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

9. Current Liabilities

Types of Liabilities

Financial Accounting

9. Current Liabilities

Types of Liabilities

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following statements about known liabilities is FALSE?

Examples of known liabilities include accounts payable, notes payable, and payroll liabilities.

Known liabilities are obligations of a company with little uncertainty regarding the amount and timing of payment.

Known liabilities are not recorded in the accounting records until they are paid.

Known liabilities arise from agreements, contracts, or laws.

Previous problemNext problem

Verified step by step guidance

Step 1: Begin by understanding the concept of 'known liabilities.' Known liabilities are obligations that a company is certain about in terms of both the amount and the timing of payment. Examples include accounts payable, notes payable, and payroll liabilities.

Step 2: Review the characteristics of known liabilities. These liabilities arise from agreements, contracts, or laws, and they are recorded in the accounting records when incurred, not when paid.

Step 3: Analyze the statements provided in the problem. Identify which statements align with the definition and characteristics of known liabilities.

Step 4: Pay close attention to the statement that says, 'Known liabilities are not recorded in the accounting records until they are paid.' This contradicts the definition of known liabilities, as they are recorded when incurred, not when paid.

Step 5: Conclude that the false statement is the one claiming that known liabilities are not recorded until they are paid, as this is inconsistent with accounting principles.