Question 1

A customer paid a total of $8,960 for a purchase, including 13% HST (Harmonized Sales Tax). How much was the HST?

Accepted Answer

A)  $8,960 
B)  $8,000 
C)  $1,075 
D)  $1,031 
A)  $8,960 
B)  $8,000 
C)  $1,075 
D)  $1,031

Question 2

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 payment of the net payroll would include a

Accepted Answer

A)  debit to Salaries Payable for $17,881. 
B)  debit to Salaries Payable for $15,300. 
C)  debit to Salaries Payable for $21,065. 
D)  credit to Cash for $26,850. 
A)  debit to Salaries Payable for $17,881. 
B)  debit to Salaries Payable for $15,300. 
C)  debit to Salaries Payable for $21,065. 
D)  credit to Cash for $26,850.

Question 3

Which of the following statements is false?

Accepted Answer

A)  Notes payable usually require the borrower to pay interest. 
B)  Notes payable are sometimes used instead of accounts payable. 
C)  Most notes and bank loans are non-interest bearing. 
D)  Notes payable reflect a promise to repay a specified amount of money either at a fixed future date or on demand. 
A)  Notes payable usually require the borrower to pay interest. 
B)  Notes payable are sometimes used instead of accounts payable. 
C)  Most notes and bank loans are non-interest bearing. 
D)  Notes payable reflect a promise to repay a specified amount of money either at a fixed future date or on demand.

Question 4

Account for current liabilities.

Accepted Answer

A current liability is a debt that will

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

On March 1, Brutto Corp. issues a 3 year 5%, $60,000 note payable. The terms of the note include monthly blended principal and interest payments of $1,799. The entry to record the second instalment payment will include a

Accepted Answer

A)  debit to Notes Payable of $1,555. 
B)  debit to Cash of $1,799. 
C)  debit to Interest Expense of $250. 
D)  credit to Interest Expense of $244. 
A)  debit to Notes Payable of $1,555. 
B)  debit to Cash of $1,799. 
C)  debit to Interest Expense of $250. 
D)  credit to Interest Expense of $244.

Question 7

The debt to total assets ratio measures the percentage of the total assets provided by creditors.

Accepted Answer

A) True 
 B)False

Question 8

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 9

With fixed principal loans, principal payments and interest are repayable in

Accepted Answer

A)  equal periodic amounts plus interest. 
B)  varying periodic amounts plus interest. 
C)  equal periodic amounts including interest. 
D)  varying periodic amounts including interest. 
A)  equal periodic amounts plus interest. 
B)  varying periodic amounts plus interest. 
C)  equal periodic amounts including interest. 
D)  varying periodic amounts including interest.

Question 10

Which of the following statements is true?

Accepted Answer

A)  Current liabilities are generally presented on the statement of financial position in order of liquidity, but IFRS allows presentation in reverse order of liquidity as well. 
B)  Current liabilities are listed in order of descending dollar value. 
C)  All companies are prohibited to report current liabilities in reverse order of liquidity. 
D)  Current liabilities are listed in order of ascending dollar value. 
A)  Current liabilities are generally presented on the statement of financial position in order of liquidity, but IFRS allows presentation in reverse order of liquidity as well. 
B)  Current liabilities are listed in order of descending dollar value. 
C)  All companies are prohibited to report current liabilities in reverse order of liquidity. 
D)  Current liabilities are listed in order of ascending dollar value.

Question 11

Property tax payable is classified as a non-current liability because it is related to property, which is a non-current asset.

Accepted Answer

A) True 
 B)False

Question 12

If drawing on an operating line of credit results in a negative cash balance, a current liability known as bank indebtedness results.

