2. Which is a valid statement regarding recognition of liabilities? * a. A non-interest bearing note is initially recognized at face value. b. A provision should not be O recognized for future operating losses. c. For accumulating compensated absences, an entity should recognize the expense and related liability during the period the absences are incurred by the employees. d. The estimated future costs of supplying awards for customer loyalty program shall be recognized as an expense in the period the award credits are availed of by customers.

2. Which is a valid statement regarding recognition of liabilities? * a. A non-interest bearing note is initially recognized at face value. b. A provision should not be O recognized for future operating losses. c. For accumulating compensated absences, an entity should recognize the expense and related liability during the period the absences are incurred by the employees. d. The estimated future costs of supplying awards for customer loyalty program shall be recognized as an expense in the period the award credits are availed of by customers.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Which of the following is a characteristic of a current liability but not a long-term liability? a. Liquidation is reasonably expected to require use of existing resources classified as current assets or create other current liabilities. b. Unavoidable obligation. c. Transaction or other event creating the liability has already occurred. d. Present obligation that entails settlement by probable future transfer or use of cash, goods, or services.
What is the largest estimated possible loss that could arise in a safe payment schedule? no need to explain a. Book value of recorded assets b. Book value of recorded non cash assets c. Fair value of recorded assets d. Any of the above
When the required balance of the loss allowance decreases, a. the entity recognizes gain. b. the entity recognizes loss. c. the entity recognizes unearned interest to be amortized over the remaining term of the instrument. d. the entity recognizes a deferred charge to be amortized over the remaining term of the instrument.
Direction: Choose the correct answer. 1. A provision is a. An event which is not recognized because it is not probable or cannot be measured reliably b. An event which is probable and measurable c. An event which is probable, possible or remote and measurable. d. An evet which is probable but not measurable. 2.Which of the following statements is true? a. Vested and unvested past service cost shall be amortized over the remaining vesting period. b. Vested past service cost shall be recognized as expense and unvested past service cost shall be amortized over the remaining vesting period. c. Vested and unvested past service cost shall be recognized in retained earnings d. Vested and unvested past service cost shall be expense immediately. 3. In computing basic earning per share, an entity would include which of the following? a. Dividends on nonconvertible cumulative preference shares b. Dividend on ordinary shares c. Interest on convertible bonds d. Number of nonconvertible…
How should (i) a change in calculating the provision for doubtful accounts, and (ii) change in subsequent measurement of investment property from cost to fair value, accounted for? * a. (i) Currently and prospectively; (ii) Currently and prospectively b. (i) Retrospectively; (ii) Retrospectively c. (i) Retrospectively; (ii) Currently and prospectively d. (i) Currently and prospectively; (ii) Retrospectively
41.Which of the following shall be taken into consideration when measuring and recognizing impairment loss on receivables?A. Past experiences on the collectability of the receivablesB. Present condition of the debtor, including the present economic environmentC. Future expectations based on information that are available without undue cost and effort a. A, B and C b. A and B only c. A only d. B only
1. A deposit received is reported as a * current asset investment revenue liability 2. If the initial fee is collectible over an extended period and there is a significant uncertainty of its collection in full, the fee is * recognized as revenue in full recognized as revenue when collected deferred of recognition as revenue not recognized as revenue at all.
Which of the following situations does not base an accounting measure on a present value? Prepaid insurance , leases, pensions or sinking funds
A basic difference between loss contingencies and “real”liabilities is: a. Liabilities stem from past transactions; loss contingen-cies stem from future events. b. Liabilities always are recorded in the accountingrecords, whereas loss contingencies never are.c. The extent of uncertainty involved. d. Liabilities can be large in amount, whereas loss contin-gencies are immaterial.
Which of the following would not be considered a general long term liability?Select one:a. Long term promissory notesb. Long term portion of judgementc. Unfunded compensated absencesd. Unfunded rent obligation
Question 3. Classify each of the following accounts as (a) asset, (b) liability, or (c) equity. a.→Defined benefit obligation b.→Plan asset c.→Right-of-use asset d.→Contract asset e.→ Unearned revenue f.→ Deferred tax asset g.→Accumulated other comprehensive losse
Which of the following is correct about subsequent measurement of financial asset at fair value? a. the financial asset shall be measured at fair value if the business model is not to collect contractual cash flows on specified dates and the contractual cash flow ae not solely payment of principal and interest. b. An entity may designate a finacncial asset as measured at fair value through profit or loss even if the financial asset satisfies the amortized cost measurement. c. both are correct d. both are incorrect