If the Current Liabilities Now Shown on a Firm's Balance

question 122

Multiple Choice

If the current liabilities now shown on a firm's balance sheet are not paid within one year then they will be:

• A)Transferred to long-term liabilities
• B)Deducted as bad debt
• C)Listed as current liabilities one year from now
• D)Deducted from retained earnings

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Definitions:

Generally Accepted Auditing Standards

Principles that provide a framework for auditors to conduct financial audits, ensuring accuracy, consistency, and verifiability.

Negligence

A failure to exercise the care that a reasonably prudent person would exercise in similar circumstances, leading to harm or damage.

Actual Fraud

Refers to intentional deception made for personal gain or to damage another individual.

Material Fact

An important fact that if known might influence a decision maker’s decision, such as in a contract negotiation or in the dissemination of information to investors.