Week 5 Quiz Review – Chapter 13

Here are the topics covered on the quiz. You should know the
following:

1. Reporting and accounting for contingent liabilities, including

settlement of IRS dispute as a subsequent event (but prior to
financial statements being issued)
2. Levels of “remote” or “reasonably” possible, vs. “probable”, and
treatment of a loss contingency under each of these scenarios
3. Condition under which a contingent loss should be reported in a
footnote rather than being accrued
4. Reporting liability for coupons if know experience ratio of
redemption and potential number outstanding
5. Computing accrued interest due on a Note Payable
6. Determining interest expense if know change in interest
payable account and amount paid during the year. (Hint: Think
about the activity in the interest payable account and
algebraically solve for the one variable missing)
7. Same as #6 – but for warranty liability account – what were
warranty expenditures for the year
8. Calculating effective interest rate on a noninterest bearing note,
knowing stated rate, term and maturity value
9. Determining carrying value of a noninterest bearing note,
knowing discount rate
10.How to classify collateralized Notes Payable as to their current
and long-term portions. (Hint: “refinancing ability” is a factor)