Question 1

As the Discount on Notes Payable account is reduced:

Accepted Answer

A) a credit is made to the Interest Expense account 
B) the market value of the note is also reduced 
C) the carrying value of the note is increased 
D) the face rate of interest is increased 
A) a credit is made to the Interest Expense account 
B) the market value of the note is also reduced 
C) the carrying value of the note is increased 
D) the face rate of interest is increased

Question 2

The face value of a noninterest-bearing note less the discount on notes payable is called the ________ of the note.

Accepted Answer

A) contra value 
B) market value 
C) interest value 
D) carrying value 
A) contra value 
B) market value 
C) interest value 
D) carrying value

Question 3

How does the effect on the balance sheet of retiring bonds early compare to the effect of having bonds converted?

Accepted Answer

In both cases,all the bond-related accou

Question 4

Bonds payable have a face amount of $1,000,000 and a discount of $10,000.The face interest rate is 9 percent and the effective interest rate is 10 percent.If the annual interest payment is due today,what amount of interest expense should be recorded?

Accepted Answer

A) $100,000 
B) $ 99,000 
C) $ 90,000 
D) $ 89,100 
A) $100,000 
B) $ 99,000 
C) $ 90,000 
D) $ 89,100

Question 5

Noncash assets given to a corporation in exchange for stock would be recorded at:

Accepted Answer

A) their book value when owned directly by the stockholder 
B) cost less accumulated depreciation 
C) fair market value 
D) depreciable cost 
A) their book value when owned directly by the stockholder 
B) cost less accumulated depreciation 
C) fair market value 
D) depreciable cost

Question 6

A capital lease is a form of:

Accepted Answer

A) lump sum note 
B) installment note 
C) none are correct 
D) periodic payment and lump sum note 
A) lump sum note 
B) installment note 
C) none are correct 
D) periodic payment and lump sum note

Question 7

Where in the balance sheet is preferred stock usually reported?

Accepted Answer

A) long-term liabilities 
B) stockholders' equity 
C) contra stockholders' equity 
D) After long-term liabilities but before stockholders' equity 
A) long-term liabilities 
B) stockholders' equity 
C) contra stockholders' equity 
D) After long-term liabilities but before stockholders' equity

Question 8

Enco Dynamics purchased a tract of land from Spectrum Associates on July 1,2010,by issuing a 5-year noninterest-bearing note with a face value of $150,000.Enco has a June 30 fiscal year end and normally pays a 12% rate of interest on similar notes payable balances.Prepare the journal entry to record the acquisition of the land and any other journal entries required relative to the note in the fiscal years ended June 30,2011 and 2012.Show how the note would appear on Enco's June 30,2011 balance sheet.

Accepted Answer

$150,000 x 0.5674 (PV of $1,n=

Question 9

A common stock dividend results in a decrease in:

Accepted Answer

A) assets 
B) common stock 
C) retained earnings 
D) both assets and retained earnings 
A) assets 
B) common stock 
C) retained earnings 
D) both assets and retained earnings

Question 10

The premium on Notes Payable account is a(n):

Accepted Answer

A) adjunct liability account 
B) contra liability account 
C) contributed liability account 
D) equity account 
A) adjunct liability account 
B) contra liability account 
C) contributed liability account 
D) equity account

Question 11

Treasury stock is shown in a company's financial statements as a(n):

Accepted Answer

A) intangible asset 
B) contra equity 
C) current asset 
D) contra asset 
A) intangible asset 
B) contra equity 
C) current asset 
D) contra asset

Question 12

Which of the following would not appear in the stockholders' equity section of the balance sheet?

