Nature of Liabilities Presented below is the current liabilities section of Micro Corporation. Answer the following questions.

(a) What are the essential characteristics that make an item a liability?

(b) How does one distinguish between a current liability and a long-term liability?

(c) What are accrued liabilities? Give three examples of accrued liabilities that Micro might have.

(d) What is the theoretically correct way to value liabilities how are current liabilities usually valued?

(e) Why are notes payable reported first in the current liabilities section?

(f) What might be the items that comprise Micro's liability for 'Compensation to employees'?

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($000) 2011 2010 Current Liabilitles $ 7,700 $ 68,713 179,496 60,312 158,198 10,486 16,592 Notes payable Accounts payable Compensation to employees Accrued liabilities 101,379 31,649 77,621 26,491 6,649 Income taxes payable Current maturities of long-tem debt $493,797 $251,489 Total current liabilities