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1. Nature of Liabilities Presented below is the current liabilities section of Micro Corporation. Answer the following questions.
(a) What are the essential characteristics that make an item a liability?
(b) How does one distinguish between a current liability and a long-term liability?
(c) What are accrued liabilities? Give three examples of accrued liabilities that Micro might have.
(d) What is the theoretically correct way to value liabilities how are current liabilities usually valued?
(e) Why are notes payable reported first in the current liabilities section?
(f) What might be the items that comprise Micro's liability for "Compensation to employees"?
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