Question 1

Instalment payments consist of a mix of interest on the unpaid balance of the loan and a reduction of the loan principal.

Accepted Answer

A) True 
 B)False

Question 2

$5 million, 8%, 10-year bonds are issued when the market rate is 6%.Interest will be paid semi-annually.When calculating the issue price of the bond, the interest rate to be used to calculate the present value of the face amount and the present value of the periodic interest payments is

Accepted Answer

A) 8%. 
B) 6%. 
C) 4%. 
D) 3%. 
A) 8%. 
B) 6%. 
C) 4%. 
D) 3%.

Question 3

With blended principal and interest payments, the equal periodic payments result in the interest portion increasing each period.

Accepted Answer

A) True 
 B)False

Question 4

Detailed information such as a list showing the amounts of non current debt that is scheduled to be paid off in each of the next five years should be disclosed in the notes to the financial statements.

Accepted Answer

A) True 
 B)False

Question 5

When a business sells an item and collects Harmonized Sales Tax (HST) on it, a current liability arises.

Accepted Answer

A) True 
 B)False

Question 6

Off-balance sheet financing usually is found in connection with

Accepted Answer

A) finance leases. 
B) operating leases. 
C) both finance and operating leases. 
D) neither finance nor operating leases. 
A) finance leases. 
B) operating leases. 
C) both finance and operating leases. 
D) neither finance nor operating leases.

Question 7

All companies are prohibited to report current liabilities in reverse order of liquidity.

Accepted Answer

A) True 
 B)False

Question 8

Notes payable usually require the borrower to pay interest.

Accepted Answer

A) True 
 B)False

Question 9

Unsecured notes are issued against the general credit of the borrower.

Accepted Answer

A) True 
 B)False

Question 10

Secured notes are also known as mortgages.

Accepted Answer

A) True 
 B)False

Question 11

Failure to record a liability will probably

Accepted Answer

A) result in overstated profit. 
B) result in overstated total liabilities and shareholders' equity. 
C) have no effect on profit. 
D) result in overstated total assets. 
A) result in overstated profit. 
B) result in overstated total liabilities and shareholders' equity. 
C) have no effect on profit. 
D) result in overstated total assets.

Question 12

Blended principal and interest payments are repayable in

Accepted Answer

A)  equal periodic amounts plus interest. 
B)  varying periodic amounts plus interest. 
C)  equal periodic amounts including interest. 
D)  varying periodic amounts including interest. 
A)  equal periodic amounts plus interest. 
B)  varying periodic amounts plus interest. 
C)  equal periodic amounts including interest. 
D)  varying periodic amounts including interest.

Question 13

If bonds are redeemable, they can be retired by the issuer before they mature.

Accepted Answer

A) True 
 B)False

Question 14

The effective-interest method is required for companies reporting under IFRS, but optional for companies using ASPE if other methods do not result in material differences.

Accepted Answer

A) True 
 B)False

Question 15

A non- current liability is an obligation that is expected to be paid within one year.

Accepted Answer

A) True 
 B)False

Question 16

If bonds are issued at a discount, the issuing corporation will pay a principal amount that is less than the face amount of the bonds on the maturity date.

Accepted Answer

A) True 
 B)False

Question 17

The carrying amount of a bond is its face value less any unamortized premium or plus any unamortized discount.

Accepted Answer

A) True 
 B)False

Question 18

Most notes and bank loans are not interest bearing.

Accepted Answer

A) True 
 B)False

Question 19

When bonds are issued at a premium, the total interest cost of the bonds over the life of the bonds is equal to the amount of the

Accepted Answer

A) interest paid over the life of the bond. 
B) interest paid over the life of the bond plus the amount of premium amortized. 
C) interest paid over the life of the bond minus the amount of premium amortized. 
D) premium. 
A) interest paid over the life of the bond. 
B) interest paid over the life of the bond plus the amount of premium amortized. 
C) interest paid over the life of the bond minus the amount of premium amortized. 
D) premium.

Question 20

The classification of a liability as current or non-current is important because it may affect the evaluation of a company's liquidity.

Accepted Answer

A) True 
 B)False

Instalment payments consist of a mix of interest on the unpaid balance of the loan and a reduction of the loan principal.

$5 million, 8%, 10-year bonds are issued when the market rate is 6%.Interest will be paid semi-annually.When calculating the issue price of the bond, the interest rate to be used to calculate the present value of the face amount and the present value of the periodic interest payments is

With blended principal and interest payments, the equal periodic payments result in the interest portion increasing each period.

Detailed information such as a list showing the amounts of non current debt that is scheduled to be paid off in each of the next five years should be disclosed in the notes to the financial statements.

When a business sells an item and collects Harmonized Sales Tax (HST) on it, a current liability arises.

Off-balance sheet financing usually is found in connection with

All companies are prohibited to report current liabilities in reverse order of liquidity.

Notes payable usually require the borrower to pay interest.

Unsecured notes are issued against the general credit of the borrower.

Secured notes are also known as mortgages.

Failure to record a liability will probably

Blended principal and interest payments are repayable in

If bonds are redeemable, they can be retired by the issuer before they mature.

The effective-interest method is required for companies reporting under IFRS, but optional for companies using ASPE if other methods do not result in material differences.

A non- current liability is an obligation that is expected to be paid within one year.

If bonds are issued at a discount, the issuing corporation will pay a principal amount that is less than the face amount of the bonds on the maturity date.

The carrying amount of a bond is its face value less any unamortized premium or plus any unamortized discount.

Most notes and bank loans are not interest bearing.

When bonds are issued at a premium, the total interest cost of the bonds over the life of the bonds is equal to the amount of the

The classification of a liability as current or non-current is important because it may affect the evaluation of a company's liquidity.

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

Instalment payments consist of a mix of interest on the unpaid balance of the loan and a reduction of the loan principal.

$5 million, 8%, 10-year bonds are issued when the market rate is 6%.Interest will be paid semi-annually.When calculating the issue price of the bond, the interest rate to be used to calculate the present value of the face amount and the present value of the periodic interest payments is

With blended principal and interest payments, the equal periodic payments result in the interest portion increasing each period.

Detailed information such as a list showing the amounts of non current debt that is scheduled to be paid off in each of the next five years should be disclosed in the notes to the financial statements.

When a business sells an item and collects Harmonized Sales Tax (HST) on it, a current liability arises.

Off-balance sheet financing usually is found in connection with

All companies are prohibited to report current liabilities in reverse order of liquidity.

Notes payable usually require the borrower to pay interest.

Unsecured notes are issued against the general credit of the borrower.

Secured notes are also known as mortgages.

Failure to record a liability will probably

Blended principal and interest payments are repayable in

If bonds are redeemable, they can be retired by the issuer before they mature.

The effective-interest method is required for companies reporting under IFRS, but optional for companies using ASPE if other methods do not result in material differences.

A non- current liability is an obligation that is expected to be paid within one year.

If bonds are issued at a discount, the issuing corporation will pay a principal amount that is less than the face amount of the bonds on the maturity date.

The carrying amount of a bond is its face value less any unamortized premium or plus any unamortized discount.

Most notes and bank loans are not interest bearing.

When bonds are issued at a premium, the total interest cost of the bonds over the life of the bonds is equal to the amount of the

The classification of a liability as current or non-current is important because it may affect the evaluation of a company's liquidity.

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