Question 1

Match the descriptions with their terms:
-The amount paid by the investor on issue of a debenture or unsecured note

Accepted Answer

A)  Non-current liability 
B)  Present value 
C)  Warranty 
D)  Issue price 
E)  Current liability
F) Borrowing costs
G) Contract interest rate
H) Mortgage
I) Quick ratio
J) Provision 
A)  Non-current liability 
B)  Present value 
C)  Warranty 
D)  Issue price 
E)  Current liability
F) Borrowing costs
G) Contract interest rate
H) Mortgage
I) Quick ratio
J) Provision

Question 2

Match the descriptions with their terms:
-Costs of borrowing money

Accepted Answer

A)  Non-current liability 
B)  Present value 
C)  Warranty 
D)  Issue price 
E)  Current liability
F) Borrowing costs
G) Contract interest rate
H) Mortgage
I) Quick ratio
J) Provision 
A)  Non-current liability 
B)  Present value 
C)  Warranty 
D)  Issue price 
E)  Current liability
F) Borrowing costs
G) Contract interest rate
H) Mortgage
I) Quick ratio
J) Provision

Question 3

Ethics: Jake Granville, the president and CEO of Earth Systems Ltd, a waste management company, was recently hospitalised, suffering from exhaustion and a heart ailment. Immediately prior to his hospitalisation, Earth Systems had experienced a sharp decline in its shares price, and trading activity became almost non-existent. The primary reason for this was concern expressed in the media over a new untested waste management system implemented by the company. Mr Granville had been unwilling to submit the procedure to testing before implementation, but he reluctantly agreed to limited tests after the system was operational. No problems have been identified by the tests to date.
The other members of management called a meeting to determine what they should do. Roger Calfrey, the marketing manager, suggested that the company buy back a large number of shares. In that way, investors might notice that activity had picked up, and might decide to buy some more shares. This plan would use up most of the company's available cash, so that there will be no money available for a cash dividend. Earth Systems has paid cash dividends every quarter for over ten years.
Required:
1. Is Mr Calfrey's suggestion ethical? Explain.
2. Is it ethical to discontinue the cash dividend? Explain.

Accepted Answer

1. There is no definite answer as to whe

Question 4

Notes that are secured over some of the issuer's assets are called debentures.

Accepted Answer

A) True 
 B)False

Question 5

Companies may find it attractive to issue debt instead of equity because:

Accepted Answer

A)  interest on debt is tax deductible. 
B)  interest on debt has to be repaid by the shareholders, not the company. 
C)  interest on debt is always a cheaper form of finance than dividends on shares. 
D)  interest on debt is not locked in for repayment. 
A)  interest on debt is tax deductible. 
B)  interest on debt has to be repaid by the shareholders, not the company. 
C)  interest on debt is always a cheaper form of finance than dividends on shares. 
D)  interest on debt is not locked in for repayment.

Question 6

Match (by letter) each of the following as being :
-3 months of revenues received in advance for an annual subscription to a magazine

Accepted Answer

A)  current liability (CL) 
B)  non-current liability (NCL) 
C)  neither (N
A) . 
A)  current liability (CL) 
B)  non-current liability (NCL) 
C)  neither (N
A) .

Question 7

Match the descriptions with their terms:
-An obligation of the supplier of goods and services to the purchased that the product will be functional or that work performed will remain satisfactory for a period after the sale of goods

Accepted Answer

A)  Non-current liability 
B)  Present value 
C)  Warranty 
D)  Issue price 
E)  Current liability
F) Borrowing costs
G) Contract interest rate
H) Mortgage
I) Quick ratio
J) Provision 
A)  Non-current liability 
B)  Present value 
C)  Warranty 
D)  Issue price 
E)  Current liability
F) Borrowing costs
G) Contract interest rate
H) Mortgage
I) Quick ratio
J) Provision

Question 8

Match (by letter) each of the following as being :
-Pay-as-you-go withholding tax payable

Accepted Answer

A)  current liability (CL) 
B)  non-current liability (NCL) 
C)  neither (N
A) . 
A)  current liability (CL) 
B)  non-current liability (NCL) 
C)  neither (N
A) .

