Test Bank Chapter 13

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CHAPTER 13

CURRENT LIABILITIES AND CONTINGENCIES

IFRS questions are available at the end of this chapter.

TRUE-FALSE—Conceptual

Answer No. Description

F 1. Zero-interest-bearing note payable. F 2. Dividends in arrears. T 3. Examples of unearned revenues. T 4. Reporting discount on Notes Payable. F 5. Currently maturing long-term debt. F 6. Excluding short-term debt refinanced. T 7. Accounting for sales tax collected. F 8. Accounting for sick pay. T 9. Social security taxes as liabilities. F 10. Definition of accumulation rights. T 11. Recognizing compensated absences expense. F 12. Accruing estimated loss contingency. T 13. Disclosing gain contingencies. F 14. Sales-type warranty profit. T 15. Fair value of asset retirement obligation. T 16. Reporting a litigation liability. F 17. Expense warranty approach. F 18. Acid-test ratio components. F 19. Affect on current ratio. T 20. Reporting current liabilities.

Multiple Choice—Conceptual

Answer No. Description

d 21. Definition of a liability. d 22. Nature of current liabilities. a 23. Recording of accounts payable. a 24. Classification of notes payable. b 25. Classification of discounts on notes payable. d 26. Identify current liability. c 27. Bonds reported as current liability. d 28. Identify item which is not a current liability. c 29. Dividends reported as current liability. d 30. Classification of stock dividends distributable. c 31. Identify item which is not a current liability. d 32. Identify current liability. c 33. Characteristic of current liability. d 34. Definition of a liability. b 35. Importance of liability section of balance sheet. a 36. Current liabilities and operating cycle.
Multiple Choice—Conceptual (cont.)

Answer No. Description

a 37. Present value and concept of a liability. c 38.…...

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