definition and recognition criteria of liabilities

A typical provision is: a.   bonds payable. b.   cash. c.   a warranty liability. d.   accounts payable.

Match the following terms or phrases in (a–g) with the explanations in 1–8. Terms or phrases may be used more than once.   Question 11 options:   Current assets/Current liabilities   Probable likelihood and estimable liability   Measures the “instant” debt-paying ability of a company   Current assets – Current liabilities   (Cash + Temporary investments + Accounts receivable)/Current liabilities   Cash + Temporary investments + Accounts receivable   Probable likelihood of a liability but cannot be estimated     Remote contingent liability   Reasonably possible likelihood of a liability   1. Current ratio 2. Working capital 3. Quick assets 4. Quick ratio 5. Record an accrual and disclose in the notes to the financial statements 6. Disclose only in notes to financial statements 7. No disclosure needed in notes to financial statements

How shall an entity subsequently measure financial liabilities?  Is IFRS measurement of financial liabilities similar to that of U.S. GAAP? Also briefly describe the requirements regarding an option to designate a financial liability at fair value through profit and loss. Q: Does U.S. GAAP allow fair value option for financial assets and liabilities? Q; What is “own credit” issue related to financial liabilities measured at fair value through profit and loss? Q: How does IFRS 9 address this “own credit” issue?

Merchandise sold by Lang Company to its customers last year amounted to $13,720,000; sales returns and allowances were $370,000, sales discounts were $175,000, and freight-out was $140,000. Net sales last year for Lang Company were a. b. C. d. Select one: a. $13,350,000. b. $13,720,000. C. $13,175,000. d. $13,035,000.

Bond discount should be presented in the financial statements of the issue as a(n) Contra liability Contract asset Prepaid expense Deferred charge

How do creditors assess risk when lending funds to a company? a. By establishing covenants in the borrowing agreement b. By monitoring the borrower’s debt-to-equity ratio c. By checking a prospective borrower’s credit rating before lending to it d. All of the above answers are correct.

Financial Statement Focuses on accounting for liabilities and non-owner financing. Consider how the revenue recognition and matching principles relate to liability recognition. Can you think of specific liabilities that relate to accounting accruals and deferrals? How about specific adjusting entries required by liabilities on the balance sheet? For instance, consider how the accrual accounting concepts relate to the recognition of interest expense (the effective cost of debt) when companies issue bonds at a discount or a premium? How does the overarching theme of information quality relate to these concepts? What concerns might financial statement users face with respect to the financial reporting quality of liabilities?

Question Content Area The journal entry a company makes for the issuance of bonds when the contract rate is less than the market rate would be a. debit Cash, credit Premium on Bonds Payable and Bonds Payable b. debit Cash, credit Bonds Payable c. debit Cash and Discount on Bonds Payable, credit Bonds Payable d. debit Bonds Payable, credit Cash

Through financial reporting perspective, what are the liability three essential characteristics Liabilities? Describe them.