1. A provision is defined as a:

Multiple Choice

• A liability of uncertain timing or amount.

• An estimate of receivables that will are likely not collectible.

• A financial liability that cannot be measured accurately.

• A liability that is contingent on a future event that is unlikely to occur.

2.

Liabilities are:

Multiple Choice

• Any accounts having credit balances on the balance sheet.

• Obligations to transfer ownership shares to other entities in the future.

• Obligations arising from past transactions and payable in assets or services in the future.

• A contractual obligation such as a purchase order issued for a specific item of inventory or equipment to be delivered in the future.

3. When must a loan be reported as 'current'?

Multiple Choice

• If due 18 months after year-end.

• A long term loan that is in covenant breach and an agreement is reached after year-end.

• A long term loan that is in covenant breach and an agreement is reached before year-end.

• A long-term debt with no stated maturity date.

4.

Which one of the following is a contingent loss that is required to be disclosed only in a note to the financial statements?

Multiple Choice

• A loss that is not certain and the amount can be reasonably determined.

• A loss that probably will never materialize and the amount would not have a significant impact on the company.

• A probable loss of a known amount.

• A probable loss of a reasonably estimated amount.

5.

Which does not represent a financial liability

Multiple Choice

• Cash dividends payable are dividends declared are reported as a current liability if it is payable within the coming year.

• Dividends in arrears for preferred shares.

• Bonus that depends on earnings of the current year.

• Payroll taxes and withholdings.