Question 1

Contingent assets may be disclosed in the notes if probable and reasonably estimable.

Accepted Answer

A) True 
 B)False

Question 2

What is meant by the term "current maturities of long-term debt" in the current liabilities section of the balance sheet?

Accepted Answer

The current maturities of long-term debt

Question 3

You friend,Edwin Slotkin,has started a new business,but has recently encountered a slight cash flow problem.He obtains a $1,000 loan at 10% per year from a local bank,but would like to ask you about the terms.The bank has deducted the interest in advance and he wants to know if 10% is his effective interest rate.How would you respond in an email?

Accepted Answer

Hello Edwin:
Good to hear from you!
Rega

Question 4

All of the following statements are true except:

Accepted Answer

A) U.S.standards do not require a classified balance sheet. 
B) IFRS require companies to present classified balance sheets. 
C) Under IFRS,an unclassified balance sheet based on the order of liquidity is acceptable only when it provides more reliable information than a classified one. 
D) U.S.standards require a classified balance sheet with liabilities in order by size or by order of liquidity. 
A) U.S.standards do not require a classified balance sheet. 
B) IFRS require companies to present classified balance sheets. 
C) Under IFRS,an unclassified balance sheet based on the order of liquidity is acceptable only when it provides more reliable information than a classified one. 
D) U.S.standards require a classified balance sheet with liabilities in order by size or by order of liquidity.

Question 5

If a company purchases $3,200 worth of inventory with terms of 2/10,n/30 on March 3 and pays March 12,then the amount paid to the seller would be

Accepted Answer

A) $3,136 
B) $3,150 
C) $3,168 
D) $3,200 
A) $3,136 
B) $3,150 
C) $3,168 
D) $3,200

Question 6

What is the purpose of the current ratio? How does the quick ratio differ from the current ratio?

Accepted Answer

The current ratio is calculated by divid

Question 7

The solution to this problem requires time value of money calculations.Reference to Tables 9-1 through 9-4 in the text is necessary to complete the calculations. To calculate the future value of an amount that is invested at 12%,compounded quarterly,at the end of three years,the interest factor used would be

Accepted Answer

A) 1% for 12 periods 
B) 3% for four periods 
C) 3% for 12 periods 
D) 12% for three periods 
A) 1% for 12 periods 
B) 3% for four periods 
C) 3% for 12 periods 
D) 12% for three periods

Question 8

If a company purchases $3,200 worth of inventory with terms of 2/10,n/30 on March 3 and pays April 2,then the amount paid to the seller would be

Accepted Answer

A) $3,136 
B) $3,150 
C) $3,168 
D) $3,200 
A) $3,136 
B) $3,150 
C) $3,168 
D) $3,200

Question 9

___________________________ include any amount that has been incurred due to the passage of time,but not paid as of the balance sheet date.

Accepted Answer

The answer of ___________________________ include any amount that has been...

Question 10

Working Capital = Current Assets - Current Liabilities
= $400,500* - $174,730
= $225,770

Accepted Answer

2.Current Ratio = Current Assets/Current

Question 11

The solution to this problem requires time value of money calculations.Reference to Tables 9-1 through 9-4 in the text is necessary to complete the calculations. Ashley inherited $140,000 from an aunt.If Ashley decides not to spend her inheritance but to leave the money in her savings account until she retires in 15 years,how much money will she have assuming an annual interest rate of 8%,compounded semiannually?

Accepted Answer

A) $ 308,000 
B) $ 509,880 
C) $ 454,020 
D) $7,851,900 
A) $ 308,000 
B) $ 509,880 
C) $ 454,020 
D) $7,851,900

Question 12

Creek Inc.has a weekly payroll of $8,000 for a 5-day workweek,Monday through Friday.If December 31,the last day of the accounting year,falls on Wednesday,Creek would make an adjusting entry that would

Accepted Answer

A) increase wages expense $4,800. 
B) decrease wages payable $4,800. 
C) decrease cash $4,800. 
D) increase wages payable $8,000. 
A) increase wages expense $4,800. 
B) decrease wages payable $4,800. 
C) decrease cash $4,800. 
D) increase wages payable $8,000.

