1) What are the criteria for classifying an item as a current liability? What are some examples of current liabilities? Why is it important to classify a portion of long-term debt on a yearly basis as a current liability? What is the implication of misclassifying a liability as current or long-term? How can misclassification of current liabilities be used to cover fraud within an organization.

2) What is contingency? Why is disclosure of contingencies important to users of financial statements? Wht are the criteria for recording contingencies? Should companies record liability for threatened litigation? Explain why or why not.

3) What is a bond? What are some features of a bond? How do you value bonds? What factors can affect that value?

4) In your opinion, why are some bonds sold at a discount and others at a premium? How does this affect the accounting for the bonds?

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