1.Which of the following statements regarding liabilities is true?

They must arise through a contractual obligation.

The duty or responsibility obligates the entity.

The entity often has reasonable discretion to avoid the obligation.

They may be attributable to a future transaction or event.

2. According to the AcSB guidelines, the process of reporting an item in the financial statements of an entity is

allocation.

recognition.

matching.

realization.

3. The principal disadvantage of output measures in measuring progress toward completion of long-term contracts is

inefficiencies may cause the productivity relationship to change.

units are not comparable in time, effort, or cost to complete.

the measures are not universally applicable.

front-end loading.

4. Dividends and interest receivable would be classified as

nontrade receivables.

loans receivable.

trade receivables.

notes receivable.