Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

Types of Accounting

Financial Accounting

1. Introduction to Accounting

Types of Accounting

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Multiple Choice

Which of the following statements regarding uncertainty in liabilities is false?

All liabilities involve some degree of uncertainty about the amount or timing of future payments.

Uncertainty in liabilities can relate to the amount, timing, or recipient of the future payment.

Estimated liabilities are recognized when the amount can be reasonably estimated and the obligation is probable.

Contingent liabilities are recorded on the balance sheet regardless of the likelihood of occurrence.

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Verified step by step guidance

Step 1: Understand the concept of liabilities. Liabilities are obligations that a company owes to external parties, and they often involve uncertainty regarding the amount, timing, or recipient of future payments.

Step 2: Differentiate between types of liabilities. Estimated liabilities are recognized when the obligation is probable and the amount can be reasonably estimated. Contingent liabilities, on the other hand, depend on the occurrence of a future event and are only recorded if the likelihood of occurrence is probable and the amount can be estimated.

Step 3: Analyze the false statement provided in the problem. The statement 'Contingent liabilities are recorded on the balance sheet regardless of the likelihood of occurrence' is incorrect because contingent liabilities are only recorded if the likelihood of occurrence is probable and the amount can be reasonably estimated. Otherwise, they are disclosed in the notes to the financial statements.

Step 4: Review the other statements for accuracy. The other statements correctly describe uncertainty in liabilities, including the fact that all liabilities involve some degree of uncertainty and that estimated liabilities are recognized when the obligation is probable and the amount can be reasonably estimated.

Step 5: Conclude that the false statement is the one regarding contingent liabilities being recorded on the balance sheet regardless of the likelihood of occurrence, as this contradicts the accounting treatment of contingent liabilities.