Chapter 13 - TRUE/FALSE Flashcards Preview

Intermediate Accounting II > Chapter 13 - TRUE/FALSE > Flashcards

Flashcards in Chapter 13 - TRUE/FALSE Deck (15):
1

TRUE/FALSE
Amounts withheld from employees in connection with payroll often represent liabilities to third parties.

TRUE

2

TRUE/FALSE
A customer advance produces a liability that is satisfied when the product or service is provided.

TRUE

3

TRUE/FALSE
Long-term debt that is callable by the creditor in the upcoming year should be classified as a current liability only if the debt is expected to be called.

FALSE

4

TRUE/FALSE
The concept of substance over form influences the classification of obligations expected to be refinanced.

TRUE

5

TRUE/FALSE
Under IFRS, a liability is refinanced after the balance sheet date but before financial statements are issued would typically be classified as a current liability.

FALSE

6

TRUE/FALSE
Warranty expense is recorded along with the related liability in the reporting period in which the product under warranty is sold.

TRUE

7

TRUE/FALSE
For a loss contingency to be accrued, the claim must have been made before the accounting period ended.

FALSE

8

TRUE/FALSE
A company should accrue a liability for a loss contingency if it is at least reasonably possible that assets have been impaired and the amount of potential loss can be reasonably estimated.

FALSE

9

TRUE/FALSE
A disclosure note is required for all material loss contingencies for which the probability is reasonably possible.

TRUE

10

TRUE/FALSE
Under IFRS, the term "probable" indicates that a threshold of probability that is substantially more than a 50 percent chance of occurrence.

FALSE

11

TRUE/FALSE
Under IFRS, if it is probable that a contingent liability will result in a future payment but there is a range of equally likely amounts that will be paid, the midpoint of the range should be accrued as a loss.

TRUE

12

TRUE/FALSE
The cost of promotional offers should be recorded as expenses in the accounting period when the offers are redeemed by customers.

FALSE

13

TRUE/FALSE
Unlike the Social Security tax there is no maximum wage base for the Medicare portion of the FICA tax.

TRUE

14

TRUE/FALSE
State and Federal Unemployment Taxes (SUTA and FUTA) must be withheld from employee's wages.

FALSE

15

TRUE/FALSE
Some liabilities are not contractual obligations and may not be payable in cash.

TRUE