the new liability discounted at the original effective interest rate and the carrying amount of the old liability is a. at least 10% b. more than 10% c. less than 10% d. none of these