Which of the Following Liabilities Is Created When a Company

question 119

Multiple Choice

Which of the following liabilities is created when a company receives cash for services to be provided in the future?

• A)unearned revenue
• B)accrued liability
• C)accounts payable
• D)estimated warranty payable

Recognize the reporting requirements for discontinued operations.

Understand the concepts of pro forma income and its exclusions.

Learn the strategies for evaluating financial statements, including ratio analysis, horizontal and vertical analysis.

Understand the interest of different stakeholders (creditors, stockholders) in financial statement analysis.

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Definitions:

Working Capital

A financial metric representing the difference between a company's current assets and current liabilities, indicating short-term liquidity.

Capital Budgeting

Capital budgeting is the process a business undertakes to evaluate potential major investments or expenditures to achieve long-term benefits.

Straight-Line Depreciation

A depreciation method where an asset's cost is evenly distributed over its expected lifespan.

Net Present Value

A financial metric used to evaluate the profitability of an investment, calculated by subtracting the present value of cash outflows from the present value of cash inflows over a period.