Which one of the following statements does not describe liabilities correctly? Select one: O a. Most common long-term liabilities are loans and mortgage loan. O b. Current liabilities are long-term obligation that are payable after more than one year. O c. Examples of current liabilities are bank overdrafts, short-term loans and accrued expenses. O d. Liabilities are economic obligations of a business

Which one of the following statements does not describe liabilities correctly? Select one: O a. Most common long-term liabilities are loans and mortgage loan. O b. Current liabilities are long-term obligation that are payable after more than one year. O c. Examples of current liabilities are bank overdrafts, short-term loans and accrued expenses. O d. Liabilities are economic obligations of a business

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 13MC: Which of the following is not a characteristic of a short-term note payable? A. Payment is due in...

See similar textbooks

Similar questions

In a classified balance sheet, liabilities are separated into two categories based on a. The amount of the obligation to be satisfied—large versus small. b. To whom the obligation is owed—those inside versus those outside of the company. c. The nature of the obligation—determinable amount versus estimated amount. d. The length of time until the obligation is expected to be satisfied—less than one year versus more than one year.
For the accounting period in which a short-term loan is paid off, which of the following correctly describes the effects on the financial statements? a) Neither current assets nor current liabilities will be affected. b) Both current assets and current liabilities will be affected. c) Whilst current liabilities will fall, current assets will remain unchanged. d) Whilst current assets will fall, current liabilities will remain unchanged.
Listed below are several terms and phrases associated with current liabilities. Pair each item from List A (by letter) with the item from List B that is most appropriately associated with it. List A List B 1. An IOU promising to repay the amount borrowed plus interest. 2. Payment amount is reasonably possible and is reasonably estimable. 3. Mixture of liabilities and equity a business uses. 4. Payment amount is probable and is reasonably estimable. 5. A liability that requires the sacrifice of something other than cash. 6. Long-term debt maturing within one year. 7. FICA and FUTA. 8. Informal agreement that permits a company to borrow up to a prearranged limit. 9. Classifying liabilities as either current or longterm helps investors and creditors assess this. 10. Amount of note payable × annual interest rate × fraction of the year. a. Recording of a contingent liability. b. Deferred revenue. c. The riskiness of a business’s obligations. d. Disclosure of a contingent liability.…
Current liabilities a. May include contingent liabilities.b. Include obligations payable within one year or one operating cycle, whichever is shorter.c. Can be satisfied only with the payment of cash.d. Are preferred by most companies over long-term liabilities.
Listed below are several terms and phrases associated with current liabilities. Pair each item from List A (by letter) with the item from List B that is most appropriately associated with it. List A List B 1. Interest expense is recorded in the period interest is incurred rather than in the period interest is paid. 2. Payment is reasonably possible and is reasonably estimable. 3. Cash, current investments, and accounts receivable all divided by current liabilities. 4. Payment is probable and is reasonably estimable. 5. Gift cards. 6. Long-term debt maturing within one year. 7. Social Security and Medicare. 8. Unsecured notes sold in minimum denominations of $25,000 with maturities up to 270 days. 9. Classifying liabilities as either current or long-term helps investors and creditors assess this. 10. Incurred on notes payable. a. The riskiness of a business’s obligations. b. Current portion of long-term debt. c. Recording a contingent liability. d. Disclosure of a contingent…
Debts listed as current liabilities are those that a.are due to be paid in more than one year b.will be paid in less than one year c.are due to be paid in 5 to 10 years d.are owed to the owner and will never be paid
Non-current liabilities are obligations or debts that are expected to be paid after one year. False True
Statement 1: Short-term debt instruments, both personal and corporate, come in the form of obligations expected to be repaid within one calendar year. Credit card bills, payday loans and other consumer loans that have repayment of more than 12 months are some of the examples of short-term debt instruments.Statement 2: Long-term debt instruments in personal finance are usually mortgage payments or car loans. Debt security refers to a debt instrument, such as government bond, corporate bond, certificate of deposit True or False for the two statements
For the purpose of classifying liabilities as current or noncurrent, the term operatingcycle refers toa. the time period between the date the sale is made and the date the related revenue iscollected.b. the time period between the purchase of merchandise and the conversion of this merchandise back to cash.c. a period of one year.d. the average time period between business recessions
Construct a differential equation for the changing mortgage balance. (Equation Must include r, A, P, and dA/dt)Relevant information: monthly mortgage payment (M) is composed of taxes and insurance (TI), and principle and interest (P). So, M=TI + P (TI goes into escrow account). Mortgage rate, r, is APR divided monthly (0.05/12). t is time in months, A(t) is the mortgage balance after t months of payments. the rate of change of A(t) is the difference between interest incurred and P (the portion of the monthly payment that does not go into Escrow account).
Salaries Payable, Accounts Payable, and Unearned Revenue are examples of ________. A. short−term investments B. fixed assets C. long−term liabilities D. current liabilities
Which of the following liabilities is created when a company receives cash for services to be provided in the future? A. Unearned Revenue B. Estimated Warranty Payable C. Accrued Liability D. Accounts Payable