1.Which of the following is an example of a liability? The amount contributed to
ID: 2414746 • Letter: 1
Question
1.Which of the following is an example of a liability?
The amount contributed to the business by your partner
An amount which must be paid to a business that sold your company supplies
Equipment purchased by the business with cash
The obligation to transfer the net assets of the business to its owners
2. Which of the following is not a liability for accounting purposes
You borrow $100,000 to buy a new piece of equipment
You promise to increase wages in the coming year by $1 per hour.
Your workers have worked all week and you will pay them next Wednesday.
An amount which must be paid to a business that sold you some supplies
3.The formula to compute annual straight-line depreciation is:
Depreciable cost divided by useful life in units.
(Cost plus salvage value) divided by the useful life in years.
(Cost minus salvage value) divided by the useful life in years.
Cost divided by useful life in units.
The amount contributed to the business by your partner
An amount which must be paid to a business that sold your company supplies
Equipment purchased by the business with cash
The obligation to transfer the net assets of the business to its owners
Explanation / Answer
Answers
1.Which of the following is an example of a liability?
Wrong answer: This is an example of Equity
CORRECT ANSWER: Supplies purchased on accounts leads to creation of Accounts Payable (a liability)
Wrong answer: asset purchased by paying cash = no liability
Wrong Answer: Its not a liability
2. Which of the following is not a liability for accounting purposes
Wrong answer: it’s a liability as payment for equipment will have to be made.
CORRECT ANSWER: Promise to increase wage is not a liability for accounting purpose.
Wrong answer: it’s a liability as wages are accrued.
Wrong answer: Supplies purcahsed on account is a liability
3.The formula to compute annual straight-line depreciation is:
Wrong Answer
Wrong Answer
CORRECT ANSWER
Wrong Answer
1.Which of the following is an example of a liability?
- The amount contributed to the business by your partner
Wrong answer: This is an example of Equity
- An amount which must be paid to a business that sold your company supplies
CORRECT ANSWER: Supplies purchased on accounts leads to creation of Accounts Payable (a liability)
- Equipment purchased by the business with cash
Wrong answer: asset purchased by paying cash = no liability
- The obligation to transfer the net assets of the business to its owners
Wrong Answer: Its not a liability
2. Which of the following is not a liability for accounting purposes
- You borrow $100,000 to buy a new piece of equipment
Wrong answer: it’s a liability as payment for equipment will have to be made.
- You promise to increase wages in the coming year by $1 per hour.
CORRECT ANSWER: Promise to increase wage is not a liability for accounting purpose.
- Your workers have worked all week and you will pay them next Wednesday.
Wrong answer: it’s a liability as wages are accrued.
- An amount which must be paid to a business that sold you some supplies
Wrong answer: Supplies purcahsed on account is a liability
3.The formula to compute annual straight-line depreciation is:
- Depreciable cost divided by useful life in units.
Wrong Answer
- (Cost plus salvage value) divided by the useful life in years.
Wrong Answer
- (Cost minus salvage value) divided by the useful life in years.
CORRECT ANSWER
- Cost divided by useful life in units.
Wrong Answer
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