CPA Financial Accounting and Reporting (FAR) : Current Liabilities
Study concepts, example questions & explanations for CPA Financial Accounting and Reporting (FAR)
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Example Questions
Example Question #1 : Payables And Accrued Liabilities
Which of the following conditions or events would least likely raise substantial doubt about an entity's ability to continue as a going concern?
Loss of a significant customer or supplier
Negative cash flows from operating activities
Flood damage to an insured warehouse
Default on a loan agreement
Flood damage to an insured warehouse
In this example, the warehouse is insured and likely to be covered by insurance after the flood.
Example Question #2 : Payables And Accrued Liabilities
Of the following liabilities, which would a company include in the current liability section of its balance sheet?
All of the answer choices are correct
Current portion due of a mortgage payable
Deferred tax liability resulting from depreciation
Short term debt to be refinanced with long term debt
Current portion due of a mortgage payable
While a mortgage is a long term liability, any portion of it due within one year is considered a current liability. The other options are all long term liabilities.
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