TRUE OR FALSE? 1. Valuation accounts also known as contra accounts or valuation reserve are neither assets nor liabilities. 2. A liability becomes payable on demand if an entity breaches a long-term loan agreement during the reporting period.

Which of the following statements is false?   A.   Asset-backed securities (ABS) may be backed by financial assets other than mortgages.   B.   Residential mortgage-backed securities (RMBS) are backed by mortgages on income producing real estate properties.   C.   The securitization of financial assets increases the liquidity of the underlying financial assets.   D.   In a sequential-pay collateralized mortgage obligations (CMOs), all scheduled principal payments and prepayments are paid to each tranche in sequence until that tranche is paid off.

A long-term liability should be reported as a current liability in a classified balance sheet if the long-term debt: A) Is callable by the creditor. B) Is secured by adequate collateral. C) Will be refinanced with stock. D) Will be refinanced with debt.

Bad debts are recorded on financial statements as     bad debt     expenses      unearned revenue      write offs

An allowance for doubtful debts is created:     a. When debtors become bankrupt   b. When debtors cease to be in business   c. To provide for possible bad debts   d. To write off bad debts

4)What’s the difference between doubtful debt and bad debt?     5) How do I create an allowance for doubtful accounts entry?

Which of the following is an example of faithful representation?   A  Showing lease payments as a rental expense B  Being prudent by recording the entire amount of a convertible loan as a liability C  Creating a provision for staff relocation costs as part of a planned restructuring D  Recording a sale and repurchase transaction with a bank as a loan rather than a sale

1. Distinguish between a current liability and a long-term debt. 2. Why is the liabilities section of the balance sheet of primary significance to bankers? 3. What is the nature of a discount on notes payable? 4. Under what conditions must an employer accrue a liability for the cost of compensated absences? 5. Under what conditions should short-term obligation be excluded from current liabilities? 5.

a parent company has extended financial help as a low interest loan to one of its subsidiaries. the repayment date is negotiable but there is no set time frame. discuss the nature of this loan, its measurement and if it should be disclosed as equity or as debt.

Why might some liabilities not be reported on the balance sheet? Why would a company look to have some liabilities not reported on its balance sheet?