Test Bank — Intermediate Accounting, Volume 2, 4th Edition (Lo & Fisher, 2019) | All Chapters 11-19 Covered

TEST BANK
Intermediate Accounting, Volume 2
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Kin Lo, George Fisher

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4th Edition
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, TABLE OF CONTENTS
Test Bank: Intermediate Accounting Volume 2, 4th Edition
By Kin Lo and George Fisher
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VOLUME 2
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CHAPTER 11 Current Liabilities and Contingencies

CHAPTER 12 Non-current Financial Liabilities




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CHAPTER 13 Equities
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CHAPTER 14 Complex Financial Instruments

CHAPTER 15 Earnings Per Share




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CHAPTER 16 Accounting for Income Taxes

CHAPTER 17
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Pensions and Other Employee Future Benefits
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CHAPTER 18 Accounting for Leases
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CHAPTER 19 Statement of Cash Flows
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, Intermediate Accounting, Vol. 2, 4e (Lo/Fisher)
Chapter 11 Current Liabilities and Contingencies

Learning Objective 1

1) Which of the following characteristic is required for a liability under IFRS Framework?
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A) A past obligation.
B) A present obligation.
C) An unknown obligation.
D) A future obligation.
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Answer: B
Diff: 1 Type: MC
Skill: Concept
Objective: 11.1 Describe the nature of liabilities and differentiate between financial and non-financial liabilities.
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2) Which of the following characteristic is required for a liability under IFRS Framework?
A) Arises from a past event.
B) Arises from a non-financial transaction.
C) Arises from a future transaction.
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D) Arises from a forecasted transaction.
Answer: A
Diff: 1 Type: MC
Skill: Concept
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Objective: 11.1 Describe the nature of liabilities and differentiate between financial and non-financial liabilities.

3) Which of the following characteristic is required for a "liability" under IFRS Framework?
A) Expected to result in the inflow of economic benefits.
B) Expected to result in the inflow of economic benefits that are measurable.
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C) Expected to result in the outflow of resources embodying economic benefits.
D) Expected to result in the outflow of economic benefits that are virtually certain.
Answer: C
Diff: 1 Type: MC
Skill: Concept
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Objective: 11.1 Describe the nature of liabilities and differentiate between financial and non-financial liabilities.

4) Which of the following groups includes only financial liabilities?
A) Accounts payable, Notes payable, Warranties payable.
B) Bank loan, Bonds payable, Finance lease obligation.
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C) Accounts payable, HST payable, Bonds payable.
D) Bank overdraft, USD bank loan, Obligation under customer loyalty plan.
Answer: B
Diff: 1 Type: MC
Skill: Concept
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Objective: 11.1 Describe the nature of liabilities and differentiate between financial and non-financial liabilities.

, 5) Which of the following is correct about a "liability" under IFRS Framework?
A) A future obligation arising from past events, the settlement of which is expected to result in an inflow
of resources.
B) A present obligation arising from past events, the settlement of which is expected to result in an inflow
of resources.
C) A past obligation arising from past events, the settlement of which is expected to result in an outflow
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of resources.
D) A present obligation arising from past events, the settlement of which is expected to result in an
outflow of resources.
Answer: D
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Diff: 2 Type: MC
Skill: Concept
Objective: 11.1 Describe the nature of liabilities and differentiate between financial and non-financial liabilities.

6) Which is an example of a liability?
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A) The decision to borrow $150,000 from the ABC Bank on January 15, 2019.
B) Withdrawing $10,000 from the operating line of credit on January 15, 2019.
C) Selecting the supplier to provide the raw materials for the manufacturing process.
D) Choosing the site for a future plant expansion from a list of several possible choices.
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Answer: B
Diff: 2 Type: MC
Skill: Concept
Objective: 11.1 Describe the nature of liabilities and differentiate between financial and non-financial liabilities.
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7) Which of the following is a financial liability?
A) A magazine publisher's obligation to provide the magazine monthly for an agreed upon period.
B) Warranties.
C) Accounts payable.
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D) Income taxes payable.
Answer: C
Diff: 2 Type: MC
Skill: Concept
Objective: 11.1 Describe the nature of liabilities and differentiate between financial and non-financial liabilities.
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8) Which statement is correct under the IFRS definition for a "liability"?
A) The obligating event must be probable before the liability can be recognized.
B) The obligating event must be virtually certain before the liability can be recognized.
C) A reliable measure of the obligation must exist before the liability can be recognized.
D) A precise measure of the obligation must exist before the liability can be recognized.
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Answer: C
Diff: 2 Type: MC
Skill: Concept
Objective: 11.1 Describe the nature of liabilities and differentiate between financial and non-financial liabilities.
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