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Adelphi University
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p6. Common types of current liabilities, contingencies, and commitments follow.
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a.   Accounts payable
b.   Bank loans and commercial paper
c.   Notes payable
d.  Dividends payable
e.   Sales and excise taxes payable
f.    Current portion of long-term debt
g.   Payroll liabilities
h.   Unearned revenues
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i.    Income taxes payable
j.    Property taxes payable
k.   Promotional costs
l.    Product warranty liability
m. Vacation pay liability
n.   Contingent liability
o.   Commitment
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1.   For each of the following statements, identify the type of current liability, contingency, or commitment to which it gives rise or with which it is most closely associated:
1.   The board of directors declares a dividend.
2.   A company signs a note due in 60 days.
3.   A company has a pending lawsuit against it.
4.   A company signs a contract to lease a building for five years.
5.   A company arranges for a line of credit.
6.   A company agrees to pay insurance costs for employees.
7.   A portion of a mortgage on a building is due this year.
8.   A company agrees to replace parts of a product if they fail.
9.   A company has trade payables.
10.   A company operates in a state that has a sales tax.
11.   A company puts discount coupons in the newspaper.
12.   A company earns a profit that is taxable.
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13.   A company owns buildings that are subject to property taxes.
14.   An employee earns one day off for each month worked.
2.    aCCounting ConneCtion ▶ Of the items listed from a to o, which ones would you not expect to see listed on the balance sheet with a dollar amount? Of those items that would be listed on the balance sheet with a dollar amount, which ones would you consider to involve the most judgment or discretion on the part of management?
Ans-----------wer----------- 1-----------. T-----------he -----------boa-----------rd -----------of -----------dir-----------ect-----------ors----------- de-----------cla-----------res----------- a -----------div-----------ide-----------nd.-----------...-----------...-----------...-----------...-----------...-----------...-----------...-----------...-----------...-----------...-----------...-----------...-----------...-----------...-----------...-----------...-----------Div-----------ide-----------nd -----------pay-----------abl-----------e 2-----------. A----------- co-----------mpa-----------ny -----------sig-----------ns -----------a n-----------ote----------- du-----------e i-----------n