Question 1

A customer paid a total of $8,960 for a purchase, including 13% HST (Harmonized Sales Tax).How much was the HST?

Accepted Answer

A) $8,960 
B) $8,000 
C) $1,075 
D) $1,031 
A) $8,960 
B) $8,000 
C) $1,075 
D) $1,031 D

Question 2

The carrying amount of a bond not issued at face value will always move

Accepted Answer

A) towards the face value. 
B) away from the face value. 
C) upwards. 
D) downwards. 
A) towards the face value. 
B) away from the face value. 
C) upwards. 
D) downwards. A

Question 3

Harmonized Sales Tax (HST) collected by a retailer are expenses

Accepted Answer

A) of the retailer. 
B) of the customers. 
C) of the government. 
D) that are not recognized by the retailer until they are submitted to the government. 
A) of the retailer. 
B) of the customers. 
C) of the government. 
D) that are not recognized by the retailer until they are submitted to the government. B

Question 4

When a long-term note payable with a fixed interest rate has fixed principal payments, it means that

Accepted Answer

A) the periodic payment amount is fixed. 
B) the periodic payment increases over time. 
C) the periodic payment decreases over time. 
D) no conclusion can be made on the periodic payment. 
A) the periodic payment amount is fixed. 
B) the periodic payment increases over time. 
C) the periodic payment decreases over time. 
D) no conclusion can be made on the periodic payment.

Question 5

Long term notes may have

Accepted Answer

A)  fixed rates of interest only. 
B)  floating interest rates only. 
C)  no interest rates. 
D)  fixed or floating interest rates. 
A)  fixed rates of interest only. 
B)  floating interest rates only. 
C)  no interest rates. 
D)  fixed or floating interest rates.

Question 6

If a company's fiscal year is the same as the calendar year used for property tax purposes, there should be no prepaid property tax on its year-end financial statements but there may be a property tax liability.

Accepted Answer

A) True 
 B)False

Question 7

All long-term notes payable must be secured.

Accepted Answer

A) True 
 B)False

Question 8

Since a portion of the principal is repaid each month, the outstanding balance will increase each month.

Accepted Answer

A) True 
 B)False

Question 9

For bond amortization, private companies reporting under ASPE

Accepted Answer

A) must use the effective-interest method. 
B) are not allowed to use the effective-interest method. 
C) may use any amortization method they wish, as long as the results do not differ materially from the effective-interest method. 
D) may use any amortization method they wish, regardless of the results. 
A) must use the effective-interest method. 
B) are not allowed to use the effective-interest method. 
C) may use any amortization method they wish, as long as the results do not differ materially from the effective-interest method. 
D) may use any amortization method they wish, regardless of the results.

Question 10

A high liquidity ratio generally indicates that a company has a greater ability to meet its current obligations.

Accepted Answer

A) True 
 B)False

Question 11

Last year, Mocha's Coffee Shop Inc.'s income statement reported the following: profit, $227,500; interest expense, $45,000; and income tax expense, $78,475.The company's times interest earned ratio is

Accepted Answer

A) 7.8 times. 
B) 6.2 times. 
C) 5.8 times. 
D) 4.5 times. 
A) 7.8 times. 
B) 6.2 times. 
C) 5.8 times. 
D) 4.5 times.

Question 12

What is the total interest cost over the life of the bonds?

Accepted Answer

A) $127,500 
B) $34,471 
C) $ 255,000 
D) $161,971 
A) $127,500 
B) $34,471 
C) $ 255,000 
D) $161,971

Question 13

Instalments can be paid

Accepted Answer

A)  monthly. 
B)  quarterly. 
C)  semi annually. 
D)  all of the above. 
A)  monthly. 
B)  quarterly. 
C)  semi annually. 
D)  all of the above.

Question 14

On March 1, Brutto Corp.issues a 3 year, 5%, $60,000 note payable.The terms of the note include monthly blended principal and interest payments of $1,799.The entry to record the first instalment payment will include a

Accepted Answer

A) debit to Notes Payable of $1,799. 
B) debit to Cash of $1,799. 
C) credit to Interest Expense of $3,000. 
D) debit to Interest Expense of $250. 
A) debit to Notes Payable of $1,799. 
B) debit to Cash of $1,799. 
C) credit to Interest Expense of $3,000. 
D) debit to Interest Expense of $250.

Question 15

Account for current liabilities.

Accepted Answer

A current liability is a debt that will

Question 16

A financial liability is a

Accepted Answer

A) contractual obligation to receive cash in the future. 
B) contractual obligation to pay cash in the future. 
C) contractual obligation to issue common shares in the future. 
D) contractual obligation to issue a mortgage payable. 
A) contractual obligation to receive cash in the future. 
B) contractual obligation to pay cash in the future. 
C) contractual obligation to issue common shares in the future. 
D) contractual obligation to issue a mortgage payable.

