7) Explain the meaning of the following terms: current assets, trade payables, expected value, deferred revenue and warranty.
8) Which statement is correct?
A) Contingencies arise from future events.
B) Financial guarantees arise from contracts previously entered into.
C) Current liabilities arise from future events.
D) The amount to be paid for financial guarantees is known or reasonably estimable.
9) Which statement is
not
correct?
A) Contingencies arise from past events.
B) Financial guarantees arise from contracts previously entered into.
C) The amount to be paid for financial guarantees is known or reasonably estimable.
D) The amount to be paid for current liabilities is known or reasonably estimable.
10) Which statement is
not
correct?
A) The amount to be paid for contingencies is determined by future events.
B) The amount to be paid for current liabilities is determined by future events.
C) The amount to be paid for financial guarantees is determined by future events.
D) The amount to be paid for current liabilities is known or reasonably estimable.
11) For a $100,000 trade payable with terms of 2/10, net 45, how much would be reported as "purchase discount lost" under the gross method if a payment was made after 60 days?
A) $0
B) $2,000
C) $4,500
D) $10,000
12) For a $200,000 trade payable with terms of 2/15, net 50, how much would be reported as "purchase discount lost" under the net method if a payment was made after 60 days?
A) $0
B) $4,000
C) $5,000
D) $30,000