Types of Liabilities Video Lessons

Video Thumbnail

Concept

Problem: Which of the following statements about liabilities is correct? a. When a liability is first recorded, it is measured as the value of what is received when it is incurred (e.g., cash borrowed) or the fair value (present value) of what is promised to be paid—whichever is more evident. b. A decrease in a long term liability will increase a firm’s Current Ratio. c. Accrued liabilities are expenses that have been incurred before the end of an accounting period but have not been paid. d. All of the above are correct. e. Only A & C are correct.

FREE Expert Solution
Problem Details

Which of the following statements about liabilities is correct?

a. When a liability is first recorded, it is measured as the value of what is received when it is incurred (e.g., cash borrowed) or the fair value (present value) of what is promised to be paid—whichever is more evident.

b. A decrease in a long term liability will increase a firm’s Current Ratio.

c. Accrued liabilities are expenses that have been incurred before the end of an accounting period but have not been paid.

d. All of the above are correct.

e. Only A & C are correct.

Frequently Asked Questions

What scientific concept do you need to know in order to solve this problem?

Our tutors have indicated that to solve this problem you will need to apply the Types of Liabilities concept. You can view video lessons to learn Types of Liabilities. Or if you need more Types of Liabilities practice, you can also practice Types of Liabilities practice problems.

What is the difficulty of this problem?

Our tutors rated the difficulty ofWhich of the following statements about liabilities is corre...as medium difficulty.