True or False

1._____ Dividends in arrears on cumulative preferred stock neednot be recorded as a liability.

2._____All long-term debt maturing within the next year must beclassified as a current liability on the balance sheet.

3._____ A company is a plaintiff in a lawsuit. It should accruethe estimated gain from the judgment if information indicates thatit is virtually certain and the amount can be reasonablyestimated.

4._____The revenue from a service-type warranty that coversseveral years should all be recognized in the period the warrantyis sold.

5._____Under an assurance-type warranty, companies chargewarranty costs only to the period in which they comply with thewarranty.

6._____Prepaid insurance should be included in the numeratorwhen computing the acid-test (quick) ratio.

7._____Current liabilities are usually recorded and reported infinancial statements at their full maturity value.

8._____Debt securities held as an investment include corporatebonds and convertible debt, but not U.S. government securities.

9._____Securities classified as trading securities aresecurities bought and held primarily for sale in the near-term togenerate income on short-term price differences.

10._____Unrealized holding gains and losses are recognized innet income for available-for-sale debt securities.