Question 1

The calculation of interest to be paid each interest period for a bond payable is not influenced by any premium or discount upon issue.

Accepted Answer

A) True 
 B)False

Question 2

The present value of a bond is the

Accepted Answer

A) maturity value of the bond. 
B) amount at which it sells in the marketplace. 
C) future value of the principal. 
D) future value of the interest payments. 
A) maturity value of the bond. 
B) amount at which it sells in the marketplace. 
C) future value of the principal. 
D) future value of the interest payments.

Question 3

A bond with a face value of $100,000 and a quoted price of 104.75 would have a selling price of

Accepted Answer

A) $147,500. 
B) $104,750. 
C) $100,000. 
D) $95,466. 
A) $147,500. 
B) $104,750. 
C) $100,000. 
D) $95,466.

Question 4

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 5

Use the following information to answer questions 
The following totals for the month of April were taken from the payroll register of Sandhu Corp.  
-The journal entry to record the monthly payroll on April 30 would include a

Accepted Answer

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

Question 6

Selling bonds at a premium

Accepted Answer

A) causes the total cost of borrowing to be higher than the bond interest paid. 
B) causes the total cost of borrowing to be lower than the bond interest paid. 
C) raises the effective interest rate above the coupon interest rate. 
D) increases the amount of cash paid for interest. 
A) causes the total cost of borrowing to be higher than the bond interest paid. 
B) causes the total cost of borrowing to be lower than the bond interest paid. 
C) raises the effective interest rate above the coupon interest rate. 
D) increases the amount of cash paid for interest.

Question 7

Use the following information to answer questions 
The following totals for the month of April were taken from the payroll register of Sandhu Corp.  
-The journal entry to record the accrual of the employee's portion of Canada Pension Plan (CPP) would include a

Accepted Answer

A) credit to CPP Payable of $965. 
B) debit to CPP Expense of $965. 
C) credit to Employee Benefits Expense of $965. 
D) debit to CPP Payable of $965. 
A) credit to CPP Payable of $965. 
B) debit to CPP Expense of $965. 
C) credit to Employee Benefits Expense of $965. 
D) debit to CPP Payable of $965.

Question 8

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 9

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

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) $6,000 
B) $5,488 
C) $4,000 
D) $3,658 
A) $6,000 
B) $5,488 
C) $4,000 
D) $3,658

Question 11

Bonds that are subject to retirement at a stated dollar amount prior to maturity at the option of the issuer are called

Accepted Answer

A) early retirement bonds. 
B) redeemable bonds. 
C) options. 
D) debentures. 
A) early retirement bonds. 
B) redeemable bonds. 
C) options. 
D) debentures.

Question 12

Amortization of a bond premium decreases interest expense recorded by the issuer.

Accepted Answer

A) True 
 B)False

Question 13

Use the following information for questions 
On January 1 of this year, Saratoga Bank agrees to lend Tilbury Corp. $150,000. Tilbury Corp. signs a $150,000, 4%, 9-month loan. Interest is due at maturity.
-What entry will Tilbury Corp make to repay the loan on September 30, assuming no further adjusting entries have been made since June 30?

Accepted Answer

The answer of Use the following information for questions 
On...

Question 14

Use the following information for questions 
On October 1, 2012, Carla's Carpet Service Limited borrows $80,000 from Regional Bank by signing a 3-month, $80,000, 4% bank loan. Interest is due the first of each month.
-The entry by Carla's Carpet Service to record payment of the loan and accrued interest on January 1, 2013 is

Accepted Answer

The answer of Use the following information for questions 
On...

Question 15

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 16

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. 
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.

Question 17

As blended principal and interest payments are made on a long-term loan,

Accepted Answer

A) the interest portion increases and the principal portion decreases. 
B) the interest and principal portions remain the same. 
C) the interest portion decreases and the principal portion increases. 
D) both the interest portion and the principal portion decrease. 
A) the interest portion increases and the principal portion decreases. 
B) the interest and principal portions remain the same. 
C) the interest portion decreases and the principal portion increases. 
D) both the interest portion and the principal portion decrease.

Question 18

A contingent liability may materialize in the future because of something that happened in the past.

Accepted Answer

A) True 
 B)False

Question 19

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.

Question 20

Notes payable are sometimes used instead of accounts payable.

Accepted Answer

A) True 
 B)False

The calculation of interest to be paid each interest period for a bond payable is not influenced by any premium or discount upon issue.

The present value of a bond is the

A bond with a face value of $100,000 and a quoted price of 104.75 would have a selling price of

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.

Use the following information to answer questions The following totals for the month of April were taken from the payroll register of Sandhu Corp. -The journal entry to record the monthly payroll on April 30 would include a

Selling bonds at a premium

Use the following information to answer questions The following totals for the month of April were taken from the payroll register of Sandhu Corp. -The journal entry to record the accrual of the employee's portion of Canada Pension Plan (CPP) would include a

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

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

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

Bonds that are subject to retirement at a stated dollar amount prior to maturity at the option of the issuer are called

Amortization of a bond premium decreases interest expense recorded by the issuer.

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.

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

As blended principal and interest payments are made on a long-term loan,

A contingent liability may materialize in the future because of something that happened in the past.

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

Notes payable are sometimes used instead of accounts payable.

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

Exam 10: Reporting and Analyzing Liabilities

The calculation of interest to be paid each interest period for a bond payable is not influenced by any premium or discount upon issue.

The present value of a bond is the

A bond with a face value of $100,000 and a quoted price of 104.75 would have a selling price of

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.

Use the following information to answer questions The following totals for the month of April were taken from the payroll register of Sandhu Corp. -The journal entry to record the monthly payroll on April 30 would include a

Selling bonds at a premium

Use the following information to answer questions The following totals for the month of April were taken from the payroll register of Sandhu Corp. -The journal entry to record the accrual of the employee's portion of Canada Pension Plan (CPP) would include a

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

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

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

Bonds that are subject to retirement at a stated dollar amount prior to maturity at the option of the issuer are called

Amortization of a bond premium decreases interest expense recorded by the issuer.

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.

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

As blended principal and interest payments are made on a long-term loan,

A contingent liability may materialize in the future because of something that happened in the past.

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

Notes payable are sometimes used instead of accounts payable.

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