Question 1

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. D

Question 2

Use the following information to answer questions 
The following totals for the month of April were taken from the payroll register of Sandhu Corp.  
-Assuming Sandhu Corp is also required to remit 140% of the employees' EI withholdings as their share of employee benefits, the journal entry to record the accrual of the employer's portion of EI would include a

Accepted Answer

A) credit to EI Payable of $486. 
B) debit to EI Expense of $347. 
C) credit to EI Payable of $347. 
D) debit to EI Payable of $486. 
A) credit to EI Payable of $486. 
B) debit to EI Expense of $347. 
C) credit to EI Payable of $347. 
D) debit to EI Payable of $486. A

Question 3

One thousand bonds, with a face value of $1,000 each, are sold at 104. The entry to record the issue is

Accepted Answer

C

Question 4

Payroll liabilities include the employer's share of CPP contributions and EI premiums.

Accepted Answer

A) True 
 B)False

Question 5

A bond with a face value of $100,000 and a quoted price of 96.50 would have a selling price of

Accepted Answer

A) $103,359. 
B) $100,000. 
C) $96,500. 
D) $90,650. 
A) $103,359. 
B) $100,000. 
C) $96,500. 
D) $90,650.

Question 6

If any portion of a non-current liability is to be paid in the next year, the entire debt should be classified as a current liability.

Accepted Answer

A) True 
 B)False

Question 7

Contingent liabilities should be recorded in the accounts if there is a remote possibility that the contingency will actually occur.

Accepted Answer

A) True 
 B)False

Question 8

With fixed principal payments on a long-term note payable, the interest portion does not change each period.

Accepted Answer

A) True 
 B)False

Question 9

A financial liability means there is a contractual obligation to pay cash in the future.

Accepted Answer

A) True 
 B)False

Question 10

$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 11

Dream Design Inc. received its annual property tax bill for $16,800 in January. It was paid when due on March 31. Dream Design's year end is Dec 31. The Dec 31 balances should be

Accepted Answer

A) $4,200 for Prepaid Property Tax, $12,600 for Property Tax Expense. 
B) $4,200 for Prepaid Property Tax , $4,200 for Property Tax Payable. 
C) $0 for Prepaid Property Tax, $0 for Property Tax Payable. 
D) $1,400 for Prepaid Property Tax, $15,400 for Property Tax Expense. 
A) $4,200 for Prepaid Property Tax, $12,600 for Property Tax Expense. 
B) $4,200 for Prepaid Property Tax , $4,200 for Property Tax Payable. 
C) $0 for Prepaid Property Tax, $0 for Property Tax Payable. 
D) $1,400 for Prepaid Property Tax, $15,400 for Property Tax Expense.

Question 12

The total interest charged on a 5%, $300,000 four-month bank loan payable would be

Accepted Answer

A) $15,000. 
B) $ 5,000. 
C) $4,500. 
D) $1,250. 
A) $15,000. 
B) $ 5,000. 
C) $4,500. 
D) $1,250.

Question 13

To the nearest dollar, how much bond interest expense will be recorded on the second interest payment date?

Accepted Answer

A) $5,955 
B) $6,467 
C) $6,850 
D) $8,000 
A) $5,955 
B) $6,467 
C) $6,850 
D) $8,000

Question 14

A current liability is a debt that can reasonably be expected to be paid

Accepted Answer

A) within one year. 
B) between 6 months and 18 months. 
C) out of currently recognized revenues. 
D) out of cash currently on hand. 
A) within one year. 
B) between 6 months and 18 months. 
C) out of currently recognized revenues. 
D) out of cash currently on hand.

Question 15

$8 million, 6%, 10-year bonds are issued at less than face value. Interest will be paid semi-annually. When calculating the market price of the bond, the present value of

Accepted Answer

A) $480,000 received for 10 periods must be calculated. 
B) $240,000 received for 10 periods must be calculated. 
C) $240,000 received for 20 periods must be calculated. 
D) $480,000 received for 20 periods must be calculated. 
A) $480,000 received for 10 periods must be calculated. 
B) $240,000 received for 10 periods must be calculated. 
C) $240,000 received for 20 periods must be calculated. 
D) $480,000 received for 20 periods must be calculated.

Question 16

If bonds are issued at a premium, the carrying amount of the bonds will be greater than the face amount of the bonds for all periods prior to the bond maturity date.

