Questions Exercises

1. Liabilities are present obligation of the reporting entity arising from past events, the settlement of which is expected to result to an outflow from the entity of resources embodying economic benefits. 2. Liability is measured through the amount received. Also in the present value of expected outflows. 3. The liability is measured through its cause for the settlement of what was received is the cause of the liability. 4. Most liabilities are recognized at beginning of term because of the fact that in order for something to use, you must make settlement for it. The beginning of the liability s term marks the beginning of utilization of the thing received. 5. The liability section is very important because it help assess the financial position and liquidity of the business. Also, it shows how the business generates its capital. 6. Only those non-interest bearing liabilities are measured at their maturity value. 7. Cost principle is used in determining liability with respect to the fact that the item received as a counterpart of the liability is also measured at its cost. 8. Secured w/ collateral Unsecured w/out collateral

Matching Type 1. 2. 3. 4. 5. 6. 7. B E E B B B B

1. 2. 3. 4. 5. 6. 7. 8. 9.

A A A D A B E A C

10. A

Multi MC

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35.

B A B D B A A D D D A B E C D C D C B C D A A B D ???? A A A D A A D C C

36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47.

B A A C C C A B B A C C