8 - Name Chapter 8--Liability Recognition and Related...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Name Chapter 8--Liability Recognition and Related Expenses Description Instructions Modify Add Question Here Question 1 Multiple Choice 0 points Modify Remove Question Which of the following is not one of the three criteria for recognition of a liability? Answer The obligation involves a probable future sacrifice of resources at a specified or determinable date. The firm is required to make a cash payment for the goods or services. The firm has little or no discretion to avoid the transfer. The transaction or event giving rise to the liability has already occurred. Add Question Here Question 2 Multiple Choice 0 points Modify Remove Question Which of the following is not normally recognized as a liability on the balance sheet? Answer Warranties Payable. Bonds payable. Subscription Fees Received in Advance. Employment Commitments. Add Question Here Question 3 Multiple Choice 0 points Modify Remove Question Which of the following is not a condition that requires capital lease accounting? Answer The lease term extends for more than 70% of the assets economic life. The lease agreement transfers ownership of the leased asset to the lessee. The lease agreement contains a bargain purchase option. The present value of the minimum lease payments equals or exceeds 90% of the fair market value of the asset. Add Question Here Question 4 Multiple Choice 0 points Modify Remove Question Which of the following is not one of the GAAP classifications for derivatives? Answer Speculative investment Fair value hedge Asset-Liability hedge Cash flow hedge Add Question Here Question 5 Multiple Choice 0 points Modify Remove Question Derivatives are financial instruments that derive their value from changes in any of the following underlyings except Answer Stock prices Percentage discount on accounts receivable Interest rates Commodity prices Add Question Here Question 6 Multiple Choice 0 points Modify Remove Question Which of the following best describes the accounting treatment for derivative instruments not held for purposes of hedging? Answer Record as an asset or liability and recognize changes in fair value in other comprehensive income. Do not record as an asset or liability, record income from the transaction at maturity and recognize in earnings. Record as an asset or liability, recognize changes in fair value currently in earnings. Record as an asset or liability if off-balance sheet risk is material. Add Question Here Question 7 Multiple Choice 0 points Modify Remove Question Which of the following is not a distinguishing characteristic of a derivative instrument? Answer Derivative instruments have terms that require or permit net settlement. Derivative instruments have a low initial net investment....
View Full Document

This note was uploaded on 03/06/2012 for the course ACCT 6344 taught by Professor Mark during the Fall '11 term at University of Texas at Austin.

Page1 / 27

8 - Name Chapter 8--Liability Recognition and Related...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online