chapter 13

Question 1

current liabilities

Answer 1

are the obligations whose liquidation is reasonable expected to require use of existing resources properly classified as current assets or the creation of other liabilites

Question 2

accounts payable(trade accounts payable)

Answer 2

balances owed to others for goods, supplies or services purchased on open account

Question 3

notes payable

Answer 3

written promises to pay a certain sum of money on a specified future date.

Question 4

discount on notes payable

Answer 4

• represents the cost of borrowing.
• debited to interest expense over the life of the note.
• represents interest expense chargeable to future period

Question 5

dividends payable

Answer 5

amount owed by a corporation to its stockholder as a result to its stockholders as result of board of directors’ authorization

Question 6

returnable cash deposits

Answer 6

received from customers and employees.

Question 7

Federal unemployment tax act

Answer 7

-only employers pay the unemployment tax

-

Question 8

typical gain contingencies

Answer 8

1.possible receipts of monies from gifts, donations asset sales.
2. possible refunds from the gov
3, pending court case with a probable favorable outcome
4. tax loss carryforwards
THEY ARE NOT RECORDED
**disclosed only if probability of receipt is high

Question 9

Loss Contingencies

probable

Answer 9

accrue and footnote

Question 10

Loss Contingencies

reasonable possible

Answer 10

footnote

Question 11

Loss Contingencies

remote

Answer 11

ignore

Question 12

asset retirement obligation

Answer 12

recognizes when it has an existing legal obligation associated with the retirement of a long-lived asset and when it can reasonable estimate the amount of the liabilit