A contingent liability: O Is always of a specific amount Is a potential obligation that depends on a future event arising out of a past transaction or event O Is an obligation not requiring future payment O Is an obligation arising from the purchase of goods or services on credit O Is an obligation arising from a future event

A contingent liability: O Is always of a specific amount Is a potential obligation that depends on a future event arising out of a past transaction or event O Is an obligation not requiring future payment O Is an obligation arising from the purchase of goods or services on credit O Is an obligation arising from a future event

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter9: Current Liabilities And Contingent Obligations

Section: Chapter Questions

Problem 1GI

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Which of the following is a characteristic of a current liability? A. It is an avoidable obligation. B. It occurs because of a future transaction or event. C. It cannot be settled with services. D. It creates a present obligation for future payment of cash or services.
1. Which of the following is not an essential characteristic of a liability? * a. It is a present obligation that entails settlement by probable future transfer or use of cash, goods or services. b. The liability must be an unavoidable obligation. c. The transaction or other event creating the obligation must have already occurred. d. The obligation must be settled to an identifiable party.
An obligation that is contingent on the occurrence of a future event should be reported in the statement of financial position as a liability if: a. The amount of the obligation can be reasonably estimated. b. The future event is likely to occur. c. The occurrence of the future event is at least reasonably possible and the amount is known d. The occurrence of the future event is probable and the amount can be reasonably estimated.
Choose an example of non-current liability. O a. Interest payable O b. Bonds payable Oc. Wages payable O d. Accrued expense
1. Which of the following is an essential characteristic for an obligation to qualify as a liability? a. The obligation should have a definite amount at the report date. b. The party to whom payment will be made should be especially identifiable at report date c. The obligation should be settled in cash. d. The obligation should arise from past transactions of the enterprise e. All of the choices 2. Which of these is not a current liability? a. Serial maturity of long-term obligations b. Payables in providing services to be offered for sale c. Accruals for salaries and wages d. Contractual obligations falling due at an early date which is expected to be refunded e. none of the choices 3. An estimated liability is an obligation that is uncertain as to: a. NO - amount; NO - existence b. YES - amount; NO - existence c. NO - amount; YES - existence d. YES - amount; YES - existence
When the debtor binds himself to pay when his means permit him to do so, the obligation is: a pure obligation an obligation with a suspensive condition an obligation with a resolutory condition an obligation with a suspensive period
Which condition is necessary for the recognition of a liability? A. It is probable that an outflow of economic benefits will be required to settle an obligation B. The amount of the obligation can be measured reliably C. The amount of the obligation must be definite D. It is probable that an outflow of economic benefits will be required to settle an obligation and the amount of obligation can be measured reliably.
A contractual agreement in which the borrower receives something of value now and agrees to pay the lender in the future with an interest is called as. a. Credit b. Insurance c. Money d. Time
What is/are the rule/rules (and the exceptions, if there be any) in case an object is lost or damaged due to fortuitous event, particularly as to the liability of the debtor in an obligation.
What is/are the rule/rules (and the exceptions, if there be any) in case an object is lost or damaged due to fortuitous event, particularly as to the liability of the debtor in an obligation. Give specific examples for your answers.
TRUE OR FALSE 1. A liability can result from past, present or future events
If interest-bearing obligations are issued between interest payment dates, the accrued interest sold O A. should be included in the carrying amount of the liability as a credit to 'interest expense' or 'interest payable." B. should not be included in the carrying amount of the liability but rather credited to 'interest expense' or 'interest payable. O c. interest payable is debited D. interest income is credited O E. interest payable is credited