3. a. List and describe three types of deferred credits? b. Do they meet the definition of a liability? Of short or long term? c. Why do some accountants not consider them to be a liability? d. Do deferred credits affect liquidity? 4. List and discuss four reasons a company would prefer to issue debt rather than equity securities. 5. When and why should liabilities for each of the following items be recorded on the books of an ordinary business corporation? a. Purchase of goods on account. b. Officers' salaries c. Dividends d. Interest e. Loss contingencies
3. a. List and describe three types of deferred credits? b. Do they meet the definition of a liability? Of short or long term? c. Why do some accountants not consider them to be a liability? d. Do deferred credits affect liquidity? 4. List and discuss four reasons a company would prefer to issue debt rather than equity securities. 5. When and why should liabilities for each of the following items be recorded on the books of an ordinary business corporation? a. Purchase of goods on account. b. Officers' salaries c. Dividends d. Interest e. Loss contingencies
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![3. a. List and describe three types of deferred credits? b. Do they meet the definition of a liability? Of short or long
term? c. Why do some accountants not consider them to be a liability? d. Do deferred credits affect liquidity? 4. List
and discuss four reasons a company would prefer to issue debt rather than equity securities. 5. When and why should
liabilities for each of the following items be recorded on the books of an ordinary business corporation? a. Purchase of
goods on account. b. Officers' salaries c. Dividends d. Interest e. Loss contingencies](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa5a46883-8428-4067-858f-53bbab2d28fe%2Fbf909302-1df3-4da6-9101-1e91464045a9%2F5r7u75f_processed.jpeg&w=3840&q=75)
Transcribed Image Text:3. a. List and describe three types of deferred credits? b. Do they meet the definition of a liability? Of short or long
term? c. Why do some accountants not consider them to be a liability? d. Do deferred credits affect liquidity? 4. List
and discuss four reasons a company would prefer to issue debt rather than equity securities. 5. When and why should
liabilities for each of the following items be recorded on the books of an ordinary business corporation? a. Purchase of
goods on account. b. Officers' salaries c. Dividends d. Interest e. Loss contingencies
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