Question 1

Provisions are liabilities of uncertain timing or amount, along with some uncertainty as to whether the liability will have to be paid.

Accepted Answer

A) True 
 B)False

Question 2

Amounts available to be drawn in the future from an operating line of credit improve a company's liquidity.

Accepted Answer

A) True 
 B)False

Question 3

The market interest rate is often called the

Accepted Answer

A) stated interest rate. 
B) effective interest rate. 
C) contractual interest rate. 
D) coupon interest rate. 
A) stated interest rate. 
B) effective interest rate. 
C) contractual interest rate. 
D) coupon interest rate.

Question 4

Identify the requirements for the financial statement presentation and analysis of liabilities.In the income statement, interest expense (finance cost) is reported as "other revenues and expenses." In the statement of financial position, current liabilities are usually reported first, followed by non-current liabilities.

Accepted Answer

The answer of Identify the requirements for the financial statement...

Question 5

"Current maturities of non-current debt" refers to the amount of interest on notes payable that must be paid in the current year.

Accepted Answer

A) True 
 B)False

Question 6

One example of a liability that is not a financial liability is

Accepted Answer

A)  notes payable. 
B)  unearned revenue. 
C)  bonds payable. 
D)  financial lease. 
A)  notes payable. 
B)  unearned revenue. 
C)  bonds payable. 
D)  financial lease.

Question 7

Interest expense on a bank loan payable is only recorded at maturity.

Accepted Answer

A) True 
 B)False

Question 8

Property tax payable is classified as a non-current liability because it is related to property, which is a non-current asset.

Accepted Answer

A) True 
 B)False

Question 9

Use the following information to answer questions 
The following totals for the month of April were taken from the payroll register of Yandeau Corp.:
  
-The journal entry to record payment of the net payroll would include a

Accepted Answer

A) debit to Salaries Payable for $12,989. 
B) debit to Salaries Payable for $15,300. 
C) debit to Salaries Payable for $19,500. 
D) credit to Cash for $19,500. 
A) debit to Salaries Payable for $12,989. 
B) debit to Salaries Payable for $15,300. 
C) debit to Salaries Payable for $19,500. 
D) credit to Cash for $19,500.

Question 10

The journal entry to record the issue of bonds at a discount will include a

Accepted Answer

A) debit to Cash for the face amount of the bonds. 
B) debit to Cash for the face amount of the bonds plus the amount of the discount. 
C) debit to Cash for the face amount of the bonds minus the amount of the discount. 
D) credit to Cash for the face amount of the bonds.
Use the information below to answer questions 111-113.
Sail and Sink Inc.issues $425,000 of 6%, 5-year bonds for cash proceeds of $390,529.The market interest rate is 8%.Interest is paid semi-annually. 
A) debit to Cash for the face amount of the bonds. 
B) debit to Cash for the face amount of the bonds plus the amount of the discount. 
C) debit to Cash for the face amount of the bonds minus the amount of the discount. 
D) credit to Cash for the face amount of the bonds.
Use the information below to answer questions 111-113.
Sail and Sink Inc.issues $425,000 of 6%, 5-year bonds for cash proceeds of $390,529.The market interest rate is 8%.Interest is paid semi-annually.

Question 11

Bonds are often traded on an organized exchange, such as the Toronto Stock Exchange (TSX).

Accepted Answer

A) True 
 B)False

Question 12

A long-term note may be secured by a document called a

Accepted Answer

A) premium. 
B) debenture. 
C) bond. 
D) mortgage. 
A) premium. 
B) debenture. 
C) bond. 
D) mortgage.

Question 13

A five-year, 6%, $47,000 note payable is issued on January 1.Terms include fixed annual principal payments of $9,400, plus interest on the outstanding balance.The entry to record the first instalment payment will include a

Accepted Answer

A) debit to Notes Payable of $9,400. 
B) credit to Interest Expense of $2,820. 
C) credit to Notes Payable of $12,220. 
D) debit to Cash of $9,400. 
A) debit to Notes Payable of $9,400. 
B) credit to Interest Expense of $2,820. 
C) credit to Notes Payable of $12,220. 
D) debit to Cash of $9,400.

