1. Liabilities are a. any accounts having credit balances after closing entries

ID: 2415280 • Letter: 1

Question

1. Liabilities are

a. any accounts having credit balances after closing entries are made.

b. deferred credits that are recognized and measured in conformity with generally accepted accounting principles.

c. obligations to transfer ownership shares to other entities in the future.

d. obligations arising from past transactions and payable in assets or services in the future.

2. A contingency can be accrued when:

a. it is certain that funds are available to settle the disputed amount.

b. an asset may have been impaired.

c. the amount of the loss can be reasonably estimated, and it is probable that an asset has been impaired or a liability incurred.

d. it is probable that an asset has been impaired or a liability incurred, even though the amount of the loss cannot be reasonably estimated.

1.d. obligations arising from past transactions and payable in assets or services in the future

2.c. the amount of the loss can be reasonably estimated, and it is probable that an asset has been impaired or a liability incurred.

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