BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

Solutions

Chapter
Section
BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
51 views

When reporting liabilities on a balance sheet, in theory, what measurement should be used?

a. Present value of the present outflow

b. Present value of the future outflow

c. Future value of the present outflow

d. Future value of the future outflow

Use the following information for Multiple-Choice Questions 8-3 and 8-4:

Kinsella Seed borrowed $200,000 on October 1, 2019, at 10% interest. The interest and principal are due on October 1, 2020.

To determine

Concept introduction:

Liabilities:

Liabilities are the obligation of the business or amount payable by the business. Liabilities can current or long term. Current liabilities are liabilities payable within the short term or business cycle of the company, for example Accounts payable for purchases and utilities payable. Long term liabilities are liabilities payable in a long period/ years, for example long term loan.

To choose:

The correct option to record the liabilities on the balance sheet.

Explanation

Explanation for correct answer:

b. the amount of liabilities on the balance sheet should be recorded in terms of Present value of future outflow. Hence the correct option is b.

Explanation for incorrect answers:

a. The amount of liabilities on the balance sheet should be recorded in terms of Present value of future outflow...

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

Is competition good for business? Is it good for consumers?

Foundations of Business (MindTap Course List)

How can virtualization save an organization money?

Principles of Information Systems (MindTap Course List)

Describe the Big Data phenomenon.

Database Systems: Design, Implementation, & Management

In a brief report, discuss the advantages and disadvantages of using styrofoam, paper, glass, stainless steel, ...

Engineering Fundamentals: An Introduction to Engineering (MindTap Course List)

What view of a drawing usually shows the most detail?

Precision Machining Technology (MindTap Course List)

Replace the three forces by a single equivalent force R. Express your answer in vector form.

International Edition---engineering Mechanics: Statics, 4th Edition

Why would a programmer or computer repair technician build a back door? (217)

Enhanced Discovering Computers 2017 (Shelly Cashman Series) (MindTap Course List)