Question 14

Interest expense on a note payable, with interest due at maturity, is

Accepted Answer

A) always equal to zero. 
B) accrued over the life of the note. 
C) only recorded at the time the note is issued. 
D) only recorded at maturity when the note is paid. 
A) always equal to zero. 
B) accrued over the life of the note. 
C) only recorded at the time the note is issued. 
D) only recorded at maturity when the note is paid.

Question 15

On January 1, 2015, Junction Limited, a calendar-year company, issued $160,000 of notes payable, of which $65,000 is due on January 1 for each of the next four years.The proper statement of financial position presentation on December 31, 2015, is

Accepted Answer

A) Current Liabilities, $160,000. 
B) Non-current Liabilities, $160,000. 
C) Current Liabilities, $65,000; Non-current Liabilities, $95,000. 
D) Current Liabilities, $95,000; Non-current Liabilities, $65,000. 
A) Current Liabilities, $160,000. 
B) Non-current Liabilities, $160,000. 
C) Current Liabilities, $65,000; Non-current Liabilities, $95,000. 
D) Current Liabilities, $95,000; Non-current Liabilities, $65,000.

Question 16

Even though current and non-current debt must be shown separately on the statement of financial position, it is not necessary to prepare a journal entry to recognize this.

Accepted Answer

A) True 
 B)False

Question 17

If drawing on an operating line of credit results in a negative cash balance, a current liability known as bank indebtedness results.

Accepted Answer

A) True 
 B)False

Provisions are liabilities of uncertain timing or amount, along with some uncertainty as to whether the liability will have to be paid.

Amounts available to be drawn in the future from an operating line of credit improve a company's liquidity.

The market interest rate is often called the

"Current maturities of non-current debt" refers to the amount of interest on notes payable that must be paid in the current year.

One example of a liability that is not a financial liability is

Interest expense on a bank loan payable is only recorded at maturity.

Property tax payable is classified as a non-current liability because it is related to property, which is a non-current asset.

Use the following information to answer questions The following totals for the month of April were taken from the payroll register of Yandeau Corp.: -The journal entry to record payment of the net payroll would include a

The journal entry to record the issue of bonds at a discount will include a

Bonds are often traded on an organized exchange, such as the Toronto Stock Exchange (TSX).

A long-term note may be secured by a document called a

A five-year, 6%, $47,000 note payable is issued on January 1.Terms include fixed annual principal payments of $9,400, plus interest on the outstanding balance.The entry to record the first instalment payment will include a

Interest expense on a note payable, with interest due at maturity, is

On January 1, 2015, Junction Limited, a calendar-year company, issued $160,000 of notes payable, of which $65,000 is due on January 1 for each of the next four years.The proper statement of financial position presentation on December 31, 2015, is

Even though current and non-current debt must be shown separately on the statement of financial position, it is not necessary to prepare a journal entry to recognize this.

If drawing on an operating line of credit results in a negative cash balance, a current liability known as bank indebtedness results.

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

Provisions are liabilities of uncertain timing or amount, along with some uncertainty as to whether the liability will have to be paid.

Amounts available to be drawn in the future from an operating line of credit improve a company's liquidity.

The market interest rate is often called the

"Current maturities of non-current debt" refers to the amount of interest on notes payable that must be paid in the current year.

One example of a liability that is not a financial liability is

Interest expense on a bank loan payable is only recorded at maturity.

Property tax payable is classified as a non-current liability because it is related to property, which is a non-current asset.

Use the following information to answer questions The following totals for the month of April were taken from the payroll register of Yandeau Corp.: -The journal entry to record payment of the net payroll would include a

The journal entry to record the issue of bonds at a discount will include a

Bonds are often traded on an organized exchange, such as the Toronto Stock Exchange (TSX).

A long-term note may be secured by a document called a

A five-year, 6%, $47,000 note payable is issued on January 1.Terms include fixed annual principal payments of $9,400, plus interest on the outstanding balance.The entry to record the first instalment payment will include a

Interest expense on a note payable, with interest due at maturity, is

On January 1, 2015, Junction Limited, a calendar-year company, issued $160,000 of notes payable, of which $65,000 is due on January 1 for each of the next four years.The proper statement of financial position presentation on December 31, 2015, is

Even though current and non-current debt must be shown separately on the statement of financial position, it is not necessary to prepare a journal entry to recognize this.

If drawing on an operating line of credit results in a negative cash balance, a current liability known as bank indebtedness results.

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