Question

Accrued liabilities:

Multiple Choice

• Are deferred charges to expense.

• Are generally paid in services rather than cash.

• Result from services received before payment is made.

• Result from payment before services are received.

Which of the following would be disclosed in the summary of significant accounting policies disclosure note?

	Composition of Long-term debt	Depreciation Method
a.	No	Yes
b.	Yes	No
c.	Yes	Yes
d.	No	No

Multiple Choice

• Option d

• Option c

• Option a

• Option b

The acid-test ratio is also known as the:

Multiple Choice

• Debt to equity ratio.

• Times interest earned ratio.

• Quick ratio.

• Current ratio.

The usual difference between accounts payable and notes payable is:

Multiple Choice

• Legally enforceable debt.

• Current–Long-term classification.

• Explicitly stated interest.

• Known payment terms.

How are management's responsibility and the auditor’s opinion on internal controls represented in the unqualified auditor's report?

	Management's Responsibility	Auditors’ Responsibility
a.	Not stated	Stated
b.	Stated	Stated
c.	Not stated	Not stated
d.	Stated	Not stated

Multiple Choice

• Option b

• Option a

• Option d

• Option c

Answer 1

Accrued liabilities:

• Result from services received before payment is made.

Which of the following would be disclosed in the summary of significant accounting policies disclosure note?

• Option a

The acid-test ratio is also known as the:

• Quick ratio.

The usual difference between accounts payable and notes payable is:

• Legally enforceable debt.

How are management's responsibility and the auditor’s opinion on internal controls represented in the unqualified auditor's report?

• Option b