Question 1

The interest earned on the principal amount only is referred to as .

Accepted Answer

The answer of The interest earned on the principal amount...

Question 2

The solution to this problem requires time value of money calculations.Reference to Tables 9-1 through 9-4 in the text is necessary to complete the calculations.
Kingston inherited $140,000 from an aunt.If Kingston decides not to spend his inheritance but to leave the money in his savings account until he retires in 15 years, how much money will he have assuming an annual interest rate of 8%, compounded semiannually?

Accepted Answer

A) $ 308,000 
B) $ 509,880 
C) $ 454,020 
D) $7,851,900 
A) $ 308,000 
B) $ 509,880 
C) $ 454,020 
D) $7,851,900

Question 3

To determine whether a lottery winner would prefer to receive the money in a single lump sum immediately or receive an equal amount over a period of years, you would use which type of time value of money calculation?

Accepted Answer

A) The future value of a single amount. 
B) The present value of a single amount. 
C) The future value of an annuity. 
D) The present value of an annuity. 
A) The future value of a single amount. 
B) The present value of a single amount. 
C) The future value of an annuity. 
D) The present value of an annuity.

Question 4

International accounting standards require companies to present classified balance sheets with liabilities classified as either current or long term.

Accepted Answer

A) True 
 B)False

Question 5

A cereal company includes one premium coupon in every cereal box.Upon returning 10 such coupons to the company, a customer will be sent a free cereal bowl.In a recent year, the company sold 200,000 boxes of cereal for $1 a box.It is estimated that 20% of the coupons will be returned.If the cereal bowls cost the company $3 each, what amount of liability for premium redemptions must be recorded by the company?

Accepted Answer

A) $ 6,000 
B) $ 12,000 
C) $ 24,000 
D) $200,000 
A) $ 6,000 
B) $ 12,000 
C) $ 24,000 
D) $200,000

Question 6

Which of the following is an example of a contingent liability?

Accepted Answer

A) A liability for notes payable with interest included in the face amount. 
B) The liability for future warranty repairs on computers sold during the current period. 
C) A lawsuit pending against a restaurant chain for improper preparation of food. 
D) A corporate long-term employment contract with the chief executive officer. 
A) A liability for notes payable with interest included in the face amount. 
B) The liability for future warranty repairs on computers sold during the current period. 
C) A lawsuit pending against a restaurant chain for improper preparation of food. 
D) A corporate long-term employment contract with the chief executive officer.

Question 7

If a bank discounts a note, then the borrower needs to only pay the cash received and not the face value of the note.

Accepted Answer

A) True 
 B)False

Question 8

Contingent assets may be disclosed in the notes if probable and reasonably estimable.

Accepted Answer

A) True 
 B)False

Question 9

Almost all current liabilities appear within the Activities category of the Statement of Cash Flows.

Accepted Answer

The answer of Almost all current liabilities appear within the...

Question 10

A note payable due in two years is a current liability.

Accepted Answer

A) True 
 B)False

Question 11

On November 1, Greenfield Corporation borrowed $55,000 from a bank and signed a 12%, 90-day note payable in the amount of $55,000.If you assume 360 days in year, the November 30 adjusting entry will be:

Accepted Answer

A) Debit Interest Expense $550 and credit Cash $550. 
B) Debit Discount on Notes Payable $1,100 and credit Interest Payable $1,100. 
C) Debit Interest Expense $550 and credit Interest Payable $550. 
D) Debit Interest Expense $550 and credit Notes Payable $550. 
A) Debit Interest Expense $550 and credit Cash $550. 
B) Debit Discount on Notes Payable $1,100 and credit Interest Payable $1,100. 
C) Debit Interest Expense $550 and credit Interest Payable $550. 
D) Debit Interest Expense $550 and credit Notes Payable $550.

Question 12

At December 31, 2014, an amount due on December 31, 2015, would be classified as an) _______________________ liability.

Accepted Answer

The answer of At December 31, 2014, an amount due...

Question 13

A company's weekly payroll amounts to $50,000 and payday for the week is every Friday.Employees work five days per week, Monday through Friday.The appropriate journal entry was recorded at the end of the accounting period, Monday, March 31, 2014.What amount is wages expense for April for the payday, Friday, April, 4, 2014?

Accepted Answer

A) $ -0- 
B) $40,000 
C) $10,000 
D) $50,000 
A) $ -0- 
B) $40,000 
C) $10,000 
D) $50,000

Question 14

Which of the following statements regarding contingencies is true?

Accepted Answer

A) Contingencies that are probable and estimable must be recorded before the outcome of future events. 
B) Contingent assets, if probable and estimable, are treated in much the same way as contingent liabilities. 
C) The accounting principle that determines whether a contingent asset is recorded is that of materiality. 
D) Contingencies that are not estimable should not be disclosed even if probable. 
A) Contingencies that are probable and estimable must be recorded before the outcome of future events. 
B) Contingent assets, if probable and estimable, are treated in much the same way as contingent liabilities. 
C) The accounting principle that determines whether a contingent asset is recorded is that of materiality. 
D) Contingencies that are not estimable should not be disclosed even if probable.

