Accounting 2101 Quiz 13 Current Liabilities

Solvency is the ability to (4 words)

The year end adjusting entry for warranties debits: -an income account -an expense account -an asset account -a liability account

Current Liabilities are only amounts we owe to suppliers (of merchandise or services) bought on credit -True -False

At year end, by paying off debt or purchasing inventory on account a manager can manipulate -the Current Ratio -Working Capital

Liquidity is the ability to (3 words)

A contingent liability can sometimes be ignored -True -False

The Going Concern Assumption means we assume that a company: -will pay all its liabilities -will collect all its receivables

The year end adjusting entry for warranties credits -an asset account -an income account -an expense account -a liability account

The current portion of long term debt is a (2 words)

When we get a line of credit from the bank -Assets increase -Expenses Increase -Liabilities Increase -No change to the Balance Sheet and no change to the Income Statement

When we pay Sales Tax, we Debit which account (3 words)

A contingent gain can sometimes be disclosed in a footnote -True -False

Which is always the larger ratio -the Current ratio -the Acid Test Ratio

A contingent liability be disclosed in a footnote -True -False

Unearned Revenue is what kind of account -Liability -Asset -Revenue -Expense

Define Business (4 words)

hen a company spends money to fix an appliance under warranty, they Credit Cash and Debit: -a liability -an income account -an expense -an asset

When we collect Sales Tax, we Credit which account (3 words)

When you see an interest rate, it is: -always a weekly rate -always a daily rate -always a monthly rate -always an annual rate

Unearned Revenue usually turns into: -Liability -Asset -Revenue -Expense

Can a contingent Liability require a journal entry? Yes No