Question 1

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 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.  
-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 3

A $100,000 bond was retired at 97 when the carrying amount of the bond was $102,500. The entry to record the retirement would include a

Accepted Answer

A) gain on bond redemption of $2,500. 
B) loss on bond redemption of $2,500. 
C) loss on bond redemption of $5,500. 
D) gain on bond redemption of $5,500.
Use the information below to answer questions 134-136.
Sun and Surf Inc issues $200,000 of 4%, 5-year bonds for cash proceeds of $182,940. The market interest rate is 6%. Interest is paid semi-annually. 
A) gain on bond redemption of $2,500. 
B) loss on bond redemption of $2,500. 
C) loss on bond redemption of $5,500. 
D) gain on bond redemption of $5,500.
Use the information below to answer questions 134-136.
Sun and Surf Inc issues $200,000 of 4%, 5-year bonds for cash proceeds of $182,940. The market interest rate is 6%. Interest is paid semi-annually.

Question 4

The times interest earned ratio is calculated by dividing net profit by interest expense.

Accepted Answer

A) True 
 B)False

Question 5

The carrying amount of bonds will equal the market price

Accepted Answer

A) at the close of every trading day. 
B) at the end of the fiscal period. 
C) on the date of issue. 
D) every six months on the date interest is paid. 
A) at the close of every trading day. 
B) at the end of the fiscal period. 
C) on the date of issue. 
D) every six months on the date interest is paid.

Question 6

A cash register tape shows cash sales of $2,000 and provincial sales tax (PST) of $120. The journal entry to record this information is

Accepted Answer

The answer of A cash register tape shows cash sales...

Question 7

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 8

Unearned revenues should be classified as "other revenues and gains" on the income statement.

Accepted Answer

A) True 
 B)False

Question 9

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 10

A mortgage payable is often secured by collateral such as a building.

Accepted Answer

A) True 
 B)False

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 retailer that collects GST (goods and services tax) is acting as an agent for the

Accepted Answer

A) wholesaler. 
B) customer. 
C) federal government. 
D) provincial government. 
A) wholesaler. 
B) customer. 
C) federal government. 
D) provincial government.

Question 13

If the market interest rate is 4.5%, a $100,000, 5.6%, 10-year bond that pays interest semi-annually would sell at an amount

Accepted Answer

A) less than face value. 
B) equal to the face value. 
C) greater than face value. 
D) that cannot be determined. 
A) less than face value. 
B) equal to the face value. 
C) greater than face value. 
D) that cannot be determined.

Question 14

If a company can determine a reasonable estimate of an expected loss from a lawsuit and it is probable it will lose the suit, it should

Accepted Answer

A) disclose the basic facts regarding the suit in the notes to its financial statements. 
B) accrue the loss. 
C) neither disclose in the notes nor accrue the loss. 
D) pay the amount estimated. 
A) disclose the basic facts regarding the suit in the notes to its financial statements. 
B) accrue the loss. 
C) neither disclose in the notes nor accrue the loss. 
D) pay the amount estimated.

Question 15

With fixed principal payments on a long-term note payable, the interest portion decreases each period.

Accepted Answer

A) True 
 B)False

Question 16

A $1,000 face value bond with a quoted price of 96 would sell for

Accepted Answer

A) $1,042. 
B) $1.000. 
C) $ 960. 
D) $ 904. 
A) $1,042. 
B) $1.000. 
C) $ 960. 
D) $ 904.

Question 17

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

Accepted Answer

A) $17,060 
B) $20,000 
C) $40,000 
D) $57,060
Use the information below to answer questions 137-140.
Williamson Ltd issues $200,000 of 8%, 5-year bonds when the market interest rate is 6%. Interest is paid semi-annually. 
A) $17,060 
B) $20,000 
C) $40,000 
D) $57,060
Use the information below to answer questions 137-140.
Williamson Ltd issues $200,000 of 8%, 5-year bonds when the market interest rate is 6%. Interest is paid semi-annually.

Question 18

While short-term notes are generally repayable in full at maturity, most long-term notes are repayable in a series of periodic payments called instalments.

Accepted Answer

A) True 
 B)False

Question 19

The amortization of a bond discount results in periodic interest expense

Accepted Answer

A) greater than the constant percentage of the carrying amount of the bonds. 
B) less than the constant percentage of the carrying amount of the bonds. 
C) equal to the constant percentage of the carrying amount of the bonds. 
D) increasing over the term of the bond issue. 
A) greater than the constant percentage of the carrying amount of the bonds. 
B) less than the constant percentage of the carrying amount of the bonds. 
C) equal to the constant percentage of the carrying amount of the bonds. 
D) increasing over the term of the bond issue.

Question 20

A bond premium can be considered to be

Accepted Answer

A) an increase in the borrowing cost. 
B) a reduction in borrowing cost. 
C) unrelated to the borrowing cost. 
D) a contra-liability. 
A) an increase in the borrowing cost. 
B) a reduction in borrowing cost. 
C) unrelated to the borrowing cost. 
D) a contra-liability.

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

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 payment of the net payroll would include a

A $100,000 bond was retired at 97 when the carrying amount of the bond was $102,500. The entry to record the retirement would include a

The times interest earned ratio is calculated by dividing net profit by interest expense.

The carrying amount of bonds will equal the market price

A cash register tape shows cash sales of $2,000 and provincial sales tax (PST) of $120. The journal entry to record this information is

Failure to record a liability will probably

Unearned revenues should be classified as "other revenues and gains" on the income statement.

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

A mortgage payable is often secured by collateral such as a building.

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

A retailer that collects GST (goods and services tax) is acting as an agent for the

If the market interest rate is 4.5%, a $100,000, 5.6%, 10-year bond that pays interest semi-annually would sell at an amount

If a company can determine a reasonable estimate of an expected loss from a lawsuit and it is probable it will lose the suit, it should

With fixed principal payments on a long-term note payable, the interest portion decreases each period.

A $1,000 face value bond with a quoted price of 96 would sell for

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

While short-term notes are generally repayable in full at maturity, most long-term notes are repayable in a series of periodic payments called instalments.

The amortization of a bond discount results in periodic interest expense

A bond premium can be considered to be

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

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

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 payment of the net payroll would include a

A $100,000 bond was retired at 97 when the carrying amount of the bond was $102,500. The entry to record the retirement would include a

The times interest earned ratio is calculated by dividing net profit by interest expense.

The carrying amount of bonds will equal the market price

A cash register tape shows cash sales of $2,000 and provincial sales tax (PST) of $120. The journal entry to record this information is

Failure to record a liability will probably

Unearned revenues should be classified as "other revenues and gains" on the income statement.

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

A mortgage payable is often secured by collateral such as a building.

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

A retailer that collects GST (goods and services tax) is acting as an agent for the

If the market interest rate is 4.5%, a $100,000, 5.6%, 10-year bond that pays interest semi-annually would sell at an amount

If a company can determine a reasonable estimate of an expected loss from a lawsuit and it is probable it will lose the suit, it should

With fixed principal payments on a long-term note payable, the interest portion decreases each period.

A $1,000 face value bond with a quoted price of 96 would sell for

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

While short-term notes are generally repayable in full at maturity, most long-term notes are repayable in a series of periodic payments called instalments.

The amortization of a bond discount results in periodic interest expense

A bond premium can be considered to be

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