The expected profit from a sales type warranty all be recognized in the period the warranty is sold. overs The cause for litigation must have occurred on or before the date of the financial statements to report a liability in the financial statements. A provision should be used only for the purpose for which it was originally recognized or set up.

The expected profit from a sales type warranty all be recognized in the period the warranty is sold. overs The cause for litigation must have occurred on or before the date of the financial statements to report a liability in the financial statements. A provision should be used only for the purpose for which it was originally recognized or set up.

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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Similar questions

What are the criteria for classifying an item as a current liability? What are some examples of current liabilities? Why is it important to classify a portion of long-term debt on a yearly basis as a current liability? What is the implication of misclassifying a liability as current or long-term?
The adjustment to be made for provision for doubtful debt is O a. Credit profit and loss account and deduct the provision from debtors O b. Debit profit and loss account and deduct the provision from debtors Oc. Credit profit and loss account and add the provision to debtors Od. Debit profit and loss account and add the provision to debtors
In a debt extinguishment in which the debt is continued with modified terms and the carrying amount of the debt is more than the fair value of the debt A new effective-interest rate must be computed A loss should be recognized by the debtor. No interest expense should be recognized in the future. A gain should be recognized by the debtor.
Which of the following is least likely to be classified as a current liability? Select one: Accounts payable Income tax payable Bonds payable Unearned revenue
Warranty liability is an estimate based on past warranty claims. How might a company determine how much to accrue for warranty? Why might it change the accrual?
A note payable is in the form of Select one: a. a contingency that is reasonably likely to occur. b. an oral agreement. a standing agreement. C. d. a written promissory note. e. The answer does not exist Pr
One of examples of contingent liability is an: *a. Obligations related to product warrantiesb. Possible receipt from a litigation settlementc. Pending court case with a probable favorable outcomed. Tax loss carryforwards
Advanced collections from customers prior to the performance obligation being satisfied is accounted as what account? As a deposit reported as an asset on the balance sheet A liability reported on the balance sheet Revenue reported on the income statement Deferred revenue reported as comprehensive income
Which of the following is not a liability? A. Notes payable. B. Current portion of long-term debt. C. Deferred revenue. D. An unused line of credit.
What accounts are used to record a contingent warranty liability that is probable and estimable buthas yet to be fulfilled?A. warranty liability and cashB. warranty expense and cashC. warranty liability and warranty expense, cashD. warranty expense and warranty liability
Which of the following statements is NOT true regarding gift card revenue recognition? O When a gift card is sold, the seller establishes a liability on its balance sheet. O Breakage can only be recognized as revenue to the extent that it is probable a reversal will not be necessary. O Breakage refers to the unused portion of gift cárd balances. O The amount received from the sale of gift cards is required to be recognized as revenue when the gift cards are sold.
In the case of a non-adjusting event, IAS 10 requires it to be: Select one alternative: disclosed as a contingent liability, if it is an unfavourable material event reflected in the financial statements if it is material and relates to an item that would normally be included in the financial statements disclosed by way of note if it is material reflected in the financial statements, if it is an unfavourable material event; disclosed by way of a note, if it is a favourable event