Which of the following statements is incorrect?A A bank providing a loan to the entity is not a related party transaction.An entity should neither accrue nor disclose when it cosigned a mortgage note on the home of its presidentB guaranteeing the indebtedness in the event that the president should default. The entity considers thelikelihood to default to be remote.Post-employment benefit is part of the compensation of key management personnel.An entity is not required to disclose if it has a common director with another entity.

D) An entity needs to disclose if it has a common director with another entity because there might…

Answered: Which of the following statements is…

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter12: Liabilities: Off-balance-sheet Financing, Retirement Benefits, And Income Taxes

Section: Chapter Questions

Problem 3Q

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Which is a valid statement regarding recognition of liabilities? a. A non-interest bearing note is initially recognized at face value. b. A provision should not be recognized for future operating losses. c. For accumulating compensated absences, an entity should recognize the expense and related liability during the period the absences are incurred by the employees. d. The estimated future costs of supplying awards for customer loyalty program shall be recognized as an expense in the period the award credits are availed of by customers.
Do some states allow creditors to engage in deception with the debtor to obtain the collateral if there has been a default? (Yes/No, deception is never allowed to be used by a creditor) Is a secured party allowed to be paid (reimbursed) for the costs of collection before it applies funds collected to the unpaid balance of a loan? (Yes/No collected funds must first be used to - pay off the debt owed to the creditor) If a debtor files for bankruptcy, does that stop any and all collection efforts of a creditor? ______ (Yes to unsecured creditors but no for secured creditors / Yes to all creditors, both secured and unsecured / No, bankruptcy does not affect a creditor's right to collection of an unpaid debt)
The relationship between a banker and its customers are not only fiduciary in nature but contractual as well. Therefore under any contractual terms, there exist terms and conditions, also known as an exclusion clause to protect the maker of the statement. With regards to case law, explain the rules of “incorporating” an exclusion clause in order for it to work.
Please explain in detail. . Unsecured creditors: have rights to be paid amounts owed, but the rights may have to be enforced through the courts face significant risk, and accordingly unsecured credit is very unusual have no rights in the event that the debtor defaults only have the recourse of severing business ties with the defaulting debtor
Which of the following is NOT an example of a contingency? Salaries payable to top management Potential expense related to repair or replace products sold under warranty Note receivable sold with recourse An amount potentially payable to settle a lawsuit All the other alternatives are contingencies
What If the Facts Were Different? Suppose that West Bank’s Deposit Account Agreement had not included “an obligation to Depositor to exercise good faith and ordinary care in connection with each account.” How might the result have been different?
Suppose the bank properly defaults and is under liquidation, can the creditors of the bank touch and receive the assets under the Trust department?
1. Loans that are to be securitized are passed on to ____ _ _ _ _ _ ___. This helps ensure that if the lender goes bankrupt , it does not affect the credit status of the pooled loans . A. the originator B. a special - purpose entity C. the trustee D. a servicer E. the credit enhance
Sell-Soft is the defendant in numerous lawsuits claiming unfair trade practices. Sell- Soft has strong incentives not to disclose these contingent liabilities. However, GAAP requires that companies report their contingent liabilities. Requirements Why would a company prefer not to disclose its contingent liabilities? Describe how a bank could be harmed if a company seeking a loan did not disclose its contingent liabilities. What ethical tightrope must companies walk when they report contingent liabilities?
Which is an incorrect scenario on covenants?a. The issuing firms pursued revenue generating projects to ensure payment of the interest and theprincipal on a timely basis.b. The issuing firm disposes a mortgage on a bond to settle other creditors’ claims to prevent insolvency.c. The issuing firm submitted periodic reports to the trustee bank to fulfill the loan agreement.d. The issuing firm disposed the collateral to settle the agreement with the bondholders.e. B & Df. All of the aboveg. None of the above
40. When an entity breaches an undertaking under a long-term loan agreement on or before the balance sheet date with the effect that the liability becomes payable on demand, (choose the incorrect statement) a. The liability is classified as non-current, even if the lender has agreed, after the balance sheet date and before the authorization of the financial statements for issue, not to demand payment as a consequence of the breach b. The liability is classified as current because, at the balance sheet date, the entity does not have an unconditional right to defer its settlement for at least twelve months after that date. c. The liability is normally classified as current; however, the liability is classified as non-current if the lender agreed by the balance sheet date to provide a period of grace ending at least twelve months after the balance sheet date, within which the entity can rectify the breach and during which the lender cannot demand immediate repayment. d. The…
What are consequences of false declaration in accounting for creditors, investors and government.

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