Use the following to answer questions 1– 5Reporting MethodA. Current LiabilityB. Long term liabilityC. Disclosure note onlyD. Not reportedSelect the correct reporting method for each of the itemslisted below:1.Accounts payableBond payable.3.Sales tax collected from customers.4.Unused line of credit.A contingent liability with a reasonablypossible likelihood of occurring within the next5.year and cannot be estimated.2.

Balance sheet: Balance sheet is an accounting report that furnishes an overall financial status of a…

Use the following to answer questions 1 – 5 Reporting Method A. Current Liability B. Long term liability C. Disclosure note only D. Not reported Select the correct reporting method for each of the items listed below: 1. Accounts payable 2. Bond payable. 3. Sales tax collected from customers. 4. Unused line of credit. A contingent liability with a reasonably possible likelihood of occurring within the next 5. Year and cannot he estimated

Use the following to answer questions 1 – 5 Reporting Method A. Current Liability B. Long term liability C. Disclosure note only D. Not reported Select the correct reporting method for each of the items listed below: 1. Accounts payable 2. Bond payable. 3. Sales tax collected from customers. 4. Unused line of credit. A contingent liability with a reasonably possible likelihood of occurring within the next 5. Year and cannot he estimated

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Which of the following statements regarding liabilities is false? Multiple Choice A liability is a probable future payment of assets or services that a company is presently obligated to make as a result of past transactions or events. Potential future wages to be paid to employees should be recorded as liabilities. Long-term liabilities are obligations due after one year, or the company’s operating cycle if longer. Liabilities are classified as either current or long term. Liabilities can involve uncertainty in whom to pay.
8. Discount on Note Payable should be classified as a a. current asset b. contra account to Notes Payable c. part of stockholder's equity d. deferred debt
Unamortized debt premium should be reported on the balance sheet of the insurer as a Group of answer choices direct addition to the face amount of the debt deduction from the issue costs deferred credit direct addition to the present value of the debt
Which of the following is most likely to be classified and reported as a current liability? a. Prepaid Expense b. Bond Payable c. Mortgage Payable d. Unearned Revenue O None of the above
Communication (income statement): The balance of Interest Expense from accruing interest to be paid has what effect on the income statement in the current year? Multiple Choice A. Decreases net income. B. No effect. C. Increases net income.
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?
5. Which of the following is a characteristic of a current liability? OA current liability must be of a known amount. OA current liability is due within one year or one operating cycle, whichever is longer. A current liability must be of an estimated amount. Current liabilities are subtracted from long-term liabilities on the balance sheet.
1. Distinguish between a current liability and a long-term debt. 2. Why is the liabilities section of the balance sheet of primary significance to bankers? 3. What is the nature of a discount on notes payable? 4. Under what conditions must an employer accrue a liability for the cost of compensated absences? 5. Under what conditions should short-term obligation be excluded from current liabilities? 5.
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
Alternative Accounting Treatments a. Estimate the amount of liability and record. b. Do not record as a liability but disclose in a footnote to the financial statements. c. Neither record as a liability nor disclose in a footnote to the financial statements. Required: Match the appropriate alternative accounting treatment with each of the potential contingent liabilities listed below. Potential Contingent Liabilities 1. Income taxes related to revenue included in net income this year but taxable in a future year. 2. Potential costs in future periods associated with performing warranty services on products sold this period. 3. Estimated cost of future services under a product warranty related to past sales. 4. Estimated cost of future services under a product warranty related to future sales. 5. Estimated cost of pension benefits related to past employee services that has yet to be funded. 6. Potential loss on environmental cleanup suit against company; a court judgment against the…
Recording bad debt expense under the allowance method will have what effect on the financial statements? Select one: a. Profit is unchanged and total assets decrease b. Profit decreases and total assets is unchanged c. Profit is unchanged and total assets is unchanged d. Profit increases and total assets decrease e. Profit decreases and total assets decrease
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.