Question 17

To the nearest dollar, how much bond interest expense is recorded on the first interest date?

Accepted Answer

A) $12,750 
B) $15,621 
C) $17,000 
D) $2,871 
A) $12,750 
B) $15,621 
C) $17,000 
D) $2,871

Question 18

Instalment notes with fixed principal payment are repayable in equal periodic amounts which include interest.

Accepted Answer

A) True 
 B)False

Question 19

On March 1, Brutto Corp.issues a 3 year 5%, $60,000 note payable.The terms of the note include monthly blended principal and interest payments of $1,799.The entry to record the second instalment payment will include a

Accepted Answer

A) debit to Notes Payable of $1,555. 
B) debit to Cash of $1,799. 
C) debit to Interest Expense of $250. 
D) credit to Interest Expense of $244. 
A) debit to Notes Payable of $1,555. 
B) debit to Cash of $1,799. 
C) debit to Interest Expense of $250. 
D) credit to Interest Expense of $244.

Question 20

All transactions between bondholders and other investors must be recorded by the issuing corporation.

Accepted Answer

A) True 
 B)False

A customer paid a total of $8,960 for a purchase, including 13% HST (Harmonized Sales Tax).How much was the HST?

The carrying amount of a bond not issued at face value will always move

Harmonized Sales Tax (HST) collected by a retailer are expenses

When a long-term note payable with a fixed interest rate has fixed principal payments, it means that

Long term notes may have

If a company's fiscal year is the same as the calendar year used for property tax purposes, there should be no prepaid property tax on its year-end financial statements but there may be a property tax liability.

All long-term notes payable must be secured.

Since a portion of the principal is repaid each month, the outstanding balance will increase each month.

For bond amortization, private companies reporting under ASPE

A high liquidity ratio generally indicates that a company has a greater ability to meet its current obligations.

Last year, Mocha's Coffee Shop Inc.'s income statement reported the following: profit, $227,500; interest expense, $45,000; and income tax expense, $78,475.The company's times interest earned ratio is

What is the total interest cost over the life of the bonds?

Instalments can be paid

On March 1, Brutto Corp.issues a 3 year, 5%, $60,000 note payable.The terms of the note include monthly blended principal and interest payments of $1,799.The entry to record the first instalment payment will include a

Account for current liabilities.

A financial liability is a

To the nearest dollar, how much bond interest expense is recorded on the first interest date?

Instalment notes with fixed principal payment are repayable in equal periodic amounts which include interest.

On March 1, Brutto Corp.issues a 3 year 5%, $60,000 note payable.The terms of the note include monthly blended principal and interest payments of $1,799.The entry to record the second instalment payment will include a

All transactions between bondholders and other investors must be recorded by the issuing corporation.

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Filters

Exam 10: Reporting and Analyzing Long-Lived Assets

A customer paid a total of $8,960 for a purchase, including 13% HST (Harmonized Sales Tax).How much was the HST?

The carrying amount of a bond not issued at face value will always move

Harmonized Sales Tax (HST) collected by a retailer are expenses

When a long-term note payable with a fixed interest rate has fixed principal payments, it means that

Long term notes may have

If a company's fiscal year is the same as the calendar year used for property tax purposes, there should be no prepaid property tax on its year-end financial statements but there may be a property tax liability.

All long-term notes payable must be secured.

Since a portion of the principal is repaid each month, the outstanding balance will increase each month.

For bond amortization, private companies reporting under ASPE

A high liquidity ratio generally indicates that a company has a greater ability to meet its current obligations.

Last year, Mocha's Coffee Shop Inc.'s income statement reported the following: profit, $227,500; interest expense, $45,000; and income tax expense, $78,475.The company's times interest earned ratio is

What is the total interest cost over the life of the bonds?

Instalments can be paid

On March 1, Brutto Corp.issues a 3 year, 5%, $60,000 note payable.The terms of the note include monthly blended principal and interest payments of $1,799.The entry to record the first instalment payment will include a

Account for current liabilities.

A financial liability is a

To the nearest dollar, how much bond interest expense is recorded on the first interest date?

Instalment notes with fixed principal payment are repayable in equal periodic amounts which include interest.

On March 1, Brutto Corp.issues a 3 year 5%, $60,000 note payable.The terms of the note include monthly blended principal and interest payments of $1,799.The entry to record the second instalment payment will include a

All transactions between bondholders and other investors must be recorded by the issuing corporation.

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Filters