Module 8 Reporting and Analyzing Nonowner Financing Learning Objectives – coverage by question True/FalseMultiple ChoiceExercisesProblemsEssay QuestionsLO1Describe the accounting for current operating liabilities, including accounts payable and accrued liabilities. 1-5 1-12 1-9 1-5 1-3 LO2 Describe the accounting for current and long-term nonoperating liabilities. 6-11 13-18 10-19 4-9 4-6 LO3 Explain how credit ratings are determined and identify their effect on the cost of debt. 12-16 19-25 20-21 8-10 6-9 © Cambridge Business Publishers, 2010 Test Bank, Module 8 8-1
Module 8: Reporting and Analyzing Nonowner Financing True/False Topic: Accounts payable as a source of financing LO: 1 1. Accounts payable are a short-term source of non-interest bearing financing. Topic: Deferred revenue LO: 1 2. Unearned revenue, a current operating liability, arises when a company receives cash before any goods are delivered or services are rendered. Topic: Accrued liabilities LO: 1 3. Accrued liabilities are obligations for which there is no external transaction. Topic: Income shifting LO: 1 4. If accrued liabilities are overestimated in the current period, the reported income in a following period will be lower than it should be. Topic: Contingent liabilities LO: 1 5. Contingent liabilities that are ‘probable’ are can be reasonably estimated are recorded on the balance sheet as a liability and as an expense in the income statement. Cambridge Business Publishers, ©2010 8-2 Financial Accounting for MBAs, 4th Edition
Topic: Discount bond LO: 2
You've reached the end of your free preview.
Want to read all 37 pages?