Problem 8-1A (Static) Review current liability terms and concepts (LO8-1) Select the most appropriate item from the dropdown to match each of the following terms and phrases associated with current liabilities. 1. An IOU promising to repay the amount borrowed plus interest. 2. Payment amount is reasonably possible and is reasonably estimable. 3. Mixture of liabilities and equity a business uses. 4. Payment amount is probable and is reasonably estimable. 5. A liability that requires the sacrifice of something other than cash. 6. Long-term debt maturing within one year. 7. FICA and FUTA. 8. Informal agreement that permits a company to borrow up to a prearranged limit. 9. Classifying liabilities as either current or long-term helps investors and creditors assess this. 10. Amount of note payable x annual interest rate x fraction of the year. Capital structure Current portion of long-term debt Deferred revenue Disclosure of a contingent liability Interest on debt Line of credit Note payable Payroll taxes Recording of a contingent liability The riskiness of a business's obligations

Problem 8-1A (Static) Review current liability terms and concepts (LO8-1) Select the most appropriate item from the dropdown to match each of the following terms and phrases associated with current liabilities. 1. An IOU promising to repay the amount borrowed plus interest. 2. Payment amount is reasonably possible and is reasonably estimable. 3. Mixture of liabilities and equity a business uses. 4. Payment amount is probable and is reasonably estimable. 5. A liability that requires the sacrifice of something other than cash. 6. Long-term debt maturing within one year. 7. FICA and FUTA. 8. Informal agreement that permits a company to borrow up to a prearranged limit. 9. Classifying liabilities as either current or long-term helps investors and creditors assess this. 10. Amount of note payable x annual interest rate x fraction of the year. Capital structure Current portion of long-term debt Deferred revenue Disclosure of a contingent liability Interest on debt Line of credit Note payable Payroll taxes Recording of a contingent liability The riskiness of a business's obligations

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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Concept explainers

Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.

Question

Problem 8-1A (Static) Review current liability terms and concepts (LO8-1)
Select the most appropriate item from the dropdown to match each of the following terms and phrases associated with current
liabilities.
1. An IOU promising to repay the amount borrowed plus interest.
2. Payment amount is reasonably possible and is reasonably estimable.
3. Mixture of liabilities and equity a business uses.
4. Payment amount is probable and is reasonably estimable.
5. A liability that requires the sacrifice of something other than cash.
6. Long-term debt maturing within one year.
7. FICA and FUTA.
8. Informal agreement that permits a company to borrow up to a prearranged limit.
9. Classifying liabilities as either current or long-term helps investors and creditors assess this.
10. Amount of note payable x annual interest rate x fraction of the year.
Capital structure
Current portion of long-term debt
Deferred revenue
Disclosure of a contingent liability
Interest on debt
Line of credit
Note payable
Payroll taxes
Recording of a contingent liability
The riskiness of a business's obligations

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