Quiz 13.63 – Classification of Liabilities Payable Within the Coming Year
Intermediate Accounting
Spiceland, Nelson, and Thomas
10th Edition
Under what condition can liabilities due within a year be classified as long-term liabilities?
Under what condition can liabilities due within a year be classified as long-term liabilities?
How would Kline classify its debt on its December 31, 2021 balance sheet under IFRS after refinancing it as long-term debt on January 5, 2022?
Why do most managers prefer to report liabilities as noncurrent instead of current, assuming other factors are constant?
What is an example of a contingency that should be accrued?
What is the required action for a reasonably estimable contingency, such as a product recall due to a material defect discovered after the fiscal year-end, that has not yet been reported in the financial statements?
EPK Company received a $10 million arbitration judgment against it for a claim made in 2020 related to alleged product defects from 2019. EPK had not accrued any litigation loss prior to learning of the judgment and does not plan to appeal. What action should EPK take in its 2021 fiscal year?
KPN suffered an accident at its manufacturing facility after the 2021 fiscal year end, which is expected to cause material losses, and KPN has relatively precise estimates of the losses. What should KPN do in this situation before issuing its financial statements?
How would you describe a monetary rebate program offered for purchasing a product?
What is typically the outcome for a seller when they offer an extended warranty?
What is the responsibility of a seller when providing a quality-assurance warranty?