1. Which of the following is an essential characteristic for an obligation to qualify as a liability? *

a. The obligation should have a definite amount at report date.

b. The party to whom payment will be made should be especially identifiable at report date

c. The obligation should be settled in cash.

d. The obligation should arise from past transactions of the enterprise

e. All of the choices

.

2. Which of these is not a current liability? *

a. Serial maturity of long-term obligations

b. Payables in providing services to be offered for sale

c. Accruals for salaries and wages

d. Contractual obligations falling due at an early date which are expected to be refunded

e. none of the choice

.

3. An estimated liability is an obligation which is uncertain as to: *

a. YES - amount; NO - existence

b. YES - amount; YES - existence

c. NO - amount; NO - existence

d. NO - amount; YES - existence

.

4. Which of the following contingencies should be generally recognized on the balance sheet when the occurrence of the contingent event is probable and its amount can be reasonably estimated

a. NO - gain; YES - loss

b. NO - gain; NO - loss

c. YES - gain; NO - loss

d. YES - gain; YES - loss

.

7. Deferred revenue is income already received and earned.

a. TRUE

b. FALSE