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1. Assets to be sold, consumed or realized as part of th normal operating cycle are Problem 8-8 Mu Current assets b. Noncurrent assets c. Classified as current or noncurrent in accordance wit ن خنه a. other criteria d. Noncurrent investments expects to settle

1. Assets to be sold, consumed or realized as part of th normal operating cycle are Problem 8-8 Mu Current assets b. Noncurrent assets c. Classified as current or noncurrent in accordance wit ن خنه a. other criteria d. Noncurrent investments expects to settle

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Kindly answer the following questions in problems 8-8 and 8-9.
Problem 8-8 Multiple choice (IAA) 1. Assets to be sold, consumed or realized as part of th normal operating cycle are a. Current assets b. Noncurrent assets c. Classified as current or noncurrent in accordance wit other criteria d. Noncurrent investments 2. Liabilities that an entity expects to settle within the normal operating cycle are classified as a. Noncurrent liabilities b. Current or noncurrent liabilities in accordance with other criteria c. Current liabilities d. Equity 3. What is an example of an item which is not an element of working capital? a. Accrued interest receivable b. Goodwill c. Goods in process d. Trading investment 4. Accrued revenue would normally appear in the statement of financial position under a. Noncurrent assets b. Current liabilities c. Noncurrent liabilities d. Current assets 5. Which of the following is usually classified as noncurrent asset? a. Plant expansion fund b. Prepaid rent c. Supplies unused d. Trading investment 160 Problem 1. Cash month a. Cu b. Eq c. Ne d. No 2. Empl montl a. C- b. C C. N d. N 3. A loa enti shou a. C b. C c. L d. I 4. A fi repc a. b. C. d. 5. WH ag lia a. b. C. d.
Transcribed Image Text:Problem 8-8 Multiple choice (IAA) 1. Assets to be sold, consumed or realized as part of th normal operating cycle are a. Current assets b. Noncurrent assets c. Classified as current or noncurrent in accordance wit other criteria d. Noncurrent investments 2. Liabilities that an entity expects to settle within the normal operating cycle are classified as a. Noncurrent liabilities b. Current or noncurrent liabilities in accordance with other criteria c. Current liabilities d. Equity 3. What is an example of an item which is not an element of working capital? a. Accrued interest receivable b. Goodwill c. Goods in process d. Trading investment 4. Accrued revenue would normally appear in the statement of financial position under a. Noncurrent assets b. Current liabilities c. Noncurrent liabilities d. Current assets 5. Which of the following is usually classified as noncurrent asset? a. Plant expansion fund b. Prepaid rent c. Supplies unused d. Trading investment 160 Problem 1. Cash month a. Cu b. Eq c. Ne d. No 2. Empl montl a. C- b. C C. N d. N 3. A loa enti shou a. C b. C c. L d. I 4. A fi repc a. b. C. d. 5. WH ag lia a. b. C. d.
che th ne h f Problem 8-9 Multiple choice (AICPA Adapted) 1. Cash restricted for the settlement of a liability due 18 months after the reporting period should be presented as Current asset a. b. Equity c. Noncurrent liability d. Noncurrent asset 2. Employment taxes that are due for settlement in 15 months' time should be presented as a. Current liability b. Current asset c. Noncurrent liability d. Noncurrent asset 3. A loan due for repayment in six months' time but the entity has the right to defer repayment two years later should be presented as. a. Current liability b. Current asset c. Noncurrent liability d. Noncurrent asset 4. A financial liability due within twelve months after the reporting period shall be classified as noncurrent a. When it is refinanced on a long-term basis. b. When the entity has no right to refinance. c. When it is refinanced on a long-term basis after the end of reporting period. d. When it is refinanced on a long-term basis on or before the end of reporting period. 5. When an entity breaches a covenant under a long-term loan agreement on or before the end of the reporting period, the liability is classified as a. Current under all circumstances b. Noncurrent under all circumstances C. Current or noncurrent at the discretion of the borrower d. Noncurrent if the lender agreed at the end of reporting period to provide a grace period for at least twelve months after the reporting period. 161
Transcribed Image Text:che th ne h f Problem 8-9 Multiple choice (AICPA Adapted) 1. Cash restricted for the settlement of a liability due 18 months after the reporting period should be presented as Current asset a. b. Equity c. Noncurrent liability d. Noncurrent asset 2. Employment taxes that are due for settlement in 15 months' time should be presented as a. Current liability b. Current asset c. Noncurrent liability d. Noncurrent asset 3. A loan due for repayment in six months' time but the entity has the right to defer repayment two years later should be presented as. a. Current liability b. Current asset c. Noncurrent liability d. Noncurrent asset 4. A financial liability due within twelve months after the reporting period shall be classified as noncurrent a. When it is refinanced on a long-term basis. b. When the entity has no right to refinance. c. When it is refinanced on a long-term basis after the end of reporting period. d. When it is refinanced on a long-term basis on or before the end of reporting period. 5. When an entity breaches a covenant under a long-term loan agreement on or before the end of the reporting period, the liability is classified as a. Current under all circumstances b. Noncurrent under all circumstances C. Current or noncurrent at the discretion of the borrower d. Noncurrent if the lender agreed at the end of reporting period to provide a grace period for at least twelve months after the reporting period. 161
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