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 liability. e. Interest expense. f. FICA. g. Commercial paper. h. Acid-test ratio. i. Accrual accounting. j. Deferred revenue.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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
liability.

e. Interest expense.

f. FICA.

g. Commercial paper.

h. Acid-test ratio.

i. Accrual accounting.

j. Deferred revenue.


 


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