1. Which of the following is not normally a current liability?
a. Accounts payable
Don't use plagiarized sources. Get Your Custom Essay on
Just from $13/Page
b. Bonds payable
c. Interest payable
d. Income taxes payable
2. Sierra Inc. manufacturers environmentally friendly appliances. It offers a two-year warranty standard. In Year 1, Sierra sold 450,000 toasters. Past experience has told Sierra that approximately 4 percent of the toasters require repair at an average cost of $10 each. During Year 1, Sierra actually spends $38,000 and during Year 2, Sierra actually spends $105,000. What is the balance in the warranty liability account at the end of year 2?
Reporting contingent losses but not contingent gains is an example of which accounting principle?
c. Going concern
4. Watkins Inc. has the following assets:
Prepaid Rent $460
It has the following liabilities
Accounts Payable $560
Unearned revenue $200
Long-term Note Payable $3,500
What is Watkins’ current ratio?