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

Income taxes payable is a current liability.

A company's balance sheet shows the account,Notes Payable.This resulted from a loan made by the company's bank.If the end-of-year balance in the Notes Payable account exceeds the beginning-of-year balance by $5,000,this is shown on the cash flow statement as an

On November 1,2017,Brownsville Co.borrowed $80,000 from State Bank and signed a 12%,six-month note payable,all due at maturity.The interest on this loan is stated separately.At December 31,2017,the adjustment for this note includes a(n)

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.

At December 31,2017,an amount due on December 31,2018,would be classified as a(n)__________ liability.

The present value is the value today of a single amount to be paid or received at a specific date in the future.

A note payable due in two years is a current liability.

Almost all current liabilities appear within the __________ Activities category of the statement of cash flows.

The __________ of a single sum represents the value today of a single amount to be received or paid at a future time.

Assume the current ratio is 2 to 1.Payment on accrued salaries payable would cause the current ratio to

In the statement of cash flows,an increase in a current liability will appear as an increase in the Financing category.

To determine whether a lottery winner would prefer to receive the money in a single lump sum immediately or receive an equal amount over a period of years,you would use which type of time value of money calculation?

When borrowing money to be repaid in regular future payments,the payment is based on the present value of the loan,the interest rate,and the length of the loan.

Employees earn $6,000 per day,work five days per week,Monday through Friday,and get paid every Friday.If the previous payday was January 26 and the accounting period ends on January 31,what amount is the ending balance in the Wages Payable account?

What is the difference between simple interest and compound interest? Is the amount of interest higher or lower when the interest is simple rather than compound?

The interest earned on the principal amount only is referred to as __________.