A Firm Classifies Liabilities Which Fall Due After the Operating

question 14

Multiple Choice

A firm classifies liabilities which fall due after the operating cycle, usually greater than one year, as

• A)a current liability.
• B)a long-term asset.
• C)a noncurrent liability.
• D)part of shareholders' equity.
• E)contingent liability.

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Definitions:

Elasticity

An indicator of the degree to which the demand or supply of a product fluctuates following a variation in its price.

Resource Demand

The desire and ability of consumers or firms to acquire specific quantities of resources at various prices.

Marginal Revenue Product

The increased earnings resulting from the application of an extra unit of a resource, such as capital or labor.

Demand Schedule

A diagram indicating the volume of goods or services that purchasers intend and can afford to buy across a range of prices.