Problem 1-8 Multiple choice (IAA)

1. Liabilities are
a. Any accounts with credit balances
b. Deferred credits
c. Obligations to transfer ownership shares
d. Present obligations arising from past events and result in an outflow of resources

2. Which of the following is not a liability?

a. Deposit received from customer
b. Unearned revenue
c. Zero interest-bearing note payable
d. Stock dividend payable
3. All of the following are classified as current liabilities, except
a. Long-term debt maturing currently refinanced on a long-term basis at the end of
reporting period
b. Long-term debt maturing currently to be paid with cash in a sinking fund.
c. Long-term debt maturing currently refinanced on a long-term basis after the end
of reporting period
d. Long-term debt maturing currently with no option for refinancing.
4. Which of the following statements is not true regarding the presentation of current
liabilities in accordance with IFRS?
a. The noncurrent liabilities follow the current liabilities.
b. Current liabilities may be listed in `the order of maturity, in descending order of
magnitude or in the order of liquidity preference.
c. Current liabilities are generally recorded at face amount.
d. Current liabilities should not be offset against the assets used for liquidation.
5. What is the classification of debt callable by the creditor?
a. Noncurrent liability
b. Current liability
c. Current liability if the creditor intends to call the debt within one year.
d. Current liability if it is probable that the creditor will call the debt within one
year.