Class Date CH 10 Indicate the answer choice that best completes the statement or

Question

Class Date CH 10 Indicate the answer choice that best completes the statement or answers the question. 1. Which of the following statements is true with respect to long-term liabilities a. They are obligations that will be satisfied within one year b. An account payable is a good example of a long-term liability because it is interest-bearing c. Long-term liabilities include bonds, other long-term liabilities, and deferred income taxes. d. Accrued expenses are considered to be long-term liabilities. Indicate whether the statement is true or false 2. Callable bonds may be retired by the issuer before their specified due date. a. True b.False 3. The most obvious risk to bond investors is that a company will fail and be unable to pay its debts a. True b. False 4. The face rate is also called the nominal or stated rate a. True b. False 5. Debenture bonds are backed by specific collateral of the issuing company a. True b. False Copyright Cengage Learning Powered by Cognero. Page 1

Explanation / Answer

Dear student, only one question is allowed at a time. I am answering the first question

1)

Long – term liabilities are liabilities which are not current liabilities and need to be paid at least one year after they are issued

a)

So, option a is not correct as per the above definition

b)

Account payable is a current liability and so as per above definition it is not a long – term liability

c)

Examples of long term liabilities include bonds, other long – term liabilities, Debentures with maturity more than one year, deferred income taxes and the like. So, option c is the correct option

d)

Accrued expenses are current liabilities and are not long-term liabilities

So, as per above discussion, option c is the correct option

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