Question 9

From a manufacturer's point of view, providing a warranty creates an obligation to repair or replace goods if certain faults arise within the warranty period.

Accepted Answer

A) True 
 B)False

Question 10

A $15,000, 8%, 9-month note payable requires an interest payment of $900 at maturity.

Accepted Answer

A) True 
 B)False

Question 11

Complete the following statements:
-Goods and services tax (GST) collected from customers are a(n) ______________ of the business until they are remitted to the tax office.

Accepted Answer

The answer of Complete the following statements:
-Goods and services tax...

Question 12

Provisions for warranties may only be reported in the liabilities section of a statement of financial position as current liabilities.

Accepted Answer

A) True 
 B)False

Question 13

The quick ratio calculated by a business is also referred to as the:

Accepted Answer

A)  solvency ratio. 
B)  acid test. 
C)  marketable test. 
D)  interest coverage ratio. 
A)  solvency ratio. 
B)  acid test. 
C)  marketable test. 
D)  interest coverage ratio.

Question 14

When recording a mortgage payment made by a borrower, the borrower will:

Accepted Answer

A)  debit cash, and credit interest expense. 
B)  debit mortgage payable, and credit interest expense. 
C)  debit both interest expense and mortgage payable, and credit cash. 
D)  debit cash, and credit both interest expense and mortgage payable. 
A)  debit cash, and credit interest expense. 
B)  debit mortgage payable, and credit interest expense. 
C)  debit both interest expense and mortgage payable, and credit cash. 
D)  debit cash, and credit both interest expense and mortgage payable.

Question 15

Which of the following would not be classified as a current liability?

Accepted Answer

A)  Accrued taxes payable 
B)  Revenue received in advance 
C)  Mortgage 
D)  Notes payable 
A)  Accrued taxes payable 
B)  Revenue received in advance 
C)  Mortgage 
D)  Notes payable

Question 16

Seagull Publications publishes a golf magazine for women. The magazine sells for $5.00 a copy on newsstands. Yearly subscriptions to the magazine cost $50 per year (12 issues). During December 2019, Seagull Publications sells 5,000 copies of the golf magazine at news-stands and receives payment for 6,000 subscriptions for 2020. Financial statements are prepared monthly.
Instructions:
(a) Prepare the December 2019 journal entries to record the newsstand sales and subscriptions received.
(b) Prepare the necessary adjusting entry on 31 January, 2020. The January 2020 issue has been mailed to subscribers.

Accepted Answer

The answer of Seagull Publications publishes a golf magazine for...

Question 17

Obligations to pay for goods or services that have been provided but for which a supplier's invoice has not yet been received are recorded as:

Accepted Answer

A)  debentures. 
B)  accounts payable. 
C)  warranties. 
D)  contingencies. 
A)  debentures. 
B)  accounts payable. 
C)  warranties. 
D)  contingencies.

Question 18

Emerald Ltd has the following payroll deductions for the week ended 31 March: $20,000 medical fund deductions; $18,000 pay-as-you-go withheld tax deductions. What is the journal entry to record the obligation for these deductions?

Accepted Answer

A) 
  
B) 
  
C) 
  
D) 
  
A) 
  
B) 
  
C) 
  
D)

Question 19

Match (by letter) each of the following as being :
-20-year Mortgage

Accepted Answer

A)  current liability (CL) 
B)  non-current liability (NCL) 
C)  neither (N
A) . 
A)  current liability (CL) 
B)  non-current liability (NCL) 
C)  neither (N
A) .

Question 20

On May 31, Pearl Ltd borrows $20,000 from their bank by signing a 2 month, 12%, interest-bearing note.
Instructions: Prepare the necessary entries below associated with the note payable on the books of Pearl Ltd.
(a) Prepare the entry on June 1 when the note was issued.
(b) Prepare any adjusting entries necessary on 30 June in order to prepare the monthly financial statements. Assume no other interest accrual entries have been made.
(c) Prepare the entry to record payment of the note at maturity.

Accepted Answer

The answer of On May 31, Pearl Ltd borrows $20,000...

