1. On May 1, 2019, LKJ Company borrowed cash and signed a one-year interest-bearing note on which both the principal and

interest are payable on May 1, 2020. How will the notes payable and the accrued interest be classified in the statement of

financial position at December 31, 2019?

Notes payableAccrued Interest

a) Current LiabilityNon-Current Liability

b) Non-current LiabilityCurrent Liabilities

c) Current LiabilityNot Presented

d) Current LiabilityCurrent Liability

2. Which of the following is a current liability?

a) A long-term debt maturing currently which is refinanced on a long-term basis before the end of the reporting period

b) A long-term debt maturing currently which is refinanced on a long-term basis after the reporting period but before the

issuance of financial statements

c) A long-term debt maturing currently where the enterprise has the discretion and intention to refinance on a long-term basis

d) A long-term debt maturing currently where the creditor waives the right to demand immediate payment and grants the

enterprise

3. Which of the following statements are correct?

I) An enterprise should not recognize a contingent liability

II) The amount recognized as a provision should be the best estimate of the expenditure required to settle the present

obligation at the end of the reporting period

III) A provision is a liability of certain timing and amount

IV) Accruals are liabilities to pay for goods or services that have been received or supplied but have not been paid.

a) I, II, III, and IV

b) I, II, and III only

c) II, III, and IV only

d) I, II, and IV only