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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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