Accepted Answer

A) True 
 B)False

Question 13

When bonds are issued at a premium, the total interest cost of the bonds over the life of the bonds is equal to the amount of the

Accepted Answer

A)  interest paid over the life of the bond. 
B)  interest paid over the life of the bond plus the amount of premium amortized. 
C)  interest paid over the life of the bond minus the amount of premium amortized. 
D)  premium. 
A)  interest paid over the life of the bond. 
B)  interest paid over the life of the bond plus the amount of premium amortized. 
C)  interest paid over the life of the bond minus the amount of premium amortized. 
D)  premium.

Question 14

Failure to record a liability will probably

Accepted Answer

A)  result in overstated net income. 
B)  result in overstated total liabilities and shareholders' equity. 
C)  have no effect on net income. 
D)  result in overstated total assets. 
A)  result in overstated net income. 
B)  result in overstated total liabilities and shareholders' equity. 
C)  have no effect on net income. 
D)  result in overstated total assets.

Question 15

To the nearest dollar, what is the carrying amount of the bonds after the first interest payment?

Accepted Answer

A)  $ 506,357 
B)  $ 507,802 
C)  $ 499.191 
D)  $ 575,000 
A)  $ 506,357 
B)  $ 507,802 
C)  $ 499.191 
D)  $ 575,000

Question 16

"Off-balance-sheet financing" refers to a situation where liabilities are recorded in the income statement instead of the statement of financial position.

Accepted Answer

A) True 
 B)False

Question 17

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.

Question 18

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 19

Under IFRS, 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 20

If the market interest rate at the date of a bond issue is greater than the coupon interest rate, the bond will be issued at a premium.

Accepted Answer

A) True 
 B)False

A customer paid a total of $8,960 for a purchase, including 13% HST (Harmonized Sales Tax). How much was the HST?

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 payment of the net payroll would include a

Which of the following statements is false?

Account for current liabilities.

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

On March 1, Brutto Corp. issues a 3 year 5%, $60,000 note payable. The terms of the note include monthly blended principal and interest payments of $1,799. The entry to record the second instalment payment will include a

The debt to total assets ratio measures the percentage of the total assets provided by creditors.

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

With fixed principal loans, principal payments and interest are repayable in

Which of the following statements is true?

Property tax payable is classified as a non-current liability because it is related to property, which is a non-current asset.

If drawing on an operating line of credit results in a negative cash balance, a current liability known as bank indebtedness results.

When bonds are issued at a premium, the total interest cost of the bonds over the life of the bonds is equal to the amount of the

Failure to record a liability will probably

To the nearest dollar, what is the carrying amount of the bonds after the first interest payment?

"Off-balance-sheet financing" refers to a situation where liabilities are recorded in the income statement instead of the statement of financial position.

For bond amortization, private companies reporting under ASPE

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

Under IFRS, 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

If the market interest rate at the date of a bond issue is greater than the coupon interest rate, the bond will be issued at a premium.

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

A customer paid a total of $8,960 for a purchase, including 13% HST (Harmonized Sales Tax). How much was the HST?

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 payment of the net payroll would include a

Which of the following statements is false?

Account for current liabilities.

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

On March 1, Brutto Corp. issues a 3 year 5%, $60,000 note payable. The terms of the note include monthly blended principal and interest payments of $1,799. The entry to record the second instalment payment will include a

The debt to total assets ratio measures the percentage of the total assets provided by creditors.

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

With fixed principal loans, principal payments and interest are repayable in

Which of the following statements is true?

Property tax payable is classified as a non-current liability because it is related to property, which is a non-current asset.

If drawing on an operating line of credit results in a negative cash balance, a current liability known as bank indebtedness results.

When bonds are issued at a premium, the total interest cost of the bonds over the life of the bonds is equal to the amount of the

Failure to record a liability will probably

To the nearest dollar, what is the carrying amount of the bonds after the first interest payment?

"Off-balance-sheet financing" refers to a situation where liabilities are recorded in the income statement instead of the statement of financial position.

For bond amortization, private companies reporting under ASPE

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

Under IFRS, 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

If the market interest rate at the date of a bond issue is greater than the coupon interest rate, the bond will be issued at a premium.

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