Accepted Answer

A) gain on sale of treasury stock 
B) additional paid-in capital 
C) retained earnings 
D) treasury stock 
A) gain on sale of treasury stock 
B) additional paid-in capital 
C) retained earnings 
D) treasury stock

Question 13

Quality Corporation has 500,000 shares of $1 par value common stock authorized and 200,000 shares issued and outstanding.Land worth $100,000 received in exchange for 10,000 shares of common stock of the corporation would do all the following except:

Accepted Answer

A) increase the number of shares of common stock issued and outstanding to 210,000 shares 
B) increase the total in the common stock account by $10,000 
C) increase paid in capital in excess of par by $90,000 
D) increase Retained Earnings by $100,000 
A) increase the number of shares of common stock issued and outstanding to 210,000 shares 
B) increase the total in the common stock account by $10,000 
C) increase paid in capital in excess of par by $90,000 
D) increase Retained Earnings by $100,000

Question 14

Under which of the following situations would a firm repurchasing bonds in the secondary market report a loss?

Accepted Answer

A) the current market rate of interest is greater than the market rate when the bonds were issued 
B) the current market rate of interest is greater than the stated rate on the bonds 
C) the current market price of the bonds is greater than carrying value of the bonds 
D) the current market price of the bonds is greater than face value of the bonds 
A) the current market rate of interest is greater than the market rate when the bonds were issued 
B) the current market rate of interest is greater than the stated rate on the bonds 
C) the current market price of the bonds is greater than carrying value of the bonds 
D) the current market price of the bonds is greater than face value of the bonds

Question 15

Each payment on a periodic payment note payable includes:

Accepted Answer

A) interest only 
B) principal only 
C) interest and discount 
D) interest and principal 
A) interest only 
B) principal only 
C) interest and discount 
D) interest and principal

Question 16

The journal entry to record payments made on an operating lease would include a:

Accepted Answer

A) debit to Rent Expense 
B) credit to the asset leased 
C) debit to Interest Expense 
D) credit to Lease Payment Obligation 
A) debit to Rent Expense 
B) credit to the asset leased 
C) debit to Interest Expense 
D) credit to Lease Payment Obligation

Question 17

A Deficit in Retained Earnings can be created by all of the following except.

Accepted Answer

A) Net losses exceeding net income 
B) Paying more in dividends than earnings generated 
C) Receiving less than the par value when stock is issued 
D) All of the above can create a deficit 
A) Net losses exceeding net income 
B) Paying more in dividends than earnings generated 
C) Receiving less than the par value when stock is issued 
D) All of the above can create a deficit

Question 18

Match between columns
                        Premises: Paid-in-Capital from Treasury Stock
Interest Expense
Treasury Stock
Preferred Stock
Paid-in-Capital in Excess of Par
Discount on Notes Payable
Dividend Payable
Premium on Notes Payable
Common Stock
Notes Payable

Accepted Answer

The Answer of Reduction of liability and Income Statement and is...

Question 19

The final cash payment of the face value of a noninterest-bearing note would appear on the statement of cash flows in the:

Accepted Answer

A) operating activities section 
B) investing activities section 
C) financing activities section 
D) operating and financing activities sections 
A) operating activities section 
B) investing activities section 
C) financing activities section 
D) operating and financing activities sections

Question 20

The balance due on a 5-year installment note due in 3 years would appear on the balance sheet in the:

Accepted Answer

A) other liabilities section 
B) current liabilities section 
C) long-term liabilities section 
D) current and long-term liabilities sections 
A) other liabilities section 
B) current liabilities section 
C) long-term liabilities section 
D) current and long-term liabilities sections

As the Discount on Notes Payable account is reduced:

The face value of a noninterest-bearing note less the discount on notes payable is called the ________ of the note.

How does the effect on the balance sheet of retiring bonds early compare to the effect of having bonds converted?

Bonds payable have a face amount of $1,000,000 and a discount of $10,000.The face interest rate is 9 percent and the effective interest rate is 10 percent.If the annual interest payment is due today,what amount of interest expense should be recorded?

Noncash assets given to a corporation in exchange for stock would be recorded at:

A capital lease is a form of:

Where in the balance sheet is preferred stock usually reported?

