F4 M1 - Payables and Accrued Liabilities

Question 1

Cost Associated with Exit and Disposal

Answer 1

Involuntary termination, cost to terminate contract, consolidating facilities, relocating employees, and moving PP&E

Question 2

Asset Retirement Obligation (ARO)

Answer 2

Asset is constructed and there are legal requirements to incur removal-tyle cost

Question 3

Trade Accounts Payable

Answer 3

Amounts owed for goods, raw materials, and supplies

Question 4

Gross Method

Answer 4

Records purchase without discount

Question 5

Net Method

Answer 5

Records purchase net of discount

Question 6

Trade Notes Payable

Answer 6

Formal, written promises to pay (include stated interest rate)

Question 7

Liability Measurement

Answer 7

Fair value

Question 8

Costs Associated with Exit or Disposal are Reported

Answer 8

Discontinued operations

Question 9

ARO Qualifications for Recognition

Answer 9

Duty or responsibility, Little or no discretion to avoid, Obligating event

Question 10

Accretion Expense

Answer 10

The increase in the ARO liability due to the passage of time calculated

Question 11

Asset Retirement Obligation (ARO) =

Answer 11

Cumulative accretion expense + Cumulative depreciation expense