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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

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.

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