TRUE OR FALSE:

1. Commonly, current liabilities are payable within one year and long-term liabilities are payable more than one year from now.
2. Given a choice, most companies would prefer to report a liability as current rather than long-term
because it may cause the firm to appear less risky.
3. If a company borrows from another company rather than from a bank, the note is referred to as
commercial paper.
4. Sales taxes collected from customers by the seller are not an expense, instead they represent
current liabilities payable to the government.
5. The balance in the estimated warranty liability account is always equal to warranty expense.
6. We record gain contingencies when the gain is probable and can be reasonable estimated.