Principles of Accounting
12th Edition
ISBN: 9781133626985
Author: Belverd E. Needles, Marian Powers, Susan V. Crosson
Publisher: Cengage Learning
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Chapter 11, Problem 1SE
To determine
Indicate whether the following actions relates to each of the description given.
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the classified balance sheet will show which liability subsections?
A. current liabilities and other liabilities
B. current liabilities and long term liabilities
C. other liabilities and long term liabilities
D. present liabilities and tomorrow's liabilities
Estimated liabilities are disclosed in financial statements by
Note to the financial statements.
An appropriation of retained earnings.
Showing the amount among the liabilities but not extending to the liability total.
Appropriately classifying them as regular liabilities in the statement of financial position.
Potential liabilities that depend on future events arising out of past events are calleda. contingent liabilities.b. estimated liabilities.c. current liabilities.d. long-term liabilities.
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- Determine the correct classification of the following liabilities:(1) Liability with a due date which can be accelerated to within one year of the statement of financial position date; a reasonable probability exists that the due date will be accelerated.(2) Liability due on demand by creditor, probability of the creditor calling the in the liability within one year of the statement of financial position date is remote.(3) Liability due on demand by creditor, probability of the creditor calling the in the liability within one year of the statement of financial position date is reasonable but not likely.(4) Current portion of long-term debt. All are long term liabilities. All are current liabilities. Only number 1 is noncurrent. Only numbers 1 and 3 are noncurrent.arrow_forwardDetermine the correct classification of the following liabilities:(1) Liability with a due date which can be accelerated to within one year of the statement of financial position date; a reasonable probability exists that the due date will be accelerated.(2) Liability due on demand by creditor, probability of the creditor calling the in the liability within one year of the statement of financial position date is remote.(3) Liability due on demand by creditor, probability of the creditor calling the in the liability within one year of the statement of financial position date is reasonable but not likely.(4) Current portion of long-term debt. Group of answer choices Only number 1 is noncurrent. Only numbers 1 and 3 are noncurrent. All are current liabilities. All are long term liabilities.arrow_forwardDefine liabilities and distinguish between current and long-term liabilities.arrow_forward
- The primary reason for preparing a reconciliation between interest-bearing obligations outstanding during the year and interest expense in the financial statements is toa. Evaluate internal control over securities.b. Determine the validity of prepaid interest expense.c. Ascertain the reasonableness of imputed interest.d. Detect unrecorded liabilities.arrow_forwardOn which financial statement are current liabilities reported?arrow_forwardwhich 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 revenuesarrow_forward
- As a general rule, how should long-term liabilities be reported on the debtor’s balance sheet?arrow_forwardPlease determine Total liabilitiesarrow_forwardThe presentation of current and non-current liabilities in the statement of financial position (balance sheet): a. is shown only on GAAP financial statements. b. is shown on both a GAAP and an IFRS statement of financial position. c. is always shown with current liabilities reported first in an IFRS statement of financial position. d. includes contingent liabilities under IFRS.arrow_forward
- Liabilities are classified on the balance sheet as current or Select one: a. long-term. b. accrued. C. unearned. d. deferred.arrow_forwardWhich of the following would most likely be classified as a current liability? a.mortgage payable b.bond payable c.two-year note payable d.unearned rentarrow_forwardFor each of the following accounts, give key risks, relevant assertions and how to test those assertions. 1. Statement of profit or loss items 2. Non-current assets 3. Inventory 4. Recievables 5. Bank 6. Payables 7. Long-term liabilitiesarrow_forward
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