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?
Default on a loan agreement
Flood damage to an insured warehouse
Loss of a significant customer or supplier
Negative cash flows from operating activities
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?
Short term debt to be refinanced with long term debt
Deferred tax liability resulting from depreciation
All of the answer choices are correct
Current portion due of a mortgage payable
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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