Accounting Principles Quiz
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Questions and Answers

What is the correct definition of a provision in accounting?

  • An obligation that is uncertain as to existence
  • An obligation that is certain as to existence
  • An obligation that is uncertain as to amount (correct)
  • An obligation that is certain as to amount

    • What is the characteristic of callable bonds?

  • Subjected to retirement at a stated amount prior to maturity at the option of the issuer (correct)
  • Subjected to retirement only after maturity at the option of the issuer
  • Subjected to retirement at a variable amount prior to maturity at the option of the issuer
  • Not subjected to retirement prior to maturity

    • When is the useful life of an asset estimated in accounting?

  • At the time of impairment of the asset
  • At the time of disposal of the asset
  • At the time that the asset is placed in service (correct)
  • At the time of acquisition of the asset

    • What happens to the carrying amount of an asset if there is a change in useful life or depreciation method?

    <p>It is recomputed and allocated over the remaining revised useful life</p> Signup and view all the answers

    How are long-term bonds classified in accounting when they eventually become current liabilities?

    <p>As current liabilities</p> Signup and view all the answers

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