Principles of Accounting Volume 1: Financial Accounting

Mitchell Franklin, Patty Graybeal, Dixon Cooper

Chapter 12 Current Liabilities - all with Video Answers

Educators

Section 1

Identify and Describe Current Liabilities

Problem 1

Which of the following is not considered a current liability?
A. Accounts Payable
B. Unearned Revenue
C. the component of a twenty-year note payable due in year 20
D. current portion of a noncurrent note payable

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Problem 2

A company regularly purchases materials from a manufacturer on credit. Payments for these purchases occur within the company’s operating cycle. They do not include interest and are established with an invoice outlining purchase details, credit terms, and shipping charges. Which current liability situation does this best describe?
A. sales tax payable
B. accounts payable
C. unearned revenue
D. income taxes payable

Ansh V.

Numerade Educator

Problem 3

The following is selected financial data from Block Industries:
How much does Block Industries have in current liabilities?
A. $\$ 19,800$
B. $\$ 18,300$
C. $\$ 12,300$
D. $\$ 25,800$

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Problem 4

A ski company takes out a $\$ 400,000$ loan from a bank. The bank requires eight equal repayments of the loan principal, paid annually. Assume no interest is paid or accumulated on the loan until the final repayment. How much of the loan principal is considered a current portion of a noncurrent note payable in year 3?
A. $\$ 50,000$
B. $\$ 150,000$
C. $\$ 100,000$
D. $\$ 250,000$

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