A common stock dividend results in a decrease in:

The premium on Notes Payable account is a(n):

Treasury stock is shown in a company's financial statements as a(n):

Which of the following would not appear in the stockholders' equity section of the balance sheet?

Quality Corporation has 500,000 shares of $1 par value common stock authorized and 200,000 shares issued and outstanding.Land worth $100,000 received in exchange for 10,000 shares of common stock of the corporation would do all the following except:

Under which of the following situations would a firm repurchasing bonds in the secondary market report a loss?

Each payment on a periodic payment note payable includes:

The journal entry to record payments made on an operating lease would include a:

A Deficit in Retained Earnings can be created by all of the following except.

The final cash payment of the face value of a noninterest-bearing note would appear on the statement of cash flows in the:

The balance due on a 5-year installment note due in 3 years would appear on the balance sheet in the:

Accounting and Business

Business Processes and Accounting Information

Operating Processes: Planning and Control

Short-Term Decision Making

Strategic Planning Regarding Operating Processes

Planning, The Balanced Scorecard, and Budgeting

Accounting Information Systems

Purchasinghuman Resourcespayment Process: Recording and Evaluating Expenditure Process Activities

Recording and Evaluating Conversion Process Activities

Recording and Evaluating Revenue Process Activities

Time Value of Money

Planning Investments: Capital Budgeting

Planning Equity Financing

Planning Debt Financing

Recording and Evaluating Capital Resource Process Activities: Investing

Company Performance: Profitability

Company Performance: Owners Equity and Financial Position

Company Performance: Cash Flows

Company Performance: Comprehensive Evaluation

Filters

Exam 15: Recording and Evaluating Capital Resource Process Activities: Financing

As the Discount on Notes Payable account is reduced:

The face value of a noninterest-bearing note less the discount on notes payable is called the ________ of the note.

How does the effect on the balance sheet of retiring bonds early compare to the effect of having bonds converted?

Bonds payable have a face amount of $1,000,000 and a discount of $10,000.The face interest rate is 9 percent and the effective interest rate is 10 percent.If the annual interest payment is due today,what amount of interest expense should be recorded?

Noncash assets given to a corporation in exchange for stock would be recorded at:

A capital lease is a form of:

Where in the balance sheet is preferred stock usually reported?

A common stock dividend results in a decrease in:

The premium on Notes Payable account is a(n):

Treasury stock is shown in a company's financial statements as a(n):

Which of the following would not appear in the stockholders' equity section of the balance sheet?

Quality Corporation has 500,000 shares of $1 par value common stock authorized and 200,000 shares issued and outstanding.Land worth $100,000 received in exchange for 10,000 shares of common stock of the corporation would do all the following except:

Under which of the following situations would a firm repurchasing bonds in the secondary market report a loss?

Each payment on a periodic payment note payable includes:

The journal entry to record payments made on an operating lease would include a:

A Deficit in Retained Earnings can be created by all of the following except.

The final cash payment of the face value of a noninterest-bearing note would appear on the statement of cash flows in the:

The balance due on a 5-year installment note due in 3 years would appear on the balance sheet in the:

Accounting and Business

Business Processes and Accounting Information

Operating Processes: Planning and Control

Short-Term Decision Making

Strategic Planning Regarding Operating Processes

Planning, The Balanced Scorecard, and Budgeting

Accounting Information Systems

Purchasinghuman Resourcespayment Process: Recording and Evaluating Expenditure Process Activities

Recording and Evaluating Conversion Process Activities

Recording and Evaluating Revenue Process Activities

Time Value of Money

Planning Investments: Capital Budgeting

Planning Equity Financing

Planning Debt Financing

Recording and Evaluating Capital Resource Process Activities: Investing

Company Performance: Profitability

Company Performance: Owners Equity and Financial Position

Company Performance: Cash Flows

Company Performance: Comprehensive Evaluation

Filters