Identify the statement that is not true regarding liabilities.

Question

Want to see more full solutions like this?

Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 8, Problem 1SSQ

To determine

Identify the statement that is not true regarding liabilities.

Expert Solution & Answer

Answer to Problem 1SSQ

c. Liabilities result from future transactions.

Explanation of Solution

Liabilities:

The claims creditors have over assets or resources of a company are referred to as liabilities. These are the debt obligations owed by company to creditors. Liabilities are classified on the balance sheet as current liabilities and long-term liabilities.

Justification:

a. Liabilities can be for services rather than cash, this statement is true. Since the liabilities are the claims that the creditor possesses over the assets or resources of a company.
b. Liabilities are reported in the balance sheet for almost every business. This statement is true.
c. Liabilities result from future transactions. This statement is not true because the liabilities are resulted from a past transactions or events.
d. Liabilities represent probable future sacrifices of benefits. This statement is true.

From the above explanation, it is clear that option “a, b and d” are incorrect, only option “c” is correct.

Conclusion

Hence, the correct option is option c.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Gama Co. sold merchandise to Harper Co. on account for $50,000, with terms of 3/10, net 60. The cost of the merchandise sold was $30,000. Gama Co. issued a credit memo for $4,000 of undiscounted merchandise returned, which originally cost $2,000. Harper Co. paid the invoice within the discount period. What is the amount of gross profit earned by Gama Co. on the above transactions?

Determine the missing amount

What is the amount of the sales that should be used when evaluating the addition of the lower-priced suits?

Answer 2

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 8, Problem 1SSQ

To determine

Identify the statement that is not true regarding liabilities.

Expert Solution & Answer

Answer to Problem 1SSQ

c. Liabilities result from future transactions.

Explanation of Solution

Liabilities:

The claims creditors have over assets or resources of a company are referred to as liabilities. These are the debt obligations owed by company to creditors. Liabilities are classified on the balance sheet as current liabilities and long-term liabilities.

Justification:

a. Liabilities can be for services rather than cash, this statement is true. Since the liabilities are the claims that the creditor possesses over the assets or resources of a company.
b. Liabilities are reported in the balance sheet for almost every business. This statement is true.
c. Liabilities result from future transactions. This statement is not true because the liabilities are resulted from a past transactions or events.
d. Liabilities represent probable future sacrifices of benefits. This statement is true.

From the above explanation, it is clear that option “a, b and d” are incorrect, only option “c” is correct.

Conclusion

Hence, the correct option is option c.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 8, Problem 1SSQ

To determine

Identify the statement that is not true regarding liabilities.

Expert Solution & Answer

Answer to Problem 1SSQ

c. Liabilities result from future transactions.

Explanation of Solution

Liabilities:

The claims creditors have over assets or resources of a company are referred to as liabilities. These are the debt obligations owed by company to creditors. Liabilities are classified on the balance sheet as current liabilities and long-term liabilities.

Justification:

a. Liabilities can be for services rather than cash, this statement is true. Since the liabilities are the claims that the creditor possesses over the assets or resources of a company.
b. Liabilities are reported in the balance sheet for almost every business. This statement is true.
c. Liabilities result from future transactions. This statement is not true because the liabilities are resulted from a past transactions or events.
d. Liabilities represent probable future sacrifices of benefits. This statement is true.

From the above explanation, it is clear that option “a, b and d” are incorrect, only option “c” is correct.

Conclusion

Hence, the correct option is option c.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 8, Problem 1SSQ

To determine

Identify the statement that is not true regarding liabilities.

Expert Solution & Answer

Answer to Problem 1SSQ

c. Liabilities result from future transactions.

Explanation of Solution

Liabilities:

The claims creditors have over assets or resources of a company are referred to as liabilities. These are the debt obligations owed by company to creditors. Liabilities are classified on the balance sheet as current liabilities and long-term liabilities.

Justification:

a. Liabilities can be for services rather than cash, this statement is true. Since the liabilities are the claims that the creditor possesses over the assets or resources of a company.
b. Liabilities are reported in the balance sheet for almost every business. This statement is true.
c. Liabilities result from future transactions. This statement is not true because the liabilities are resulted from a past transactions or events.
d. Liabilities represent probable future sacrifices of benefits. This statement is true.

From the above explanation, it is clear that option “a, b and d” are incorrect, only option “c” is correct.

Conclusion

Hence, the correct option is option c.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 8, Problem 1SSQ

To determine

Identify the statement that is not true regarding liabilities.

Expert Solution & Answer

Answer to Problem 1SSQ

c. Liabilities result from future transactions.

Explanation of Solution

Liabilities:

The claims creditors have over assets or resources of a company are referred to as liabilities. These are the debt obligations owed by company to creditors. Liabilities are classified on the balance sheet as current liabilities and long-term liabilities.

Justification:

a. Liabilities can be for services rather than cash, this statement is true. Since the liabilities are the claims that the creditor possesses over the assets or resources of a company.
b. Liabilities are reported in the balance sheet for almost every business. This statement is true.
c. Liabilities result from future transactions. This statement is not true because the liabilities are resulted from a past transactions or events.
d. Liabilities represent probable future sacrifices of benefits. This statement is true.

From the above explanation, it is clear that option “a, b and d” are incorrect, only option “c” is correct.

Conclusion

Hence, the correct option is option c.

Answer 6

Chapter 8, Problem 1SSQ

To determine

Identify the statement that is not true regarding liabilities.

Expert Solution & Answer

Answer to Problem 1SSQ

c. Liabilities result from future transactions.

Explanation of Solution

Liabilities:

The claims creditors have over assets or resources of a company are referred to as liabilities. These are the debt obligations owed by company to creditors. Liabilities are classified on the balance sheet as current liabilities and long-term liabilities.

Justification:

a. Liabilities can be for services rather than cash, this statement is true. Since the liabilities are the claims that the creditor possesses over the assets or resources of a company.
b. Liabilities are reported in the balance sheet for almost every business. This statement is true.
c. Liabilities result from future transactions. This statement is not true because the liabilities are resulted from a past transactions or events.
d. Liabilities represent probable future sacrifices of benefits. This statement is true.

From the above explanation, it is clear that option “a, b and d” are incorrect, only option “c” is correct.

Conclusion

Hence, the correct option is option c.

Answer 7

Chapter 8, Problem 1SSQ

To determine

Identify the statement that is not true regarding liabilities.

Answer 8

Expert Solution & Answer

Answer to Problem 1SSQ

c. Liabilities result from future transactions.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Liabilities:

The claims creditors have over assets or resources of a company are referred to as liabilities. These are the debt obligations owed by company to creditors. Liabilities are classified on the balance sheet as current liabilities and long-term liabilities.

Justification:

a. Liabilities can be for services rather than cash, this statement is true. Since the liabilities are the claims that the creditor possesses over the assets or resources of a company.
b. Liabilities are reported in the balance sheet for almost every business. This statement is true.
c. Liabilities result from future transactions. This statement is not true because the liabilities are resulted from a past transactions or events.
d. Liabilities represent probable future sacrifices of benefits. This statement is true.

From the above explanation, it is clear that option “a, b and d” are incorrect, only option “c” is correct.