Problem 1-7 Multiple choice (IFRS)

1. Which of the following statements best describes the term "liability" ?

a. An excess of equity over current assets
b. Resources to meet financial commitments as they fall due
c. The residual interest in the assets of the entity after deducting all of the liabilities
d. A present obligation of the entity arising from past events
2. Conceptually, a short-term note payable with no stated rate of interest should be
a. Recorded at maturity value.
b. Recorded at the face amount.
c. Discounted to its present value.
d. Reported separately from other short-term notes payable.
3. In which section of the statement of financial position should employment taxes
that are due for settlement in 15 months' ime be presented?
a. Current liabilities
b. Current assets
c. Noncurrent liabilities
d. Noncurrent assets
4. Which of the following should be classified as noncurrent liability?
a. Unearned revenue
b. Mandatory redeemable preference share
c. The currently maturing portion of long-term debt
d. Accrued salaries payable to management
5. Which of the following is a noncurrent liability?
a. Income tax payable
b. One-year magazine subscription received in advance
c. Unearned interest income related to noninterest-bearing long-term note
receivable
d. Estimated warranty liability