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Cards In This Set
| Front | Back |
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A zero-interest-bearing note payable that is issued at a discount will not result in any interest expense being recognized.
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False
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Company must accrue a liability for sick pay that accumulates but does not vest.
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False
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Accumulated rights exist when an employer has an obligation to make payment to an employee even after terminating his employment.
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False
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The fair value of an asset retirement obligation is recorded as both an increase to the related asset and a liability.
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True
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Paying a current liability with cash will always reduce the current ratio.
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False
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All long-term debt maturing within the next year must be classified as a current liability on the balance sheet.
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False
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Companies report the amount of social security taxes withheld from employees as well as the companies' matching portion as current liabilities until they are remitted.
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True
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Prepaid insurance should be included in the numerator when computing the acid-test (quick) ratio.
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False
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Many companies do not segregate the sales tax collected and the amount of the sale at the time of the sale.
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True
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Discount on Notes Payable is a contra account to Notes Payable on the balance sheet.
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True
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A short-term obligation can be excluded from current liabilities if the company intends to refinance it on a long-term basis.
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False
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