Liabilities Conceptual Study with MCQs Practices
Liabilities: Debts
or obligations owed by the company, such as loans, accounts payable, and accrued
expenses.
Liabilities Conceptual Study with MCQs Practices
Detail:
Current Liabilities:
Accounts
Payable A/P: The
amount owed by the company to its suppliers or vendors for goods or services
purchased on credit.
Short-Term
Loans: The portion
of loans or borrowings that is due for repayment within the next 12 months.
Accrued
Expenses: Expenses
that have been incurred but not yet paid, such as salaries payable, utilities
payable, or interest payable.
Income
Taxes Payable: The
amount of taxes owed to the government for the current period.
Long-Term Debt:
Loans
Payable: The portion
of loans or borrowings that is due for repayment beyond the next 12 months.
Bonds
Payable: The value
of long-term bonds issued by the company to raise capital.
Mortgage
Payable: The
outstanding balance on mortgages or long-term loans secured by the company's
property or assets.
Deferred
Liabilities:
Deferred
Revenue: Payments
received in advance from customers for goods or services that have not yet been
delivered.
Deferred
Tax Liabilities:
Future tax obligations resulting from temporary differences between accounting
and tax rules.
Other Liabilities:
Pension
Liabilities: The
Company’s obligation to provide pension benefits to its employees after their
retirement.
Lease
Liabilities: The
present value of future lease payments under operating leases.
Contingent
Liabilities:
Potential obligations that may arise from pending lawsuits, warranties, or
guarantees.
example of a
current liability?
a) Long-Term
Debt
b) Bonds
Payable
c) Accounts
Payable
d) Loans
Payable
Answer:
c) Accounts Payable
What is the
definition of accrued expenses?
a) Debts
owed to suppliers
b) Short-term loans
c) Expenses Incurred
but not paid
d) Taxes
owed to the government
Answer: c)
Expenses Incurred but not paid
Which
liability category includes loans due for repayment beyond the next 12 months?
a) Current
Liabilities
b) Long-Term
Debt
c) Deferred
Liabilities
d) Other
Liabilities
Answer:
b) Long-Term Debt
What does
deferred revenue represent?
a) Payments
received in advance
b) Future
tax obligations
c) Pension
obligations
d) Future
lease payments
Answer:
a) Payments received in advance
Which
liability is related to the outstanding balance on mortgages or long-term loans
secured by the company's assets?
a) Accrued
Expenses
b) Bonds
Payable
c) Mortgage
Payable
d) Deferred
Tax Liabilities
Answer:
c) Mortgage Payable
Which
liability category includes obligations resulting from temporary differences
between accounting and tax rules?
a) Current
Liabilities
b) Long-Term
Debt
c) Deferred
Liabilities
d) Other
Liabilities
Answer:
c) Deferred Liabilities
What do
pension liabilities represent?
a)
Obligations to provide pension benefits to employees
b) Future
tax obligations
c) Payments
received in advance
d) Present
value of future lease payments
Answer:
a) Obligations to provide pension benefits to employees
Which
liability category includes potential obligations arising from pending lawsuits
or guarantees?
a) Current
Liabilities
b) Long-Term
Debt
c) Deferred
Liabilities
d)
Contingent Liabilities
Answer:
d) Contingent Liabilities
What is the
definition of accounts payable?
a) Loans due
for repayment within the next 12 months
b) Expenses
that have been incurred but not yet paid
c) Taxes
owed to the government
d) Amount owed to suppliers or vendors for goods or services purchased on credit
Answer:
d) Amount owed to suppliers or vendors for goods or services purchased on
credit
What is the
portion of loans or borrowings due for repayment within the next 12 months
called?
a) Accrued
Expenses
b) Deferred
Revenue
c)
Short-Term Loans d
d) Pension
Liabilities
Answer:
c) Short-Term Loans
What is the
value of long-term bonds issued by the company to raise capital called?
a) Deferred
Tax Liabilities
b) Bonds
Payable
c) Lease
Liabilities
d) Income Taxes Payable
Answer: b) Bonds Payable
What are
future tax obligations resulting from temporary differences between accounting
and tax rules called?
a) Deferred
Revenue
b) Bonds
Payable
c) Mortgage
Payable
d) Deferred
Tax Liabilities
Answer: d) Deferred Tax Liabilities