Question 13

The present value is the value today of a single amount to be paid or received at a specific date in the future.

Accepted Answer

A) True 
 B)False

Question 14

The solution to this problem requires time value of money calculations.Reference to Tables 9-1 through 9-4 in the text is necessary to complete the calculations. The table factor for the future value of an annuity for 4 annual deposits at 8% is

Accepted Answer

A) the same as for the future value of $1 multiplied by 4. 
B) the reciprocal of the future value of $1 factor for n = 4 and 8%. 
C) the cumulative total of the future value of $1 factors for 4 deposits at 8%. 
D) the same as using the future value of $1 factors at 8% for 3,2,1 and 0 periods. 
A) the same as for the future value of $1 multiplied by 4. 
B) the reciprocal of the future value of $1 factor for n = 4 and 8%. 
C) the cumulative total of the future value of $1 factors for 4 deposits at 8%. 
D) the same as using the future value of $1 factors at 8% for 3,2,1 and 0 periods.

Question 15

On November 1,2014,Chancellor Co.borrowed $80,000 from State Bank and signed a 12%,six-month note payable,all due at maturity.The interest on this loan is stated separately.At December 31,2014,Chancellor Co.'s overall liability for this loan amounts to:

Accepted Answer

A) $84,800 
B) $80,000 
C) $81,600 
D) $83,200 
A) $84,800 
B) $80,000 
C) $81,600 
D) $83,200

Question 16

The solution to this problem requires time value of money calculations.Reference to Tables 9-1 through 9-4 in the text is necessary to complete the calculations. Approximately how many years will it take for a sum invested at 8% with annual compounding to quadruple?

Accepted Answer

A) 9 years 
B) 17 years 
C) 18 years 
D) 81 years 
A) 9 years 
B) 17 years 
C) 18 years 
D) 81 years

Question 17

Beasley Mason Company is a defendant in a lawsuit alleging damages of $3 billion.The litigation is anticipated to continue for several years,but no reasonable estimate can be made at this time regarding ultimate financial responsibility.This situation is an example of:

Accepted Answer

A) An $3 billion expense to be recorded in the income statement during the year of the suit. 
B) A loss contingency that should be disclosed in the notes to Beasley's financial statements. 
C) An estimated liability that must appear in Beasley Mason Company's balance sheet. 
D) None of these.No accrual or disclosure is required in Beasley's financial statements. 
A) An $3 billion expense to be recorded in the income statement during the year of the suit. 
B) A loss contingency that should be disclosed in the notes to Beasley's financial statements. 
C) An estimated liability that must appear in Beasley Mason Company's balance sheet. 
D) None of these.No accrual or disclosure is required in Beasley's financial statements.

Question 18

Using the indirect method,an increase in accounts payable would be shown as a(n)_____________ in the ___________ Activities section of the statement of cash flows.

Accepted Answer

increase o

Question 19

The difference between notes payable and accounts payable is ___________________________________.

Accepted Answer

a formal c

Question 20

In 2014,Stockwell,Inc.sold 1,000 carpets for $50 each.The carpets carry a 2-year warranty for repairs.Stockwell estimates that repair costs will average 2% of the total selling price.What is the amount that would be recorded in the warranty liability account as a result of selling the carpets during 2014?

Accepted Answer

A) $1,000 
B) $ 500 
C) $ 20 
D) No liability should be recorded until the carpets are returned for repairs. 
A) $1,000 
B) $ 500 
C) $ 20 
D) No liability should be recorded until the carpets are returned for repairs.

Contingent assets may be disclosed in the notes if probable and reasonably estimable.

What is meant by the term "current maturities of long-term debt" in the current liabilities section of the balance sheet?

All of the following statements are true except:

If a company purchases $3,200 worth of inventory with terms of 2/10,n/30 on March 3 and pays March 12,then the amount paid to the seller would be

What is the purpose of the current ratio? How does the quick ratio differ from the current ratio?

If a company purchases $3,200 worth of inventory with terms of 2/10,n/30 on March 3 and pays April 2,then the amount paid to the seller would be

___________________________ include any amount that has been incurred due to the passage of time,but not paid as of the balance sheet date.

