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a. A company may exclude a short-term obligation from current
liabilities if the firm intends to refinance the obligation on a long-term
basis.
b. A company may exclude a short-term obligation from current
liabilities if the firm can demonstrate an ability to consummate a
refinancing.
c. A company may exclude a short-term obligation from current
liabilities if it is paid off after the balance sheet date and subsequently
replaced by long-term debt before the balance sheet is issued.
d. None of these.
45. The ability to consummate the refinancing of a short-term
obligation may be demon- strated by
a. actually refinancing the obligation by issuing a long-term
obligation after the date of the balance sheet but before it is issued.
b. entering into a financing agreement that permits the enterprise to
refinance the debt on a long-term basis.
c. actually refinancing the obligation by issuing equity securities
after the date of the balance sheet but before it is issued.
d. all of these.
46.
Which of the following statements is false?
a. 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.
b. Cash dividends should be recorded as a liability when they are
declared by the board of directors.