Liabilities That Might Arise from Which of the Following Probably

question 35

Multiple Choice

Liabilities that might arise from which of the following probably would be disclosed only in the notes to the financial statements?

• A)Possible warranty claims
• B)Guarantees of the debt of other companies
• C)Possible bankruptcy of an important customer whose account is current
• D)Estimated income taxes for the current year

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Definitions:

Goodwill

An intangible asset that arises when a company acquires another company for a price higher than the fair value of its net identifiable assets.

Bonds Payable

Long-term liabilities representing money a company must pay back to bondholders by a specified maturity date, including the borrowed principal amount and periodic interest payments.

Intangible Asset

An asset that is not physical in nature, such as patents, trademarks, and copyrights.

Current Maturities

Refers to the portion of long-term debt that is due to be paid within the next twelve months.