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Famba 7e tb mod07 revised 081617

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Module 7 Current Liabilities and Long-Term Liabilities Learning Objectives – Coverage by question True/False Multiple Choice Exercises Problems Essays 1-4 1-7 1-3 1 1, 2 LO2 – Analyze reporting for short-term debt. 5 8-10 4, 5 2 LO3 – Determine the pricing of long-term debt. 6-9 11-21 6-10 2 3 LO4 – Analyze reporting for long-term debt. 10 13, 22, 23 11-14 3-6 4 11-14 21, 24-29 15, 16 14-20 6-10 LO1 – Explain accounting for accrued liabilities. LO5 – Explain how the quality of debt is determined LO6 – Apply time value of money concepts (Appendix 7A) © Cambridge Business Publishers, 2018 7-1 5, 6 Financial Accounting for MBAs, 7th Edition Module 7: Current Liabilities and Long-Term Liabilities True/False Topic: Deferred Revenue LO: 1 1. Unearned revenue, an operating liability, arises when a company receives cash before any goods are delivered or services are rendered. Answer: True Topic: Accrued Liabilities LO: 1 2. Accrued liabilities are obligations for which there is no external transaction. Answer: True Rationale: Companies must estimate accrued liabilities such as rent payable because there has been no bill received or no transaction. Topic: Income Shifting LO: 1 3. If accrued liabilities are overestimated in the current period, the reported income in a following period will be lower than it should be. Answer: False Rationale: If the accrued liabilities in this period are overestimated, then the current income is l ...
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