ac332 - Name: _ Date: _ AC 332 Final 1. Which of the...

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Name: __________________________ Date: _____________ AC 332 Final 1. Which of the following should not be included in the current liabilities section of the balance sheet? A) Trade notes payable B) Short-term zero-interest-bearing notes payable C) The discount on short-term notes payable D) All of these are included 2. Which of the following sets of conditions would give rise to the accrual of a contingency under current generally accepted accounting principles? A) Amount of loss is reasonably estimable and event occurs infrequently. B) Amount of loss is reasonably estimable and occurrence of event is probable. C) Event is unusual in nature and occurrence of event is probable. D) Event is unusual in nature and event occurs infrequently. 3. A contingency can be accrued when A) it is certain that funds are available to settle the disputed amount. B) an asset may have been impaired. C) the amount of the loss can be reasonably estimated and it is probable that an asset has been impaired or a liability incurred. D) it is probable that an asset has been impaired or a liability incurred even though the amount of the loss cannot be reasonably estimated. 4. Marx Company becomes aware of a lawsuit after the date of the financial statements, but before they are issued. A loss and related liability should be reported in the financial statements if the amount can be reasonably estimated, an unfavorable outcome is highly probable, and A) Marx Company admits guilt. B) the court will decide the case within one year. C) the damages appear to be material. Page 1
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D) the cause for action occurred during the accounting period covered by the financial statements. 5. Use of the accrual method in accounting for product warranty costs A) is required for federal income tax purposes. B)
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This note was uploaded on 04/26/2010 for the course AC 332 taught by Professor Borrow during the Spring '10 term at Brenau.

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ac332 - Name: _ Date: _ AC 332 Final 1. Which of the...

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