Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

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 3

Which of the following statements is true?

Accepted Answer

A) With instalment payments on a non-current note payable, the principal portion decreases each period. 
B) With instalment payments on a non-current note payable, the interest portion decreases each period. 
C) With instalment payments on a non-current note payable, the interest portion does not change each period. 
D) With instalment payments on a non-current note payable, the interest portion increases each period. 
A) With instalment payments on a non-current note payable, the principal portion decreases each period. 
B) With instalment payments on a non-current note payable, the interest portion decreases each period. 
C) With instalment payments on a non-current note payable, the interest portion does not change each period. 
D) With instalment payments on a non-current note payable, the interest portion increases each period.

Question 4

Long-term notes payable can only have floating interest rates.

Accepted Answer

A) True 
 B)False

Question 5

$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 6

Under IFRS, contingent liabilities should be recorded in the accounts if there is a remote possibility that the contingency will occur.

Accepted Answer

A) True 
 B)False

Question 7

The entry to record interest expense on a bank loan payable is a

Accepted Answer

A) debit to interest expense and credit to note payable. 
B) debit to note payable and credit to interest income. 
C) debit to interest payable and credit to interest income. 
D) debit to interest expense and credit to interest payable. 
A) debit to interest expense and credit to note payable. 
B) debit to note payable and credit to interest income. 
C) debit to interest payable and credit to interest income. 
D) debit to interest expense and credit to interest payable.

Question 8

$2 million, 6%, 10-year bonds are issued when the market rate is 8%.Interest will be paid quarterly.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) 4%. 
B) 8%. 
C) 6%. 
D) 2%. 
A) 4%. 
B) 8%. 
C) 6%. 
D) 2%.

Question 9

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

Accepted Answer

A) $11,500 
B) $15,083 
C) $17,250 
D) $3,583 
A) $11,500 
B) $15,083 
C) $17,250 
D) $3,583

Question 10

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

Accepted Answer

A) debit to CPP Payable of $1,330. 
B) debit to CPP Expense of $1,330. 
C) credit to Employee Benefits Expense of $1,330. 
D) credit to CPP Payable of $1,330. 
A) debit to CPP Payable of $1,330. 
B) debit to CPP Expense of $1,330. 
C) credit to Employee Benefits Expense of $1,330. 
D) credit to CPP Payable of $1,330.

Question 11

Which of the following statements is true?

Accepted Answer

A) The carrying amount of bonds issued at a discount will initially be higher than the face value. 
B) The carrying amount of a bond is its face value less any unamortized premium or plus any unamortized discount. 
C) The carrying amount of a bond is its face value plus any unamortized premium or less any unamortized discount. 
D) The carrying amount of bonds issued at a premium will initially be lower than the face value. 
A) The carrying amount of bonds issued at a discount will initially be higher than the face value. 
B) The carrying amount of a bond is its face value less any unamortized premium or plus any unamortized discount. 
C) The carrying amount of a bond is its face value plus any unamortized premium or less any unamortized discount. 
D) The carrying amount of bonds issued at a premium will initially be lower than the face value.

Question 12

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 13

A bond with a face value of $100,000 and a quoted price of 102.25 would have a selling price of

Accepted Answer

A) $ 97,800. 
B) $100,000. 
C) $102,250. 
D) $122,250. 
A) $ 97,800. 
B) $100,000. 
C) $102,250. 
D) $122,250.

Question 14

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 15

The times interest earned ratio is calculated by dividing

Accepted Answer

A) net income by interest expense. 
B) net income plus income tax expense by interest expense. 
C) net income plus interest expense by interest expense. 
D) net income plus interest expense plus income tax expense by interest expense. 
A) net income by interest expense. 
B) net income plus income tax expense by interest expense. 
C) net income plus interest expense by interest expense. 
D) net income plus interest expense plus income tax expense by interest expense.

Question 16

Deferred revenue is a financial liability.

Accepted Answer

A) True 
 B)False

Question 17

How much is the discount or premium on the bond?

Accepted Answer

A) $575,000 premium 
B) $72,226 premium 
C) $502,747 discount 
D) $72,226 discount 
A) $575,000 premium 
B) $72,226 premium 
C) $502,747 discount 
D) $72,226 discount

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Liquidity ratios measure a company's

Accepted Answer

A) operating cycle. 
B) revenue-producing ability. 
C) short-term debt-paying ability. 
D) long-range solvency. 
A) operating cycle. 
B) revenue-producing ability. 
C) short-term debt-paying ability. 
D) long-range solvency.

Question 20

For bond amortization, private companies reporting under ASPE

Accepted Answer

A) must use the effective-interest method. 
B) are not allowed to use the effective-interest method. 
C) may use any amortization method they wish, as long as the results do not differ materially from the effective-interest method. 
D) may use any amortization method they wish, regardless of the results. 
A) must use the effective-interest method. 
B) are not allowed to use the effective-interest method. 
C) may use any amortization method they wish, as long as the results do not differ materially from the effective-interest method. 
D) may use any amortization method they wish, regardless of the results.

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

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

Which of the following statements is true?

Long-term notes payable can only have floating interest rates.

$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

Under IFRS, contingent liabilities should be recorded in the accounts if there is a remote possibility that the contingency will occur.

The entry to record interest expense on a bank loan payable is a

$2 million, 6%, 10-year bonds are issued when the market rate is 8%.Interest will be paid quarterly.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

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

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

Which of the following statements is true?

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.

A bond with a face value of $100,000 and a quoted price of 102.25 would have a selling price of

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

The times interest earned ratio is calculated by dividing

Deferred revenue is a financial liability.

How much is the discount or premium on the bond?

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

Liquidity ratios measure a company's

For bond amortization, private companies reporting under ASPE

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

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

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

Which of the following statements is true?

Long-term notes payable can only have floating interest rates.

$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

Under IFRS, contingent liabilities should be recorded in the accounts if there is a remote possibility that the contingency will occur.

The entry to record interest expense on a bank loan payable is a

$2 million, 6%, 10-year bonds are issued when the market rate is 8%.Interest will be paid quarterly.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

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

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

Which of the following statements is true?

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.

A bond with a face value of $100,000 and a quoted price of 102.25 would have a selling price of

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

The times interest earned ratio is calculated by dividing

Deferred revenue is a financial liability.

How much is the discount or premium on the bond?

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

Liquidity ratios measure a company's

For bond amortization, private companies reporting under ASPE

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