QUIZ A CLASS: Student Number: Student Name: 1. The characteristics of a liability include: A. A past transaction or event. B. A present obligation. C. A future payment of assets or services. D. Both (a) and (b). E. All of these. 2. Unearned revenues are: A. Also called deferred revenues. B. Amounts received in advance from customers for future delivery of products or services. C. Also called collections in advance. D. Also called prepayments. E. All of these. 3. On November 1, Carter Company signed a 120-day, 10% note payable, with a face value of $9,000. What is the adjusting entry for the accrued interest at December 31 on the note? A. Debit interest expense, $0; credit interest payable, $0. B. Debit interest expense, $100; credit interest payable, $100. C. Debit interest expense, $150; credit interest payable, $150. D. Debit interest expense, $200; credit interest payable, $200. E. Debit interest expense, $300; credit interest payable, $300. 4. Employee vacation benefits: A. Are estimated liabilities. B. Are contingent liabilities. C. Are recorded as an expense when the employee takes a vacation. D. Are recorded as an expense when the employee retires. E. Increase net income. 5. Buying stock in a corporation is attractive to investors because: A. Stockholders are not liable for the corporation's actions and debts. B. Stock is easily transferred. C. A corporation has unlimited life. D. Shareholders are not agents of the corporation.
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