Testbank Multiple Choice Question 46

Which of the following statements is false?

FICA taxes withheld from employees' payroll checks should never be recorded as a liability since the employer will eventually remit the amounts withheld to the appropriate taxing authority.

Cash dividends should be recorded as a liability when they are declared by the board of directors.

A company may exclude a short-term obligation from current liabilities if the company has a contractual right to defer settlement of the liability for at least one year after the balance sheet date.

A zero-interest-bearing note does not explicitly state an interest rate on the face of the note.

Testbank Multiple Choice Question 48

The currently maturing portion of long-term debt should be classified as a current liability if

the portion so classified will be liquidated within one year using current assets.

funds used to liquidate it are currently classified as a long-term asset.

the debt is to be converted into common stock.

the debt is to be refinanced on a long-term basis.