Horngren's Financial & Managerial Accounting, The Managerial Chapters (5th Edition)
5th Edition
ISBN: 9780133851298
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 11, Problem 1QC
To determine
Liabilities: Liabilities are debt and obligations of a business. These are the claims against the resources that a business owes to outsiders of the company. Liabilities may be Current liabilities, and Long-term liabilities. Examples: Creditors, Bills payable, Bank overdraft, Salaries and wages payable, and Notes payable.
To identify: The correct reporting place of estimated amounts of known liabilities.
Expert Solution & Answer
Answer to Problem 1QC
(b) reported on the balance sheet .
Explanation of Solution
Explanation for correct answer: The estimated amounts of a transaction which is occurred in the past is called as known liabilities. Since they are liabilities, they must be reported on the balance sheet.
Explanation for incorrect answers:
- Option (a) is incorrect because known liabilities cannot be ignored, they should not be avoided.
- Option (c) is incorrect because on the income statement, only expenses and revenues should be reported, but not the liabilities.
- Option (d) is incorrect because notes to financial statements consist of additional data related to accounting methodologies of the income statement, balance sheet.
Conclusion
Hence, the correct answer option is (b).
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
Known liabilities of estimated amounts are
a. ignored. (Record them when paid.)
b. reported on the balance sheet.
c. reported on the income statement.
d. reported only in the notes to the financial statements.
Known liabilities of estimated amounts are
ignored. (Record them when paid.)
reported on the balance sheet.
reported on the income statement.
reported only in the notes to the financial statements.
True or false
if a balance sheet is prepared between the date of declaration and date of payment, devidends payable accounts are reported as current liabilities.
Chapter 11 Solutions
Horngren's Financial & Managerial Accounting, The Managerial Chapters (5th Edition)
Ch. 11 - Prob. 1QCCh. 11 - On January 1, 2016, a business borrowed 18,000 on...Ch. 11 - A company sells 180,000 (selling price) of goods...Ch. 11 - Prob. 4QCCh. 11 - Prob. 5QCCh. 11 - Prob. 6QCCh. 11 - Prob. 7QCCh. 11 - Vega Company expects to pay a 4% bonus on net...Ch. 11 - Prob. 9QCCh. 11 - Prob. 10QC
Ch. 11 - Prob. 1RQCh. 11 - What is a current liability? Provide some examples...Ch. 11 - How is sales tax recorded? Is it considered an...Ch. 11 - How do unearned revenues arise?Ch. 11 - What do short-term notes payable represent?Ch. 11 - Coltrane Company has a 5,000 note payable that is...Ch. 11 - Prob. 7RQCh. 11 - Prob. 8RQCh. 11 - Prob. 9RQCh. 11 - Prob. 10RQCh. 11 - What are the two main controls for payroll?...Ch. 11 - When do businesses record warranty expense, and...Ch. 11 - Prob. 13RQCh. 11 - Prob. 14RQCh. 11 - Prob. 15RQCh. 11 - Determining current versus long-term liabilities...Ch. 11 - Prob. 11.2SECh. 11 - Prob. 11.3SECh. 11 - Accounting for a note payable On December 31,...Ch. 11 - Prob. 11.5SECh. 11 - Prob. 11.6SECh. 11 - Computing payroll amounts considering FICA tax...Ch. 11 - Prob. 11.8SECh. 11 - Prob. 11.9SECh. 11 - Prob. 11.10SECh. 11 - Prob. 11.11SECh. 11 - Accounting treatment for contingencies Fernandez...Ch. 11 - Prob. 11.13SECh. 11 - Recording sales tax Consider the following...Ch. 11 - Prob. 11.15ECh. 11 - Recording and reporting current liabilities...Ch. 11 - Journalizing current liabilities Erik OHern...Ch. 11 - Prob. 11.18ECh. 11 - Recording employer payroll taxes and employee...Ch. 11 - Prob. 11.20ECh. 11 - Prob. 11.21ECh. 11 - Prob. 11.22ECh. 11 - Prob. 11.23ECh. 11 - Prob. 11.24ECh. 11 - Prob. 11.25APCh. 11 - Prob. 11.26APCh. 11 - Journalizing liability transactions T he following...Ch. 11 - Journalizing liability transactions The following...Ch. 11 - Prob. 11.29APCh. 11 - Prob. 11.30BPCh. 11 - Prob. 11.31BPCh. 11 - Prob. 11.32BPCh. 11 - Prob. 11.33BPCh. 11 - Prob. 11.34BPCh. 11 - Prob. 11.35CPCh. 11 - Prob. 11.1CTDCCh. 11 - Sell-Soft is the defendant in numerous lawsuits...Ch. 11 - Prob. 11.1CTEICh. 11 - Derails about a company's liabilities appear in a...Ch. 11 - Prob. 11.1CTCA
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
What is the impact on the accounting equation when a payment of account payable is made? A. both sides increase B. both sides decrease C. only the Asset side changes D. neither side changes
arrow_forward
Consider the following accounts, and determine if the account is an asset (A), a liability (L), or equity (E). A. Accounts Payable B. Cash C. Dividends D. Notes Payable
arrow_forward
Which set of accounts has the same type of normal balance? A. Cash, accounts payable B. Prepaid rent, unearned service revenue C. Dividends, common stock D. Accounts payable, retained earnings
arrow_forward
Which of the following would be included in the financing section? A. loss on sale of investments B. depreciation expense C. increase in notes receivable D. decrease in notes payable
arrow_forward
Which of the following items will not be shown in the balance sheet of ahotel?
A. customer loyalty value
B. accounts payable
C. Intangible assets
D. accrued taxes
arrow_forward
Which of the following is NOT TRUE about the basic and additional financial statements?
a) Basic financial statements are prepared according to the accrual basis of accountingb) Basic financial statements are comprised of balance sheet , income statement , statement of changes in equity and the statement of cash flowsc) Assets and the financial sources of assets as of a certain date are presented on the balance sheetd) Financial sources of assets are comprised of current and long term liabilities and equity
arrow_forward
Consider the following transactions associated with accounts receivable and the allowance for uncollectible accounts.Required:For each transaction, indicate whether it would increase (I), decrease (D), or have no effect (NE) on the account totals. (Hint: Make sure the accounting equation, Assets = Liabilities + Stockholders’ Equity, remains in balance after each transaction.)
arrow_forward
Which of the following balance sheet accounts is noncurrent?
A) Accounts Payable
B) Prepaid Expenses
C) Inventories
D) Equ
arrow_forward
a. Determine the amount of the adjusting entry for uncollectible accounts.
b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense.
c. Determine the net realizable value of accounts receivable.
arrow_forward
T/F: Prepaid expenses are recorded as liabilities on the balance sheet.
arrow_forward
Accounts that normally have a credit balance are…
lag
stion
© A. Expenses, capital & liabilities
B.
Revenues assets & drawings
C. Revenue, liabilities & capital
D. Expenses, assets & drawings
arrow_forward
Which item would not appear on a Balance Sheet?
a. Gross Profit
b. Accounts Receivable
c. Interest Payable
d. Retained Earnings
e. Prepaid expenses
arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning
The ACCOUNTING EQUATION For BEGINNERS; Author: Accounting Stuff;https://www.youtube.com/watch?v=56xscQ4viWE;License: Standard Youtube License