Which of the following statements is false? a A company may exclude a short-term

Question

Which of the following statements is false?
a A company may exclude a short-term obligation from current liabilities if the firm
intent to refinance the obligation on a long-term basis and demonstrates an ability
to complete refinancing.
b Cash dividends should be recorded as a liability when they are declared by the
board of directors.
c Under the cash basis method , warranty costs are charged to expense as they are
paid.
d FICA taxes withheld from employees' payroll checks should never be recorded as
a liability since the employer will eventually remit the amounts withheld to the
appropriate taxing authority

Explanation / Answer

The Option-d is false. The employer must remit to the government its share of FICA tax along with the amount of FICA tax deducted from each employee's gross compensation. It should record all unremitted employer FICA taxes as payroll tax expense and payroll tax payable. But the statement given is employee's payroll checks should never be recorded as liability which is false. Therefore, the statement-d is the false statement.

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