ACC 302 Test Questions and Correct Answers
Liabilities are
a. obligations arising from past transactions and payable in assets or services in the
future.
b. deferred credits that are recognized and measured in conformity with generally
accepted accounting principles.
c. obligations to transfer ownership shares to other entities in the future.
d.any accounts having credit balances after closing entries are made.
a. obligations arising from past transactions and payable in assets or services in the future.
Current liabilities are defined as obligations whose liquidation is reasonably expected to
a. require the distribution of cash.
b. be paid within a year.
c. require the use of current assets.
d.require the use of current assets or the creation of other current liabilities.
d.require the use of current assets or the creation of other current liabilities.
Which of the following is true about accounts payable?
1.Accounts payable are also called trade accounts payable.
2.Accounts payable are generally interest-bearing.
3.Accounts payable are generally recorded upon receipt of the purchased goods.
Select answer from the options below:
3
2
Both 1 and 3 are true.
1
, Both 1 and 3 are true.
What is the relationship between current liabilities and a company's operating cycle?
a. There is no relationship between the two.
b. Liquidation of current liabilities is reasonably expected within the company's
operating cycle (or one year if less).
c. Current liabilities are the result of operating transactions.
d. Current liabilities can't exceed the amount incurred in one operating cycle.
b. Liquidation of current liabilities is reasonably expected within the company's operating
cycle (or one year if less).
Unearned revenue results from which of the following situations?
a. Home Depot sells a Weber grill that comes with a manufacturer's 10-year warranty.
b. Home Depot purchases grills on account from Weber.
c. Target makes a sale to a customer who uses his or her Target credit card.
d. Target sells gift cards.
d. Target sells gift cards.
When payment is received before services have been performed,
a. a liability is recorded unless the services will be performed within the next operating
cycle.
b. a liability is recorded because there is an obligation to perform services in the future.
c. revenue is accrued until the service has been performed.
d. revenue is recorded because the payment has been received.
b. a liability is recorded because there is an obligation to perform services in the future.
Liabilities are
a. obligations arising from past transactions and payable in assets or services in the
future.
b. deferred credits that are recognized and measured in conformity with generally
accepted accounting principles.
c. obligations to transfer ownership shares to other entities in the future.
d.any accounts having credit balances after closing entries are made.
a. obligations arising from past transactions and payable in assets or services in the future.
Current liabilities are defined as obligations whose liquidation is reasonably expected to
a. require the distribution of cash.
b. be paid within a year.
c. require the use of current assets.
d.require the use of current assets or the creation of other current liabilities.
d.require the use of current assets or the creation of other current liabilities.
Which of the following is true about accounts payable?
1.Accounts payable are also called trade accounts payable.
2.Accounts payable are generally interest-bearing.
3.Accounts payable are generally recorded upon receipt of the purchased goods.
Select answer from the options below:
3
2
Both 1 and 3 are true.
1
, Both 1 and 3 are true.
What is the relationship between current liabilities and a company's operating cycle?
a. There is no relationship between the two.
b. Liquidation of current liabilities is reasonably expected within the company's
operating cycle (or one year if less).
c. Current liabilities are the result of operating transactions.
d. Current liabilities can't exceed the amount incurred in one operating cycle.
b. Liquidation of current liabilities is reasonably expected within the company's operating
cycle (or one year if less).
Unearned revenue results from which of the following situations?
a. Home Depot sells a Weber grill that comes with a manufacturer's 10-year warranty.
b. Home Depot purchases grills on account from Weber.
c. Target makes a sale to a customer who uses his or her Target credit card.
d. Target sells gift cards.
d. Target sells gift cards.
When payment is received before services have been performed,
a. a liability is recorded unless the services will be performed within the next operating
cycle.
b. a liability is recorded because there is an obligation to perform services in the future.
c. revenue is accrued until the service has been performed.
d. revenue is recorded because the payment has been received.
b. a liability is recorded because there is an obligation to perform services in the future.
