1. Short-term obligations may be excluded from current liabilities if which of the following conditions are met:

Answer choices A. The liability is contractually due to be settled more than one year (or operating cycle, if longer) after the balance sheet date.

B. The entity has a contractual right to defer settlement of the liability for at least one year (or operating cycle, if longer) after the balance sheet date.

C. neither A or B.

D. both A and B.

True or False

2. If the market rate is greater than the stated rate, bonds will be sold at a premium.