Which of these is not a current liability? A. Serial maturity of long-term obligations B. Payables in providing services to be offered for sale C. Accruals for salaries and wages D. Contractual obligations falling due at an early date which are expected to be refunded E. none of the choices
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1. Which of these is not a current liability?
A. Serial maturity of long-term obligations
B. Payables in providing services to be offered for sale
C. Accruals for salaries and wages
D. Contractual obligations falling due at an early date which are expected to be refunded
E. none of the choices
2. An estimated liability is an obligation which is uncertain as to:*
A. NO - amount; YES - existence
B. YES - amount; YES - existence
C. NO - amount; NO - existence
D. YES - amount; NO – existence
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Solved in 2 steps
- 1. Which of the following is an essential characteristic for an obligation to qualify as a liability? a. The obligation should have a definite amount at the report date. b. The party to whom payment will be made should be especially identifiable at report date c. The obligation should be settled in cash. d. The obligation should arise from past transactions of the enterprise e. All of the choices 2. Which of these is not a current liability? a. Serial maturity of long-term obligations b. Payables in providing services to be offered for sale c. Accruals for salaries and wages d. Contractual obligations falling due at an early date which is expected to be refunded e. none of the choices 3. An estimated liability is an obligation that is uncertain as to: a. NO - amount; NO - existence b. YES - amount; NO - existence c. NO - amount; YES - existence d. YES - amount; YES - existenceTRUE OR FALSE?1. Short-term obligation refinanced on a long-term basis at the end of the reporting period is a current liability.2. An entity must make the current and noncurrent presentation of assets and liabilities, except when a presentation based on liquidity provides information that is reliable and more relevant.3. A liability is classified as noncurrent when at the end of the reporting period the entity has the right to defer settlement of the liability for at least twelve months after the reporting period.An estimated liability is an obligation which is uncertain as to: * A. NO - amount; YES - existence B. YES - amount; YES - existence C. NO - amount; NO - existence D. YES - amount; NO – existence
- When the amount of a contingent liability cannot be reasonably estimated but its likelihood is probable, the company should: Multiple Choice include a description in the notes to the financial statements. record the amount of the liability times the probability of its occurrence. exclude the information about the contingent liability from its financial statements and footnotes. record the amount of the liability as a long-term liability on the balance sheet.Which of the following statement/s are incorrect?I. An enterprise should not recognize a contingent liabilityII. The amount recognized as a provision should be the best estimate of the expenditure required to settle the present obligation at the end of the reporting period.III. A provision is a liability of certain timing and amount.IV. Accruals are liabilities to pay for goods or services that have been received or supplied but have not been paid. I and IV only III only I, II and IV II and IV onlyWhich of the following is a characteristic of a current liability? A. It is an avoidable obligation. B. It occurs because of a future transaction or event. C. It cannot be settled with services. D. It creates a present obligation for future payment of cash or services.
- 1. Which of the following is not an essential characteristic of a liability?a. Legal enforceabilityb. Present obligation to third partiesc. Involves future sacrifice of economic benefitsd. Past activity 2. An example of an item which is not a liability isa. The portion of a long termdebt due within one yearb. Estimated warranty costsc. Dividends payable common shares of the issuing corporationd. Customers’ deposits 3. Which of the following statements relating to the recognition of liabilities is falseI. Liabilities are recognized when obligations to transfer assets or provide services in the future are incurred in exchangesII. Liabilities arising from non-reciprocal transfers are recognized when the corresponding money, goods, or services are received.III. Mutually unexecuted contracts are generally not recognized as accounting liabilitiesa. I only c. I and II onlyb. II only d. I, II, and III 4. The following statements relate to liabilities. Which statement is true?I. Liabilities may…Which of the following statements is false?Select one:a. A contingent liability should be disclosed in the notes to the financial statements if there is a reasonable possibility that a loss (or expense) will occur.b. A contingent liability should be accrued if the loss is probable and the amount of the loss can be reasonably estimated.c. A contingent liability is a potential obligation that depends on the future outcome of past events.d. All contingent liabilities should be reported as liabilities on the financial statements, even those that are unlikely to occur.Which of the following statements is false?a. A contingent liability should be disclosed in the notes to the financial statements if thereis a reasonable possibility that a loss (or expense) will occur.b. All contingent liabilities should be reported as liabilities on the financial statements,even those that are unlikely to occur.c. A contingent liability is a potential obligation that depends on the future outcome of pastevents.d. A contingent liability should be accrued if the loss is probable and the amount of theloss can be reasonably estimated.
- TRUE OR FALSE? Short-term obligation refinanced on a long-term basis at the end of the reporting period is a current liability.34. The following statements are correct, except a. A liability will be reported at less than its maturity amount prior to the maturity date if the stated rate of interest on the liability is higher than the market rate of interest. b. A liability is created because of the acquisition of an asset, payment of another liability, incurrence of an expense, declaration of cash or property dividend, a loss, or a revenue collected in advance. In all cases, each of these “causes” usually provides the basis for measuring the liability. c. Accounts payable with customary term of 18 months is classified as current liability. d. Most liabilities have stated and effective interest rates that are the same; in such a situation the principal, face, and maturity amounts are all the same.Short-term obligations can be reported as noncurrent liabilities if the company (a) intends to refinance ona long-term basis and (b) demonstrates the ability to do so by actual financing or a formal agreement to doso.