Match the descriptions with their terms: -The amount paid by the investor on issue of a debenture or unsecured note

Match the descriptions with their terms: -Costs of borrowing money

Notes that are secured over some of the issuer's assets are called debentures.

Companies may find it attractive to issue debt instead of equity because:

Match (by letter) each of the following as being : -3 months of revenues received in advance for an annual subscription to a magazine

Match the descriptions with their terms: -An obligation of the supplier of goods and services to the purchased that the product will be functional or that work performed will remain satisfactory for a period after the sale of goods

Match (by letter) each of the following as being : -Pay-as-you-go withholding tax payable

From a manufacturer's point of view, providing a warranty creates an obligation to repair or replace goods if certain faults arise within the warranty period.

A $15,000, 8%, 9-month note payable requires an interest payment of $900 at maturity.

Complete the following statements: -Goods and services tax (GST) collected from customers are a(n) ______________ of the business until they are remitted to the tax office.

Provisions for warranties may only be reported in the liabilities section of a statement of financial position as current liabilities.

The quick ratio calculated by a business is also referred to as the:

When recording a mortgage payment made by a borrower, the borrower will:

Which of the following would not be classified as a current liability?

Obligations to pay for goods or services that have been provided but for which a supplier's invoice has not yet been received are recorded as:

Emerald Ltd has the following payroll deductions for the week ended 31 March: $20,000 medical fund deductions; $18,000 pay-as-you-go withheld tax deductions. What is the journal entry to record the obligation for these deductions?

Match (by letter) each of the following as being : -20-year Mortgage

An Introduction to Accounting

The Recording Process

Accrual Accounting Concepts

Inventories

Reporting and Analysing Inventory

Accounting Information Systems

Reporting and Analysing Cash and Receivables

Reporting and Analysing Non-Current Assets

Reporting and Analysing Equity

Statement of Cash Flows

Financial Statement Analysis and Decision Making

Analysing and Integrating Gaap

Technology Concepts

Introduction to Management Accounting

Cost Accounting Systems

Costvolumeprofit Relationships

Budgeting

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Exam 9: Reporting and Analysing Liabilities

Match the descriptions with their terms: -The amount paid by the investor on issue of a debenture or unsecured note

Match the descriptions with their terms: -Costs of borrowing money

Notes that are secured over some of the issuer's assets are called debentures.

Companies may find it attractive to issue debt instead of equity because:

Match (by letter) each of the following as being : -3 months of revenues received in advance for an annual subscription to a magazine

Match the descriptions with their terms: -An obligation of the supplier of goods and services to the purchased that the product will be functional or that work performed will remain satisfactory for a period after the sale of goods

Match (by letter) each of the following as being : -Pay-as-you-go withholding tax payable

From a manufacturer's point of view, providing a warranty creates an obligation to repair or replace goods if certain faults arise within the warranty period.

A $15,000, 8%, 9-month note payable requires an interest payment of $900 at maturity.

Complete the following statements: -Goods and services tax (GST) collected from customers are a(n) ______________ of the business until they are remitted to the tax office.

Provisions for warranties may only be reported in the liabilities section of a statement of financial position as current liabilities.

The quick ratio calculated by a business is also referred to as the:

When recording a mortgage payment made by a borrower, the borrower will:

Which of the following would not be classified as a current liability?

Obligations to pay for goods or services that have been provided but for which a supplier's invoice has not yet been received are recorded as:

Emerald Ltd has the following payroll deductions for the week ended 31 March: $20,000 medical fund deductions; $18,000 pay-as-you-go withheld tax deductions. What is the journal entry to record the obligation for these deductions?

Match (by letter) each of the following as being : -20-year Mortgage

An Introduction to Accounting

The Recording Process

Accrual Accounting Concepts

Inventories

Reporting and Analysing Inventory

Accounting Information Systems

Reporting and Analysing Cash and Receivables

Reporting and Analysing Non-Current Assets

Reporting and Analysing Equity

Statement of Cash Flows

Financial Statement Analysis and Decision Making

Analysing and Integrating Gaap

Technology Concepts

Introduction to Management Accounting

Cost Accounting Systems

Costvolumeprofit Relationships

Budgeting

Filters