The characteristics of a liability include A. occurrence of a past transaction or event. B. requirement of future payment of assets or rendering of services. C. a liability can be current or noncurrent. D. existence of a present obligation. E. all of these.

2. Payroll liabilities for current employees are A. contingent liabilities. B. estimated liabilities. C. can be either current or long-term depending on when workers retire. D. current liabilities. E. none of these.

3. The difference between the amount received from a note payable and the amount repaid is A. interest. B. principal. C. face value. D. discount. E. premium.

4. An estimated liability A. Is an unknown liability of a certain amount B. Can be the result of a lawsuit C. Is a liability that may occur if a future event occurs D. Is a known obligation of an uncertain amount E. None of these

5. West Coast Outdoor Co. sold $22,000 worth of trampolines with a one-year warranty. The company estimates that 2% of the sales will result in warranty work. West Coast Outdoor Co. should A. Recognize warranty expense at the time of sale B. Recognize warranty expense at the time warranty work is performed C. Recognize warranty liability at the time of sale D. Recognize warranty expense and warranty liability at the time of sale E. Recognize warranty expense at the time warranty work is performed and warranty liability at the time of sale

6. Sports World discarded a display case it had purchased for $8,000. $7,200 in accumulated depreciation had been recorded to the date of sale. Sports World should recognize a gain or loss on disposal of: A. $0. B. $800 loss. C. $800 gain. D. $8,000 loss. E. $7,200 loss.

7. Sports World bought a new display case for $12,000 and was given a trade-in of $2,000 on an old display case. The old case had an original cost of $7,000 and accumulated depreciation of $4,000 to the date of trade-in. Sports World should record the new display case at: A. $10,000. B. $10,500. C. $11,500. D. $11,700. E. $12,000.

8. If the book value (or carrying amount) of a PPE item is greater than the amount to be recovered through the asset's use or sale, the asset is said to be: A. Exchanged. B. Declined. C. Accumulated. D. Improved. E. Impaired

9. Once the estimated depreciation for an asset is calculated: A. It cannot be changed due to the historical cost principle. B. It may be revised based on new information. C. Any changes are accumulated and recognizedwhen the asset is sold. D. The estimate itself cannot be changed, however, new information should be disclosed in financial statement footnotes. E. It may be revised based on new information and any changes are accumulated and recognized when the asset is sold.

10. Additional subsequent expenditures that result in future economic benefits and can be reliably measured should be treated as a(n): A. Revenue expenditure. B. Asset expenditure. C. Capital expenditure. D. Contributed capital expenditure. E. Balance sheet expenditure.

11. During 2020, Hans Electronics sold 350 microwaves each at $1,050 per unit. Each microwave has one-year warranty. Hans estimates it will cost them $82 per unit, if a unit is brought in under warranty for repair. During 2020, Smith spent $17,500 on warranty costs for the appliances sold in 2020. Pass the journal entries for warranty liability estimation and warranty expenses for the year 2020. 5

12. On January 1, 2020, Far Co. purchased a machine for $525,000. The company expects the machine to last for 10 years or 50,000 hours of operation, with an estimated residual value of $15,000. During 2020 the machine was operated for 3,000 hours, while in 2021 it was operated for 2,600 hours. Calculate the depreciation expense for the machine for 2020 and 2021 using the following depreciation methods: (a) Straight-line 5

(b) Double declining-balance. 5

ight the correct answer. Each Multiple-Choice question is of Date: 1. The characteristics of a liability include A. occurrence of a past transaction or event. B. requirement of future payment of assets or rendering of services. C. a liability can be current or noncurrent. D. existence of a present obligation. E. all of these. I ood to go 14.During November 2021, Sunset Airlines sold out all of its eight flights going from Toronto to Cuba. Two flights depart in December 2021 and six flights depart in January 2022. Sunset collected $1,960,000 in November 2021 for the flights. Sunset's year end is December 31: Required: What adjusting entry would be needed to recognize revenue for 2021? Date the entry. What would be the value of the liability on Sunset's Balance Sheet on December 31, 2021? State if the liability is current or non-current 10 essibility: Good to go 13.On January 1, 2017, Bailey Company purchased a machine for $106,000 that was expected to last five years and has a residual value of $6,000. At the beginning of 2020, Bailey decided that the machine's estimated useful life should be revised to a total of 6 years instead of 5. Also, the residual value was now estimated to be $5,500. Straight-line depreciation was used. Calculate the depreciation expense for 2020. 10 (b) Double declining balance. 5 (c) Units-of-production. 5