Exam 9: Current Liabilities, Contingencies, and the True Value of Money

Proctor Inc.has a weekly payroll of $8,000 for a 5-day workweek, Monday through Friday.If December 31, the last day of the accounting year, falls on Wednesday, Proctor would make an adjusting entry that would

International accounting standards use the term provision for those contingent items that must be recorded on the balance sheet.

Match each of the following terms related to interest and time value of money calculations to their appropriate definition. -A series of payments of equal amount.

Match each of the following terms related to interest and time value of money calculations to their appropriate definition. -The concept that indicates that people should prefer to receive an immediate amount at the present time over an equal amount in the future.

From the following list, identify whether the change in the account balance during the year would be reported as operating (O) cash flow, investing (I) cash flow, financing (F) cash flow or not separately (N) reported on the statement of cash flows.Assume that the indirect method is used to prepare the operating activities section.Use the following response choices a-d. -Notes payable

When a company uses coupon or premium offers in conjunction with the sale of its products, there is no need to record any contingent liability.

The solution to this problem requires time value of money calculations.Reference to Tables 9-1 through 9-4 in the text is necessary to complete the calculations. If a company wishes to accumulate $500,000 in 20 years at 5% by making equal yearly deposits into an account, calculation of the deposits is an application of the

The solution to this problem requires time value of money calculations.Reference to Tables 9-1 through 9-4 in the text is necessary to complete the calculations. Josh and Sara want to buy a house in 4 years.If the house will cost $180,000, how much must they deposit at the end of every year for the next 4 years at 5% compounded annually in order to buy the house?

Identify the classifications of the following accounts as either current or long-term liabilities for the December 31, 2016 balance sheet. -An amount of money owed for years 2018 to 2022 to a creditor as annual installment payments on a ten-year note, due June 30, 2022.

The liability for a premium offer estimated to be redeemed is not a current liability.

The current maturity of long-term debt is a current liability.

For users of financial statements, the current liability classification in the balance sheet is important because it is most closely tied to the concept of profitability.

Accountants need not worry about calculations based upon the concept of the time value of money.

Match each of the following terms related to interest and time value of money calculations to their appropriate definition. -The amount that will be accumulated in the future when one amount is invested at the present time and accrues interest until the future time.

All of the following statements are true except:

From the following list, identify whether the change in the account balance during the year would be reported as an operating (O), an investing (I), or a financing (F) activity or not separately reported on the statement of cash flows (N).Assume that the indirect method is used to determine the cash flows from operating activities. -Current maturities of long-term debt

The payment of accounts payable results in a(n)

From the following list, identify whether the change in the account balance during the year would be reported as operating (O) cash flow, investing (I) cash flow, financing (F) cash flow or not separately (N) reported on the statement of cash flows.Assume that the indirect method is used to prepare the operating activities section.Use the following response choices a-d. -Current maturities of long-term debt

A company has $200 in cash, $500 in accounts receivable, and $700 in inventory.If current liabilities are $400, then the quick ratio would be

The solution to this problem requires time value of money calculations.Reference to Tables 9-1 through 9-4 in the text is necessary to complete the calculations. A company will have to pay a $50,000 liability in 4 years.How much must be deposited now into a bank account earning 8% compounded semiannually to fully fund the future payment?