CFA Practice Question

There are 534 practice questions for this study session.

CFA Practice Question

Which of the following statements about liability is false?
A. Cash dividends should be recorded as a liability when they are declared by the board of directors.
B. Payroll taxes withheld from employees' payroll cheques should never be recorded as a liability since the employer will eventually remit the amounts withheld to the appropriate taxing authority.
C. A company may exclude a short-term obligation from current liabilities if the firm intends to refinance the obligation on a long-term basis and demonstrates an ability to complete the refinancing.
Explanation: The definition of a liability includes payroll taxes since the company is obligated to make the payments to the government at some point in the future, after the expenses are incurred.

User Contributed Comments 2

User Comment
Lamkerst such strong words as ALWAYS, NEVER, NO, etc are suspisious
meeravenk Answered this by process of elimination
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