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Questions and Answers
What is the correct definition of a provision in accounting?
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?
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?
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?
What happens to the carrying amount of an asset if there is a change in useful life or depreciation method?
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How are long-term bonds classified in accounting when they eventually become current liabilities?
How are long-term bonds classified in accounting when they eventually become current liabilities?
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