Testbank Multiple Choice Question 46 Which of the following statements is false? FICA taxes withheld from...

Testbank Multiple Choice Question 46

Which of the following statements is false?

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.

Cash dividends should be recorded as a liability when they are declared by the board of directors.

A company may exclude a short-term obligation from current liabilities if the company has a contractual right to defer settlement of the liability for at least one year after the balance sheet date.

A zero-interest-bearing note does not explicitly state an interest rate on the face of the note.

Testbank Multiple Choice Question 48

The currently maturing portion of long-term debt should be classified as a current liability if

the portion so classified will be liquidated within one year using current assets.

funds used to liquidate it are currently classified as a long-term asset.

the debt is to be converted into common stock.

the debt is to be refinanced on a long-term basis.

Solutions

Expert Solution

Question 46

Answer : False statement is : 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:

As any amount deducted as per applicable law and statue and deposited by employer, is the reponsibility of the employer to deduct the amount and deposited should be shown as current liablity even though the employer eventually remit the amount withheld to the concern taxing authority.

The current libality is the liablity which the oraganisation paid with in 12 months from the out of the current assets. so the tax deducted should be shown as current liablity.

all other statements are true.

Question 47

Answer : the portion so classified will be liquidated within one year using current assets.

Explanation :

any portion of the current liablity must be paid with in one year from the date of balance sheet out the current assets.( cash) and only the any portion of long term should classified as current liablity.

and other statment is not matched with the declation of long term debt as current liablity

ekkarill92 answered 1 year ago

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