1. Which of the following statements about accounts payable is not true?

a) They normally carry implicit interest charges.

b) They are typically used to finance inventory purchases.

c) There may be a penalty for late payment.

d) They are usually due within 30 to 60 days.

2. When business owners offer programs that enable customers to accumulate points or other credit when making purchases, this results in

a) prepaid services.

b) customer loyalty revenues.

c) performance obligations.

d) an assurance warranty.

3. Which of the following liabilities is often referred to as free debt because it rarely carries any interest if paid within a specified period of time?

a) accounts payable

b) None of the other answersall current liabilities carry an interest rate.

c) working capital loan

d) line of credit

4. Given that most current liabilities will be settled with cash, it is important to identify and record these liabilities separately because it helps users to assess

a) liquidity.

b) cash position.

c) solvency

d) net income.

5. All current liabilities have fixed due dates and fixed payment amounts.

a) True

b) False