Accepted Answer

A) True 
 B)False

Question 17

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 18

Beta Corp redeems $200,000 (face value) of its bonds at 99. All entries relating to the bonds have been posted up to date, and the bonds' carrying amount at this time is $204,600. The entry to record the redemption will include a

Accepted Answer

A) debit to Cash of $198,000. 
B) debit to Bonds Payable of $200,000. 
C) debit to Bonds Payable of $204,600. 
D) debit to Gain on Redemption of $6,600. 
A) debit to Cash of $198,000. 
B) debit to Bonds Payable of $200,000. 
C) debit to Bonds Payable of $204,600. 
D) debit to Gain on Redemption of $6,600.

Question 19

Liabilities are classified on the statement of financial position as current or

Accepted Answer

A) deferred. 
B) unearned. 
C) non-current. 
D) accrued. 
A) deferred. 
B) unearned. 
C) non-current. 
D) accrued.

Question 20

Most notes and bank loans are not interest bearing.

Accepted Answer

A) True 
 B)False

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

One thousand bonds, with a face value of $1,000 each, are sold at 104. The entry to record the issue is

Payroll liabilities include the employer's share of CPP contributions and EI premiums.

A bond with a face value of $100,000 and a quoted price of 96.50 would have a selling price of

If any portion of a non-current liability is to be paid in the next year, the entire debt should be classified as a current liability.

Contingent liabilities should be recorded in the accounts if there is a remote possibility that the contingency will actually occur.

With fixed principal payments on a long-term note payable, the interest portion does not change each period.

A financial liability means there is a contractual obligation to pay cash in the future.

$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

Dream Design Inc. received its annual property tax bill for $16,800 in January. It was paid when due on March 31. Dream Design's year end is Dec 31. The Dec 31 balances should be

The total interest charged on a 5%, $300,000 four-month bank loan payable would be

To the nearest dollar, how much bond interest expense will be recorded on the second interest payment date?

A current liability is a debt that can reasonably be expected to be paid

$8 million, 6%, 10-year bonds are issued at less than face value. Interest will be paid semi-annually. When calculating the market price of the bond, the present value of

If bonds are issued at a premium, the carrying amount of the bonds will be greater than the face amount of the bonds for all periods prior to the bond maturity date.

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.

Beta Corp redeems $200,000 (face value) of its bonds at 99. All entries relating to the bonds have been posted up to date, and the bonds' carrying amount at this time is $204,600. The entry to record the redemption will include a

Liabilities are classified on the statement of financial position as current or

Most notes and bank loans are not interest bearing.

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

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Exam 10: Reporting and Analyzing Liabilities

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

One thousand bonds, with a face value of $1,000 each, are sold at 104. The entry to record the issue is

Payroll liabilities include the employer's share of CPP contributions and EI premiums.

A bond with a face value of $100,000 and a quoted price of 96.50 would have a selling price of

If any portion of a non-current liability is to be paid in the next year, the entire debt should be classified as a current liability.

Contingent liabilities should be recorded in the accounts if there is a remote possibility that the contingency will actually occur.

With fixed principal payments on a long-term note payable, the interest portion does not change each period.

A financial liability means there is a contractual obligation to pay cash in the future.

$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

Dream Design Inc. received its annual property tax bill for $16,800 in January. It was paid when due on March 31. Dream Design's year end is Dec 31. The Dec 31 balances should be

The total interest charged on a 5%, $300,000 four-month bank loan payable would be

To the nearest dollar, how much bond interest expense will be recorded on the second interest payment date?

A current liability is a debt that can reasonably be expected to be paid

$8 million, 6%, 10-year bonds are issued at less than face value. Interest will be paid semi-annually. When calculating the market price of the bond, the present value of

If bonds are issued at a premium, the carrying amount of the bonds will be greater than the face amount of the bonds for all periods prior to the bond maturity date.

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.

Beta Corp redeems $200,000 (face value) of its bonds at 99. All entries relating to the bonds have been posted up to date, and the bonds' carrying amount at this time is $204,600. The entry to record the redemption will include a

Liabilities are classified on the statement of financial position as current or

Most notes and bank loans are not interest bearing.

The Purpose and Use of Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations

Reporting and Analyzing Inventory

Internal Control and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Shareholders Equity

Reporting and Analyzing Investments

Statement of Cash Flows

Performance Measurement

Filters