Working Capital = Current Assets - Current Liabilities = $400,500* - $174,730 = $225,770

Creek Inc.has a weekly payroll of $8,000 for a 5-day workweek,Monday through Friday.If December 31,the last day of the accounting year,falls on Wednesday,Creek would make an adjusting entry that would

The present value is the value today of a single amount to be paid or received at a specific date in the future.

The solution to this problem requires time value of money calculations.Reference to Tables 9-1 through 9-4 in the text is necessary to complete the calculations. The table factor for the future value of an annuity for 4 annual deposits at 8% is

On November 1,2014,Chancellor Co.borrowed $80,000 from State Bank and signed a 12%,six-month note payable,all due at maturity.The interest on this loan is stated separately.At December 31,2014,Chancellor Co.'s overall liability for this loan amounts to:

The solution to this problem requires time value of money calculations.Reference to Tables 9-1 through 9-4 in the text is necessary to complete the calculations. Approximately how many years will it take for a sum invested at 8% with annual compounding to quadruple?

Beasley Mason Company is a defendant in a lawsuit alleging damages of $3 billion.The litigation is anticipated to continue for several years,but no reasonable estimate can be made at this time regarding ultimate financial responsibility.This situation is an example of:

Using the indirect method,an increase in accounts payable would be shown as a(n)___ in the _ Activities section of the statement of cash flows.

The difference between notes payable and accounts payable is ___________________________________.

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, plant, and Equipment, and Intangibles

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

Filters

Exam 9: Current Liabilities, contingencies, and the Time Value of Money

Contingent assets may be disclosed in the notes if probable and reasonably estimable.

What is meant by the term "current maturities of long-term debt" in the current liabilities section of the balance sheet?

All of the following statements are true except:

If a company purchases $3,200 worth of inventory with terms of 2/10,n/30 on March 3 and pays March 12,then the amount paid to the seller would be

What is the purpose of the current ratio? How does the quick ratio differ from the current ratio?

If a company purchases $3,200 worth of inventory with terms of 2/10,n/30 on March 3 and pays April 2,then the amount paid to the seller would be

___________________________ include any amount that has been incurred due to the passage of time,but not paid as of the balance sheet date.

Working Capital = Current Assets - Current Liabilities = $400,500* - $174,730 = $225,770

Creek Inc.has a weekly payroll of $8,000 for a 5-day workweek,Monday through Friday.If December 31,the last day of the accounting year,falls on Wednesday,Creek would make an adjusting entry that would

The present value is the value today of a single amount to be paid or received at a specific date in the future.

The solution to this problem requires time value of money calculations.Reference to Tables 9-1 through 9-4 in the text is necessary to complete the calculations. The table factor for the future value of an annuity for 4 annual deposits at 8% is

On November 1,2014,Chancellor Co.borrowed $80,000 from State Bank and signed a 12%,six-month note payable,all due at maturity.The interest on this loan is stated separately.At December 31,2014,Chancellor Co.'s overall liability for this loan amounts to:

The solution to this problem requires time value of money calculations.Reference to Tables 9-1 through 9-4 in the text is necessary to complete the calculations. Approximately how many years will it take for a sum invested at 8% with annual compounding to quadruple?

Beasley Mason Company is a defendant in a lawsuit alleging damages of $3 billion.The litigation is anticipated to continue for several years,but no reasonable estimate can be made at this time regarding ultimate financial responsibility.This situation is an example of:

Using the indirect method,an increase in accounts payable would be shown as a(n)_____________ in the ___________ Activities section of the statement of cash flows.

The difference between notes payable and accounts payable is ___________________________________.

Accounting As a Form of Communication

Financial Statements and the Annual Report

Processing Accounting Information

Income Measurement and Accrual Accounting

Inventories and Cost of Goods Sold

Cash and Internal Control

Receivables and Investments

Operating Assets: Property, plant, and Equipment, and Intangibles

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

Filters

Using the indirect method,an increase in accounts payable would be shown as a(n)___ in the _ Activities section of the statement of cash flows.