Which of the Following Statements Is FALSE

question 173

Multiple Choice

Which of the following statements is FALSE?

• A)Under IFRS, a company may exclude a short-term obligation from current liabilities if, at
• Statement of financial position date, the entity expects to refinance under an existing
• Agreement for at least a year, and the decision is solely at its discretion.
• 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)Federal income taxes withheld from employees' payroll cheques should be recorded as
• A long-term liability.

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Definitions:

Generally Accepted Accounting Principles

A set of accounting standards, principles, and procedures that companies must follow when compiling their financial statements in the U.S.

Duty of Care

A legal obligation imposed on an individual requiring adherence to a standard of reasonable care while performing any acts that could foreseeably harm others.

Justifiable Reliance

Justifiable reliance is a legal concept where a party makes a decision based on another party's representation or promise, considering the decision reasonable under the circumstances.

Commits Fraud

The act of intentionally deceiving someone in order to gain an unauthorized benefit or harm another person.