True or false

1. Contingent gains should only be recorded if they are probable and can be reasonably estimated. 2. A long-term note payable is an example of a current liability. 3. Restatement of financial statements should occur if a company attempts to mislead investors by understating its liabilities. 4. Embedded and extended warranties should be accounted for in the same way . 5. When estimating its warranty liability, a company should consider things like the state of the economy. 6. Contingent liabilities should be reported on the balance sheet if they are both probable and can be reasonably estimated. 7. Unearned revenue and accounts receivable are examples of current liabilities. 8. Liabilities for gift cards and similar items must be kept on the balance sheet until they are redeemed, regardless of how long that takes. 9 . One advantage of debt financing is that interest is tax deductible. 10. A company's creditors can force it into bankruptcy if it can't pay its debts. 11. Banks typically charge stronger companies higher interest rates than weaker ones because the strong companies can better afford it. 12 . Financial leverage refers to a company's ability to pay its debts off early, A avoiding interest payments. 13. Debt covenants exist to product the creditor. 14. When a company issues a be T between interest dates, the first interest Previous: 5.8 Accounting for Leases and Installment Notes Next: 6.1 The Issuance of Common Stock -> 30.74 NOV W