Listed below are several terms and phrases associated with current liabilities. Pair each item from List A

Question:

Listed below are several terms and phrases associated with current liabilities. Pair each item from List A (by letter) with the item from List B that is most appropriately associated with it.

1. Interest expense is recorded in the period

interest is incurred rather than in the

period interest is paid.

a. The riskiness of a business’s

obligations.

2. Payment is reasonably possible and is

reasonably estimable.

b. Current portion of long-term

debt.

3. Cash, current investments, and accounts

receivable all divided by current

liabilities.

c. Recording a contingent liability.

4. Payment is probable and is reasonably

estimable.

d. Disclosure of a contingent

liability.

5. Gift cards.

e. Interest expense.

6. Long-term debt maturing within one

year.

f. FICA.

7. Social Security and Medicare.

g. Commercial paper.

8. Unsecured notes sold in minimum

denominations of $25,000 with

maturities up to 270 days.

h. Acid-test ratio.

9. Classifying liabilities as either current or

long-term helps investors and creditors

assess this.

i. Accrual accounting.

10. Incurred on notes payable.

j. Deferred revenue.

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Related Book For  book-img-for-question

Financial Accounting

ISBN: 978-1259914898

5th edition

Authors: David Spiceland, Wayne M. Thomas, Don Herrmann

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