Question : Multiple Choice Questions 46. All of the following statements regarding liabilities true : 1258081

Multiple Choice Questions
 

46. All of the following statements regarding liabilities are true except: 
A. A liability is a probable future payment of assets or services.
B. Unearned future wages to be paid to employees should be recorded as liabilities.
C. For a liability to be reported, it must be a present obligation that results from a past transaction or event, and requires a future payment of assets or services.
D. Information about liabilities is more useful when the balance sheet identifies them as either current or long term.
E. Liabilities can involve uncertainty in whom to pay.

47. Obligations to be paid within one year or the company’s operating cycle, whichever is longer, are: 
A. Current assets.
B. Current liabilities.
C. Earned revenues.
D. Operating cycle liabilities.
E. Bills.

48. Obligations not expected to be paid within the longer of one year or the company’s operating cycle are reported as: 
A. Current assets.
B. Current liabilities.
C. Long-term liabilities.
D. Operating cycle liabilities.
E. Bills.

49. All of the following statements regarding uncertainty in liabilities are true except: 
A. Liabilities can involve uncertainty in whom to pay.
B. A company can create a liability with a known amount even when the holder of the note may not be known until the maturity date.
C. A company can have an obligation of a known amount to a known creditor but not know when it must be paid.
D. A company only records liabilities when it knows whom to pay, when to pay, and how much to pay.
E. A company can be aware of an obligation but not know how much will be required to settle it.

50. In order to be reported, liabilities must: 
A. Be certain.
B. Sometimes be estimated.
C. Be for a specific amount.
D. Always have a definite date for payment.
E. Involve an outflow of cash.

51. All of the following are true of known liabilitiesexcept: 
A. Include accounts payable, notes payable, and payroll.
B. Are obligations set by agreements, contracts, or laws.
C. Are measurable.
D. Are definitely determinable.
E. May depend on some future event occurring.

52. Accounts payable are: 
A. Amounts owed to suppliers for products and/or services purchased on credit.
B. Long-term liabilities.
C. Estimated liabilities.
D. Not usually due on specific dates.
E. Always payable within 30 days.

53. Amounts received in advance from customers for future products or services: 
A. Are revenues.
B. Increase income.
C. Are liabilities.
D. Are not allowed under GAAP.
E. Require an outlay of cash in the future.

54. When a company is obligated for sales taxes payable, it is reported as a(n): 
A. Estimated liability.
B. Contingent liability.
C. Current liability.
D. Business expense.
E. Long-term liability.

55. Which of the following do not apply to unearned revenues? 
A. Also called deferred revenues.
B. Amounts received in advance from customers for future delivery of products or services.
C. Also called collections in advance.
D. Also called prepayments.
E. Amounts to be received in the future from customers for delivery of products or services in the current period.