Multiple choice; circle the best answer. (10 @ 2 points = 20 points) (Chap. 11) 14. The characteristics of a liability include: A. A past transaction or event. B. A present obligation. C. A future payment of assets or services. D. Both (a) and (b). E. All of these. 15. Obligations due to be paid within one year or the company's operating cycle, whichever is longer, are: A. Current assets. B. Current liabilities. C. Earned revenues. D. Operating cycle liabilities. 16. Sales taxes payable: A. Is a current liability. B. Is a contingent liability. C. Is a business expense. D. Is a long-term liability. 17. Unearned revenues are: A. Also called deferred revenues. B. Amounts received in advance from customers for future delivery of products or services. C. Also called collections in advance. D. Also called prepayments. E. All of these. 18. Prepaid Expenses are: A. Also called deferred expenses. B. Amounts paid in advance for future delivery of products or services. C. Also called assets. D. Also called prepayments. E. All of these. 19. Contingent liabilities can be: A. Probable. possible. B. Remote. D. Estimable. C. Reasonably E. All of these. 20. The times interest earned ratio reflects: A. A company's ability to pay its operating expenses on time. B. A company's ability to pay interest even if sales decline. C. A company's profitability. D. The relation between income and debt. E. The relation between assets and liabilities