Which one of the following statements does not describe liabilities correctly? Select one: O a. Most common long-term liabilities are loans and mortgage loan. O b. Current liabilities are long-term obligation that are payable after more than one year. O c. Examples of current liabilities are bank overdrafts, short-term loans and accrued expenses. O d. Liabilities are economic obligations of a business

Which one of the following statements does not describe liabilities correctly? Select one: O a. Most common long-term liabilities are loans and mortgage loan. O b. Current liabilities are long-term obligation that are payable after more than one year. O c. Examples of current liabilities are bank overdrafts, short-term loans and accrued expenses. O d. Liabilities are economic obligations of a business

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter2: Introduction To Financial Statements

Section: Chapter Questions

Problem 9MC: Which of the following decreases owners equity? A. investments by owners B. losses C. gains D....

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Which of the following provides information about how many months of living expenses you can cover with your present level of liquid assets? OA Liquidity Ratio O B. Current Ratio OC. Savings Ratio OD. Debt-to Asset Ratio
In a classified balance sheet, liabilities are separated into two categories based on a. The amount of the obligation to be satisfied—large versus small. b. To whom the obligation is owed—those inside versus those outside of the company. c. The nature of the obligation—determinable amount versus estimated amount. d. The length of time until the obligation is expected to be satisfied—less than one year versus more than one year.
which of the followings is considered as long term liability :Select one .a mortgage payable .b current portion of long term liability .C bank overdraft .d unearned revenues
The kind of debts which are needed to be repaid in a short term is known as? A. Fixed Liabilities B. Current Liabilities C. Depreciating Assets D. Intangible Assets
Most companies pay current liabilities Select one: a. out of current assets. b. by issuing interest-bearing notes payable. C. by issuing stock. d. by creating long-term liabilities.
Current liabilities a. May include contingent liabilities.b. Include obligations payable within one year or one operating cycle, whichever is shorter.c. Can be satisfied only with the payment of cash.d. Are preferred by most companies over long-term liabilities.
For the accounting period in which a short-term loan is paid off, which of the following correctly describes the effects on the financial statements? a) Neither current assets nor current liabilities will be affected. b) Both current assets and current liabilities will be affected. c) Whilst current liabilities will fall, current assets will remain unchanged. d) Whilst current assets will fall, current liabilities will remain unchanged.
What is a liability? a. all debts and obligation owed by the business b. fixed cost fall under the overhead c. any debt that extends for more than 1 year d. current assets minus inventory divided by current liabilities
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. 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 longterm helps investors and creditors assess this. 10. Amount of note payable × annual interest rate × fraction of the year. a. Recording of a contingent liability. b. Deferred revenue. c. The riskiness of a business’s obligations. d. Disclosure of a contingent liability.…
Which of the following will be classified as a current liability? O a. Two-year noțes payable O b. Unearned rent Oc. Bonds payable Od. Mortgage loan
Accounting for liabilities involves recording and managing obligations a company owes to external parties. Liabilities are classified based on their nature and timing of settlement. Common types include: Current Liabilities: Debts or obligations expected to be settled within one year or the operating cycle, whichever is longer. Examples include accounts payable, accrued expenses, and short-term loans. Long-Term Liabilities: Obligations not due within the next operating cycle or one year. Examples include long-term loans, bonds payable, and lease obligations. Contingent Liabilities: Potential obligations that depend on a future event, such as lawsuits or warranties. They are disclosed in the footnotes of financial statements unless the likelihood of payment is remote. Deferred Revenue: Payments received in advance for goods or services to be provided in the future. They are recorded as liabilities until the revenue recognition criteria are met. Accrued Liabilities: Expenses…
Which one of these does not affect the cash flow to creditors? Multiple Choice O O Interest paid on long-term debt New mortgage on a building Increase in accounts payable Mortgage interest payment