Which of the following statements is FALSE?
A) Under IFRS, a company may exclude a short-term obligation from current liabilities if, at statement of financial position date, the entity expects to refinance under an existing agreement for at least a year, and the decision is solely at its discretion.
B) Cash dividends should be recorded as a liability when they are declared by the board of directors.
C) Under the cash basis method, warranty costs are charged to expense as they are paid.
D) Federal income taxes withheld from employees' payroll cheques should be recorded as a long-term liability.

Question

Quizplus · Accepted Answer

Federal income taxes withheld from employees' payroll cheques should be recorded as a current liability, not a long-term liability. The taxes withheld are required to be remitted to the government on a regular basis, usually monthly or quarterly, and therefore represent a current obligation.

Which of the Following Statements Is FALSE