7. In what sense is deferred income a liability?
8. Name six different classes of contingent liabilities and show how they should be treated: (a) On the balance sheet. (b) On the books.
Chapter XX
1. What is the basis of separation of fixed from current liabilities?
2. From a financial standpoint, what is the purpose of the incurrence of fixed liabilities?
3. Distinguish between a corporation bond and an ordinary mortgage or bond and mortgage.
4. What financial considerations are involved in the determination of the advisability of a bond issue?
5. State fully the methods of accounting for a bond issue.
6. Explain fully the entries necessary to record properly bond interest, including the amortization of premium or discount.
7. How should unissued bonds be treated on the balance sheet?