A20 Final Exam Review Quiz - Chapter 10 & 18

Accounts payable may also be referred to as trade payables  and are the result of goods that have been purchased on credit.

Cash payments received in advance of goods being provided  or services being performed should still be recorded as revenues.

A current liability to the federal government arises when a  business sells an item and collects HST on it.

A company with an operating line of credit has been pre-authorized by the bank to borrow money, up to a certain amount.

A refrigerator is sold in year 1 and is guaranteed for three years. A repair is made in year 2. The company’s entry upon making the repair would include a debit to estimated warranty liability.

Interest expense should not be recorded prior to maturity.

Current maturities of long-term debt are identified on the balance sheet as current liabilities.

Under ASPE, a contingent liability is recorded if it is likely and the amount can be reasonably estimated.

Property tax is an example of a contingent liability.

If the total receipts of $5,300 include 13% HST, the HST is equal to $518.

Current liabilities can be listed in order of liquidity.

An estimated liability should not be recorded until the exact amount is known.

Canada Pension Plan has no annual maximum pensionable earnings.

Net pay for hourly workers with no overtime can be determined by applying the hourly rate of

pay to the number of hours worked.

Employers are required to pay 1.4 times employment insurance premiums that are paid by the employees.