Question 15

Accrued wages is not a current liability.

Accepted Answer

A) True 
 B)False

Question 16

Executive, Inc.has a weekly payroll of $10,000 for a 5-day workweek, Monday through Friday.If December 31, the last day of the accounting year, falls on Thursday, Executive would make an adjusting entry that would

Accepted Answer

A) increase Wages Expense $8,000. 
B) decrease Wages Payable $2,000. 
C) decrease Cash $8,000. 
D) increase Wages Payable $2,000. 
A) increase Wages Expense $8,000. 
B) decrease Wages Payable $2,000. 
C) decrease Cash $8,000. 
D) increase Wages Payable $2,000.

Question 17

An annuity is a series of equal payments made at equal intervals in the future.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements about current liabilities is true?

Accepted Answer

A) Current liabilities are listed in order of decreasing amounts in the current liability section of the balance sheet. 
B) The amount of current liabilities has little implication for a company's liquidity. 
C) The current liability section never contains any portion of long-term liabilities. 
D) The current ratio is defined as current assets divided by current liabilities. 
A) Current liabilities are listed in order of decreasing amounts in the current liability section of the balance sheet. 
B) The amount of current liabilities has little implication for a company's liquidity. 
C) The current liability section never contains any portion of long-term liabilities. 
D) The current ratio is defined as current assets divided by current liabilities.

Question 19

A note payable that is due in six months is a current liability.

Accepted Answer

A) True 
 B)False

Question 20

The solution to this problem requires time value of money calculations.Reference to Tables 9-1 through 9-4 in the text is necessary to complete the calculations.
If interest is compounded annually, the total amount of interest on an $18,000 note payable for 4 years at 10% is

Accepted Answer

A) $5,706 
B) $7,200 
C) $8,352 
D) $8,500 
A) $5,706 
B) $7,200 
C) $8,352 
D) $8,500

The interest earned on the principal amount only is referred to as .

To determine whether a lottery winner would prefer to receive the money in a single lump sum immediately or receive an equal amount over a period of years, you would use which type of time value of money calculation?

International accounting standards require companies to present classified balance sheets with liabilities classified as either current or long term.

Which of the following is an example of a contingent liability?

If a bank discounts a note, then the borrower needs to only pay the cash received and not the face value of the note.

Contingent assets may be disclosed in the notes if probable and reasonably estimable.

Almost all current liabilities appear within the Activities category of the Statement of Cash Flows.

A note payable due in two years is a current liability.

On November 1, Greenfield Corporation borrowed $55,000 from a bank and signed a 12%, 90-day note payable in the amount of $55,000.If you assume 360 days in year, the November 30 adjusting entry will be:

At December 31, 2014, an amount due on December 31, 2015, would be classified as an) _______________________ liability.

Which of the following statements regarding contingencies is true?

Accrued wages is not a current liability.

Executive, Inc.has a weekly payroll of $10,000 for a 5-day workweek, Monday through Friday.If December 31, the last day of the accounting year, falls on Thursday, Executive would make an adjusting entry that would

An annuity is a series of equal payments made at equal intervals in the future.

Which of the following statements about current liabilities is true?

A note payable that is due in six months is a current liability.

The solution to this problem requires time value of money calculations.Reference to Tables 9-1 through 9-4 in the text is necessary to complete the calculations. If interest is compounded annually, the total amount of interest on an $18,000 note payable for 4 years at 10% is

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

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Exam 9: Current Liabilities, Contingencies, and the Time Value of Money

The interest earned on the principal amount only is referred to as .

To determine whether a lottery winner would prefer to receive the money in a single lump sum immediately or receive an equal amount over a period of years, you would use which type of time value of money calculation?

International accounting standards require companies to present classified balance sheets with liabilities classified as either current or long term.

Which of the following is an example of a contingent liability?

If a bank discounts a note, then the borrower needs to only pay the cash received and not the face value of the note.

Contingent assets may be disclosed in the notes if probable and reasonably estimable.

Almost all current liabilities appear within the Activities category of the Statement of Cash Flows.

A note payable due in two years is a current liability.

On November 1, Greenfield Corporation borrowed $55,000 from a bank and signed a 12%, 90-day note payable in the amount of $55,000.If you assume 360 days in year, the November 30 adjusting entry will be:

At December 31, 2014, an amount due on December 31, 2015, would be classified as an) _______________________ liability.

Which of the following statements regarding contingencies is true?

Accrued wages is not a current liability.

Executive, Inc.has a weekly payroll of $10,000 for a 5-day workweek, Monday through Friday.If December 31, the last day of the accounting year, falls on Thursday, Executive would make an adjusting entry that would

An annuity is a series of equal payments made at equal intervals in the future.

Which of the following statements about current liabilities is true?

A note payable that is due in six months is a current liability.

The solution to this problem requires time value of money calculations.Reference to Tables 9-1 through 9-4 in the text is necessary to complete the calculations. If interest is compounded annually, the total amount of interest on an $18,000 note payable for 4 years at 10% is

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, Plant, and Equipment, and Intangibles

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

Filters