Question 1: What are the criteria for classifying an item as a current liability?
Question 2: What are some examples of current liabilities?
Question 3: Why is it important to classify a portion of long-term debt on a yearly basis as a current liability?
Question 4: What is the implication of misclassifying a liability as current or long-term?
Question 5: Generally accepted accounting principles (GAAP) require loss contingencies to be accrued in the period the contingency becomes known. However, GAAP specifically disallows booking gain contingencies until the gain is realized. Do you agree or disagree? Why?