1. Conceptually, liabilities constitute a present obligation as a result of a past event and entail an expected future sacrifice of assets or services.

True or False

2. A reasonable expectation on the part of a company's stakeholders arising from a company's past practices or behaviour may constitute a constructive obligation in certain instances. True or False

3. A contingency may become a provision if the likelihood of the contingent event greatly increases. True or False

4. Loan guarantees are only recorded if they are likely to be paid. True or False

5. Accrued liabilities made due to routine operating expenses are not normally discounted. True or False

6. Executory contracts seldom require a journal entry, while onerous contracts do. True or False

7. Under the warranty expense approach, there should be no income statement effects for warranty repairs performed after the year of sale (assuming that accrued warranty expenses and expenditures equal one another). True or False

8. A lawsuit in progress wherein the defendant will probably be found guilty would likely be accounted for as a provision.

True or False

9. Current liabilities are usually discounted. True or False

10. A decline in value of a company's reporting currency relative to the foreign currency in which it has payables will result in a foreign exchange gain on the reporting company's books. True or False