MULTIPLE CHOICE QUESTIONS
61. All of the following are reported as current liabilities
except
a.accounts payable.
b.bonds payable.
c.notes payable.
d.unearned revenues.
62. Most companies pay current liabilities
a.out of current assets.
b.by issuing interest-bearing notes payable.
c.by issuing stock.
d.by creating long-term liabilities.
63. A current liability is a debt that can reasonably be expected to be paid
a.within one year.
b.between 6 months and 18 months.
c.out of currently recognized revenues.
d.out of cash currently on hand.
64. Liabilities are classified on the statement of financial position as current or
a.deferred.
b.unearned.
c.non-current.
d.accrued.
65. The relationship of current assets to current liabilities is used in evaluating a company's
a.operating cycle.
b.revenue-producing ability.
c.short-term debt paying ability.
d.long-range solvency.
66. Which of the following is usually
not
an accrued liability?
a.Interest payable
b.Wages payable
c.Taxes payable
d.Notes payable
67. In most companies, current liabilities are paid within
a.one year through the creation of other current liabilities.
b.the operating cycle through the creation of other current liabilities.
c.one year out of current assets.
d.the operating cycle out of current assets.
68. The entry to record the issuance of an interest-bearing note credits Notes Payable for the note's
a.maturity value.
b.market value.
c.face value.
d.cash realizable value.
69. With an interest-bearing note, the amount of assets received upon issuance of the note is generally
a.equal to the note's face value.
b.greater than the note's face value.
c.less than the note's face value.
d.equal to the note's maturity value.
70. A note payable is in the form of
a.a contingency that is reasonably likely to occur.
b.a written promissory note.
c.an oral agreement.
d.a standing agreement.