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Business Accounting Pearson eText for Governmental and Nonprofit Accounting -- Instant Access (Pearson+)

A present obligation of a firm that will be repaid in the future is referred to as a liability. These are responsibilities or debts that a business has to another individual or business. Liabilities are classified as Current liabilities, Long term liabilities, contingent liabilities To state: The correct option regarding which is not a common type of government long-term liability d. Notes Bonds −A corporate or governmental body for fulfillment of financial requirements issues the bonds to investors as a fixed obligation to pay. To raise funds for operational or infrastructural initiatives, bonds are issued. Bonds are classified as government long-term liability as they are due for more than a year in the future. Hence bonds are considered one of the common types of government long-term liability. This option is Incorrect. Contracts payables − Contract Payment refers to each regular installment for rent, principal, interest, etc. that is due from an Obligor under a Contract. Contracts payable are classified as government long-term liabilities they are due for more than a year in the future. Hence Contracts payable are considered one of the common types of government long-term liability. This option is Incorrect. Capital lease − A capital lease is a contract that allows the lessor to temporarily use an asset. In a capital lease, the leased asset is represented on the balance sheet as though the lessee truly owned it. Capital leases are classified as government long-term liability as they are due for more than a year in the future. Hence capital leases are considered one of the common types of government long-term liability. This option is Incorrect. Notes −Notes refer to the sums owed to suppliers or vendors for goods or services received but not yet paid for. Notes are classified as government short-term liability as they are due for less than a year. Hence notes are not considered the common type of government long-term liability. This option is Correct.

A present obligation of a firm that will be repaid in the future is referred to as a liability. These are responsibilities or debts that a business has to another individual or business. Liabilities are classified as Current liabilities, Long term liabilities, contingent liabilities To state: The correct option regarding which is not a common type of government long-term liability d. Notes Bonds −A corporate or governmental body for fulfillment of financial requirements issues the bonds to investors as a fixed obligation to pay. To raise funds for operational or infrastructural initiatives, bonds are issued. Bonds are classified as government long-term liability as they are due for more than a year in the future. Hence bonds are considered one of the common types of government long-term liability. This option is Incorrect. Contracts payables − Contract Payment refers to each regular installment for rent, principal, interest, etc. that is due from an Obligor under a Contract. Contracts payable are classified as government long-term liabilities they are due for more than a year in the future. Hence Contracts payable are considered one of the common types of government long-term liability. This option is Incorrect. Capital lease − A capital lease is a contract that allows the lessor to temporarily use an asset. In a capital lease, the leased asset is represented on the balance sheet as though the lessee truly owned it. Capital leases are classified as government long-term liability as they are due for more than a year in the future. Hence capital leases are considered one of the common types of government long-term liability. This option is Incorrect. Notes −Notes refer to the sums owed to suppliers or vendors for goods or services received but not yet paid for. Notes are classified as government short-term liability as they are due for less than a year. Hence notes are not considered the common type of government long-term liability. This option is Correct.

Pearson eText for Governmental and Nonprofit Accounting -- Instant Access (Pearson+)

Pearson eText for Governmental and Nonprofit Accounting -- Instant Access (Pearson+)

11th Edition

ISBN: 9780137561667

Author: Robert Freeman, Craig Shoulders

Publisher: PEARSON+

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Chapter 8, Problem 16Q

Chapter 8, Problem 1.2E

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Chapter 8 Solutions

Pearson eText for Governmental and Nonprofit Accounting -- Instant Access (Pearson+)

Ch. 8 - Prob. 1Q Ch. 8 - Prob. 1.1E

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