Payables and Accrued Liabilities (F5:M1)

Question 1

if you’re given a bond payable and discount on bond payable how do you determine the amount that should be classified as a current liability?

Answer 1

bond payable - discount = current liability

Question 2

are deferred tax liabilities current or non-current liabilities?

Answer 2

non-current

Question 3

what is the formula for calculating accretion expense?

Answer 3

beginning (of period) ARO x risk-adjusted (accretion) rate

Question 4

should long-term debt that matures within one year be classified as a current liability?

Answer 4

yes, unless retirement is to be accomplished with other than current assets (e.g., proceeds from issuance of CS)

Question 5

what are the 3 criteria for recognizing a liability associated with exit or disposal activities?

Answer 5

obligating event has occurred

event results in present obligation to transfer assets or to provide services in future

entity has no discretion to avoid future transfer of assets

Question 6

accrued compensated absences generally includes ___ but not ___.

Answer 6

vacation pay; sick pay

Question 7

costs associated with exit and disposal activities include:

Answer 7

involuntary employee termination benefits

costs to terminate a contract that is not a capital lease

costs to consolidate facilities or relocate employees

Question 8

cum accretion exp + cum dep exp = ?

Answer 8

asset retirement obligation (ARO)