Solved

Use "Yes," "No," or "Optional" to Indicate Whether Each Situation

Question 99

Matching

Use "yes," "no," or "optional" to indicate whether each situation should or should not be classified as a current liability or if accrual is optional

Premises:

Responses:

Refundable deposits received from customers.

Yes

Dividends in arrears on its cumulative preferred stock.

Unearned interest included in the face amount of a note receivable.

Optional

Estimated property taxes prior to receiving the tax bill.

Future warranty costs, but the company uses the modified cash basis.

A declared property dividend.

Sick pay benefits that accumulate, but do not vest.

Current portion of a long-term lease obligation that comes due next year.

Current portion of a serial bond payable being paid from a sinking fund.

Short-term debt that is being refinanced on a long-term basis.

Derivative financial instruments that represent fair-value obligations

Premises:

Refundable deposits received from customers.

Dividends in arrears on its cumulative preferred stock.

Unearned interest included in the face amount of a note receivable.

Estimated property taxes prior to receiving the tax bill.

Future warranty costs, but the company uses the modified cash basis.

A declared property dividend.

Sick pay benefits that accumulate, but do not vest.

Current portion of a long-term lease obligation that comes due next year.

Current portion of a serial bond payable being paid from a sinking fund.

Short-term debt that is being refinanced on a long-term basis.

Derivative financial instruments that represent fair-value obligations

Responses:

Yes

Optional

Correct Answer:

Premises:

Responses:

Refundable deposits received from customers.

Dividends in arrears on its cumulative preferred stock.

Unearned interest included in the face amount of a note receivable.

Estimated property taxes prior to receiving the tax bill.

Future warranty costs, but the company uses the modified cash basis.

A declared property dividend.

Sick pay benefits that accumulate, but do not vest.

Current portion of a long-term lease obligation that comes due next year.

Current portion of a serial bond payable being paid from a sinking fund.

Short-term debt that is being refinanced on a long-term basis.

Derivative financial instruments that represent fair-value obligations

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