Question 1

Cassady, Inc. borrowed $5,000 for 3 months at an APR of 10%. The amount of interest paid on this loan was:

Accepted Answer

A)  $240. 
B)  $120. 
C)  $125. 
D)  $500. 
A)  $240. 
B)  $120. 
C)  $125. 
D)  $500.

Question 2

Which of the following is a true statement regarding interest calculation methods?

Accepted Answer

A)  Interest is calculated on either a straight-basis or a delayed-basis. 
B)  Interest is calculated on either a straight-basis or an undiscounted-basis. 
C)  If a borrower receives a loan on a discount-basis, the APR will be less than the simple interest. 
D)  If a borrower receives a loan on a discount-basis, the APR will be more than the simple interest rate. 
A)  Interest is calculated on either a straight-basis or a delayed-basis. 
B)  Interest is calculated on either a straight-basis or an undiscounted-basis. 
C)  If a borrower receives a loan on a discount-basis, the APR will be less than the simple interest. 
D)  If a borrower receives a loan on a discount-basis, the APR will be more than the simple interest rate.

Question 3

Ariel, Inc., issued $30 million face amount of 9% bonds when market interest rates were 9.30% for bonds of similar risk and other characteristics.
(a.) How much interest will be paid annually on these bonds?
(b.) Will the bonds be issued at a premium or discount? Explain your answer.
(c.) Will the annual interest expense on these bonds be more than, equal to, or less than, the amount of interest paid each year? Explain your answer.

Accepted Answer

(a.) $30,000,000 * .09 = $2,700,000 inte

Question 4

A loan discount is:

Accepted Answer

A)  a loan used to purchase a bond at a discount. 
B)  a discount market interest rate on a loan. 
C)  the same as a bond discount. 
D)  None of these. 
A)  a loan used to purchase a bond at a discount. 
B)  a discount market interest rate on a loan. 
C)  the same as a bond discount. 
D)  None of these.

Question 5

The payment of a current liability will:

Accepted Answer

A)  decrease net income. 
B)  decrease working capital. 
C)  increase working capital. 
D)  not affect working capital. 
A)  decrease net income. 
B)  decrease working capital. 
C)  increase working capital. 
D)  not affect working capital.

Question 6

Which of the following is(are) a true statement(s) pertaining to bonds?

Accepted Answer

A)  Bonds can be sold at a discount, par, or payable. 
B)  Bonds can be sold at a discount, par, or premium. 
C)  The SEC sets the market price of a bond. 
D)  The issuing firm sets the price of a bond. 
A)  Bonds can be sold at a discount, par, or payable. 
B)  Bonds can be sold at a discount, par, or premium. 
C)  The SEC sets the market price of a bond. 
D)  The issuing firm sets the price of a bond.

Question 7

When bonds are issued at a premium:

Accepted Answer

A)  interest expense on the bonds will be less than the interest paid. 
B)  interest expense on the bonds will be more than the interest paid. 
C)  the bonds are sold for less than their face amount. 
D)  the coupon interest rate is less than the market interest rate. 
A)  interest expense on the bonds will be less than the interest paid. 
B)  interest expense on the bonds will be more than the interest paid. 
C)  the bonds are sold for less than their face amount. 
D)  the coupon interest rate is less than the market interest rate.

Cassady, Inc. borrowed $5,000 for 3 months at an APR of 10%. The amount of interest paid on this loan was:

Which of the following is a true statement regarding interest calculation methods?

A loan discount is:

The payment of a current liability will:

Which of the following is(are) a true statement(s) pertaining to bonds?

When bonds are issued at a premium:

Accountingpresent and Past

Financial Statements and Accounting Conceptsprinciples

Fundamental Interpretations Made From Financial Statement Data

The Bookkeeping Process and Transaction Analysis

Accounting for and Presentation of Current Assets

Accounting for and Presentation of Property, Plant and Equipment,and Other Noncurrent Assets

Accounting for and Presentation of Stockholders Equity

The Income Statement and the Statement of Cash Flows

Corporate Governance, Notes to the Financial Statements and Other Disclosures

Financial Statement Analysis

Managerial Accounting and Costvolumeprofit Analysis

Cost Accounting and Reporting

Cost Planning

Cost Control

Costs for Decision Making

Filters

Exam 7: Accounting for and Presentation of Liabilities

Cassady, Inc. borrowed $5,000 for 3 months at an APR of 10%. The amount of interest paid on this loan was:

Which of the following is a true statement regarding interest calculation methods?

A loan discount is:

The payment of a current liability will:

Which of the following is(are) a true statement(s) pertaining to bonds?

When bonds are issued at a premium:

Accountingpresent and Past

Financial Statements and Accounting Conceptsprinciples

Fundamental Interpretations Made From Financial Statement Data

The Bookkeeping Process and Transaction Analysis

Accounting for and Presentation of Current Assets

Accounting for and Presentation of Property, Plant and Equipment,and Other Noncurrent Assets

Accounting for and Presentation of Stockholders Equity

The Income Statement and the Statement of Cash Flows

Corporate Governance, Notes to the Financial Statements and Other Disclosures

Financial Statement Analysis

Managerial Accounting and Costvolumeprofit Analysis

Cost Accounting and Reporting

Cost Planning

Cost Control

Costs for Decision Making

Filters