True or False with explanation   The formula for simple interest is: Interest = Principle x Days outstanding x Time   Financial liabilities deliver cash. A current liability is one that is due to be settled within 12 months after the reporting period.

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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True or False with explanation

 

The formula for simple interest is:

Interest = Principle x Days outstanding x Time

 

Financial liabilities deliver cash.

A current liability is one that is due to be settled within 12 months after the reporting period.

Interest on a $10,000, 4% note that is outstanding for 3 months would be $100.

A warranty obligation is a type of non-financial liability.

With the revenue approach to warranties, unearned revenue is used.

A company that uses the expense approach to warranties should never make an accrual of estimated warranty work.

When a short-term note is repaid, a debit includes Notes Payable.

A liability is considered to be an asset.

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