A current liability is a debt that can reasonably be expected to be paid

Question 1 options:

	within one year.
	between 6 months and 18 months.
	out of currently recognized revenues.
	out of cash currently on hand.

Question 2 (1 point)

In most companies, current liabilities are paid within

Question 2 options:

	one year through the creation of other current liabilities.
	one month through the creation of other current liabilities.
	one year out of current assets.
	three months out of current assets.

Question 3 (1 point)

Operating line of credit borrowings usually

Question 3 options:

	are credited to a note payable account.
	are reported as a non-current liability.
	are debited to the cash account and result in a current liability.
	are required by all companies.

Question 4 (1 point)

An operating line of credit

Question 4 options:

	is a non-current liability.
	is required by all companies.
	helps companies manage temporary cash shortages.
	is usually required by the bank in case a company is unable to repay a loan.

Question 5 (1 point)

A note payable is in the form of

Question 5 options:

	a contingency that is reasonably likely to occur.
	a written promissory note.
	an oral agreement.
	a standing agreement.

Question 6 (1 point)

The entry to record the proceeds upon issuing an interest-bearing note is

Question 6 options:

	Interest Expense, Cash, Notes Payable.
	Cash, Notes Payable.
	Notes Payable, Cash.
	Cash, Notes Payable, Interest Payable.

Question 7 (1 point)

Interest expense on an interest-bearing note is

Question 7 options:

	always equal to zero.
	accrued over the life of the note.
	only recorded at the time the note is issued.
	only recorded at maturity when the note is paid.

Question 8 (1 point)

On September 1, Banner Corp. borrowed $70,000 from the City Bank for five months at 9%. Interest is payable at maturity. The entry Banner must make on December 31 before issuing their financial statements is

Question 8 options:

	Dr. Interest Expense $6,300, Cr. Notes Payable $6,300.
	Dr. Interest Expense $1,575, Cr. Interest Payable $1,575.
	Dr. Interest Expense $2,625, Cr. Notes Payable $2,625.
	Dr. Interest Expense $2,100, Cr. Interest Payable $2,100.

Question 9 (1 point)

A 9% six-month note for $10,000 was recorded on October 1. What journal entry would be recorded at the year-end of December 31 if interest is payable at maturity?

Question 9 options:

	Note Payable $900, Interest Payable $450, Interest Expense $450
	Interest Expense $900, Interest Payable $900
	Interest Expense $225, Interest Payable $225
	Interest Expense $450, Notes Payable $450

Question 10 (1 point)

Under ASPE, in order to be accrued (recorded), contingencies must be

Question 10 options:

	likely.
	estimable.
	likely and estimable.
	likely or estimable.