Question

[x] Your answer is incorrect. Try again. Which of the following statements is not true about recognition and subsequent accounting for financial liabilities? O They are initially recognized at their fair value. O After acquisition, they continue to be accounted for at fair value. O After acquisition, they are generally accounted for at amortized cost. Short-term liabilities, such as accounts payable, are usually recorded at their maturity value.

Testbank, Question 5 3 Your answer is incorrect. Try again. Regarding zero-interest-bearing notes, O they do not have an interest component. O the debtor receives the future value of the note and pays back the present value. O any interest is never recognized until the note is repaid. O the debtor receives the present value of the note and pays back the future value.
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Solution: Answer: After acquistion, they continue to be accounted for at fair value Explanation: Because, mostly fiancial liabilities are not continued to be valued at fair value. It is recorded with the value per contract. It is standardized. No futher explanation require. Answer: the debtors receives the future value of the note and pays back the present value Explanation: Although there is not any specified coupon rate, but in fact the amount of note is adjusted with the intrerest. Debtor generally receive the future value of the note and payback the Present value. e.g. received note for $50000 against 5 annual installment of $10000

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