Question

Question 7 1 pts Examples of current liabilities are 6-month notes payable, salaries payable, and unearned revenue. O True O False Question 8 1 pts Which of the following is true of the work sheet? Assets are extended into the Balance Sheet columns as credits. O Expenses are extended into the Income Statement columnas debits. Liabilities are extended into the Balance Sheet columns as debits. Revenues are extended into the Income Statement columns as debits.

Answer 1

1) true

the liabilities paid within 12 months periods is classified as current liabilities.6 months note payable,salaries payable and enearned revenue are current liabilities.

2) expenses are extended into the income statements columns as debits.

in the income statement revenue will have a credit balance and expense will have debit balance.moreover an increase in expense is always debits the expense account.

3) depreciation expense-machinery

cash,accounts recievable and accounts payable will be closed to the balance sheet at the end of the fiscal year.

depreciation expense for production will be closed to the income statement.

4) short term debt paying ability of a company

current ratio indicates how much times is the current asset of a company to its current liabilities.that how liquid is the current asset of the company to pay its current liabilities.