财务会计英语 练习及答案ch11.docVIP

CHAPTER 11 CURRENT LIABILITIES Chapter 11—Current Liabilities TRUE/FALSE 1. Receiving payment prior to delivering goods or services causes a current liability to be incurred. ANS: T DIF: 1 OBJ: 01 2. For a current liability to exist, the following two tests must be met. The liability must be due usually within a year and must be paid out of current assets. ANS: T DIF: 1 OBJ: 01 3. All long-term liabilities eventually become current liabilities. ANS: T DIF: 1 OBJ: 02 4. The borrower is the one who issues a note payable to a creditor. ANS: T DIF: 2 OBJ: 02 5. The payee of a note records it as a notes payable on its books. ANS: F DIF: 1 OBJ: 02 6. Interest expense is reported in the operating expense section of the income statement. ANS: F DIF: 2 OBJ: 02 7. A loan in which the lender deducts interest from the amount borrowed before the money is advanced to the borrower is called an interest bearing note. ANS: F DIF: 1 OBJ: 02 8. For an interest bearing note payable, the amount borrowed is equal to the face value of the note. ANS: T DIF: 1 OBJ: 02 9. The amount of money a borrower receives from the lender is called maturity value. ANS: F DIF: 1 OBJ: 02 10. The proceeds of a discounted note are equal to the face value of the note. ANS: F DIF: 1 OBJ: 02 11. The discount on a note payable is charged to an account that has a normal credit balance. ANS: F DIF: 1 OBJ: 02 12. The proceeds from discounting a $20,000, 60-day, note payable at 6% is $20,200. ANS: F DIF: 2 OBJ: 02 13. During the first year of operations, a company granted warranties on its products. The estimated cost of the product warranty liability at the end of the year is $8,500. The product warranty expense of $8,500 should be recorded in the years the expenditures to repair the products covered by the warranty will be paid. ANS: F DIF: 2 OBJ: 03 14. Obligations that depend on past events and that are based on future transactions a