Sample content Week 3- E-Text Assignment ACC/400 Week 3- E-Text Assignment Financial Accounting: Tools for Business Decision Making, 4th edition Chapter 10: Questions 1, 7, 8, and 19 1. Georgia Lazenby believes a current liability is a debt that can be expected to be paid in one year. Is Georgia correct? Explain. Of course, Georgia Lazenby is right. “…a current liability is a debt that a company reasonably expects to pay (1) from existing current assets or through the creation of other current liabilities, and (2) within one year or the operating cycle, whichever is longer” (Kimmel, Weygandt, & Kieso, 2007, p. 474). 7. a) What are long-term liabilities? Give two examples. As per Kimmel et al. (2007), “Long-term liabilities are obligations that a company expects to pay after one year” (p.480). Long-term debts incorporate bonds as well as long-term notes. b) What is a bond? Bonds are, “A form of interest-bearing notes payable issued by corporations, universitie

1. ACC 400 Week 3 E text Individual Assignments
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Sample content
Week 3- E-Text Assignment
ACC/400
Week 3- E-Text Assignment

2. Financial Accounting: Tools for Business Decision Making, 4th edition
Chapter 10: Questions 1, 7, 8, and 19
1. Georgia Lazenby believes a current liability is a debt that can be expected to be
paid in one year. Is Georgia correct? Explain.
Of course, Georgia Lazenby is right. “…a current liability is a debt that a company
reasonably expects to pay (1) from existing current assets or through the creation
of other current liabilities, and (2) within one year or the operating cycle, whichever
is longer” (Kimmel, Weygandt, & Kieso, 2007, p. 474).
7. a) What are long-term liabilities? Give two examples.
As per Kimmel et al. (2007), “Long-term liabilities are obligations that a company
expects to pay after one year” (p.480). Long-term debts incorporate bonds as well
as long-term notes.
b) What is a bond?
Bonds are, “A form of interest-bearing notes payable issued by corporations,
universities, and governmental entities” (Kimmel, Weygandt, & Kieso, 2007,
p. 505).
8. Contrast these types of bonds:
a) Secured and unsecured.
Secured bonds have particular assets of the issuer pledged as security; while
unsecured bonds are issued against the normal credit rating of the customer.
b) Convertible and callable.
Convertible bonds let bondholders to change them into normal stock at their
preference; while callable bonds let the providing organization to retire at a
mentioned amount of money before maturity.
19. Valentin Zukovsky says that liquidity and solvency are the same thing. Is he
correct? If not, how do they differ?

3. Nope, Valentin Zukovsky isn’t right. Liquidity ratios assess the short-term
capability of an organization to pay for its maturing responsibilities and to satisfy
unpredicted requirements for cash. Solvency ratios assess the capability of an
organization to survive through a prolonged interval of time.
Chapter 10: Brief Exercise: BE10-1
For each obligation, indicate whether it should be classified as a current liability.
a) a note payable for $100,000 due in 2 years
A note payable fo
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