Question 1

The payment of accounts payable results in a(n)

Accepted Answer

A) decrease in liabilities and a decrease in assets. 
B) decrease in liabilities and an increase in assets. 
C) increase in liabilities and a decrease in owners' equity. 
D) decrease in liabilities and an increase in owners' equity. 
A) decrease in liabilities and a decrease in assets. 
B) decrease in liabilities and an increase in assets. 
C) increase in liabilities and a decrease in owners' equity. 
D) decrease in liabilities and an increase in owners' equity.

Question 2

The ____________________________ of a single sum represents the value today of a single amount to be received or paid at a future time.

Accepted Answer

The answer of The ____________________________ of a single sum represents...

Question 3

Which of the following would appear on the balance sheet as a current liability?

Accepted Answer

A) A loss from an anticipated strike by employees. 
B) Potential damages from possible explosions in a fireworks factory. 
C) Premium offers in cereal boxes. 
D) The possible loss from a lawsuit. 
A) A loss from an anticipated strike by employees. 
B) Potential damages from possible explosions in a fireworks factory. 
C) Premium offers in cereal boxes. 
D) The possible loss from a lawsuit.

Question 4

Which of the following accounts is not classified as a current liability?

Accepted Answer

A) Taxes payable 
B) Note payable,due in three (3)years 
C) Salaries payable 
D) Accounts payable 
A) Taxes payable 
B) Note payable,due in three (3)years 
C) Salaries payable 
D) Accounts payable

Question 5

Accountants need not worry about calculations based upon the concept of the time value of money.

Accepted Answer

A) True 
 B)False

Question 6

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. Ralph wants to save some money so that he can make a down payment of $3,000 on a car when he graduates from college 4 years from now.If he opens a savings account and earns 3% on his money,compounded annually,how much will he have to invest now?

Accepted Answer

A) $2,520 
B) $2,664 
C) $2,910 
D) $3,000 
A) $2,520 
B) $2,664 
C) $2,910 
D) $3,000

Question 7

Which of the following statements is true of liabilities?

Accepted Answer

A) Accounts payable are listed in the current liabilities section in alphabetical order by vendor. 
B) Classification of current liabilities is important because of the liquidity concept. 
C) Current liabilities are listed in order of decreasing amounts in the current liability section of the balance sheet. 
D) The accounting principles followed in the U.S.differ from those of other countries;this is especially true for current liabilities. 
A) Accounts payable are listed in the current liabilities section in alphabetical order by vendor. 
B) Classification of current liabilities is important because of the liquidity concept. 
C) Current liabilities are listed in order of decreasing amounts in the current liability section of the balance sheet. 
D) The accounting principles followed in the U.S.differ from those of other countries;this is especially true for current liabilities.

Question 8

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. Cory and Ginger want to buy an airplane.They find one that will cost $200,000.They must pay 10% down,and can get the balance financed with a 10 year loan at 7% interest and annual payments.What is their annual payment?

Accepted Answer

A) $26,826 
B) $25,626 
C) $24,457 
D) $19,260 
A) $26,826 
B) $25,626 
C) $24,457 
D) $19,260

Question 9

In 2013,Minter Co.sold 150 hot air balloons at $4,000 each.The balloons carry a 5-year warranty for defects.Minter estimates that repair costs will average 4% of the total selling price.The estimated warranty liability at the beginning of the year was $14,000.$20,000 in claims was actually incurred during the year to honor their warranty.What was the warranty expense for 2013?

Accepted Answer

A) $10,000 
B) $18,000 
C) $20,000 
D) $24,000 
A) $10,000 
B) $18,000 
C) $20,000 
D) $24,000

Question 10

In a compound interest problem,if you know the future value,the present value,and the number of periods,then you can solve for the interest rate.

Accepted Answer

A) True 
 B)False

Question 11

Using the future value table,a student found that the future value amount of $1 for 5 years at an annual interest rate of 10% is 1.611.The student also observed that the future value of $1 for 5 years at 10% compounded semiannually is 1.629.This means that

Accepted Answer

A) the more often the compounding,the higher the future value. 
B) the student was looking in the wrong column;the second amount should be 1.611/2. 
C) there was an error in the table. 
D) when interest is compounded semiannually,more money must be deposited to have a desired ending balance. 
A) the more often the compounding,the higher the future value. 
B) the student was looking in the wrong column;the second amount should be 1.611/2. 
C) there was an error in the table. 
D) when interest is compounded semiannually,more money must be deposited to have a desired ending balance.

Question 12

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. If Ying has $5,000 to invest and wants to have $10,000 at the end of 9 years,what compounded interest rate must she get on her money (assume annual compounding)?

Accepted Answer

A) 5% 
B) 6% 
C) 7% 
D) 8% 
A) 5% 
B) 6% 
C) 7% 
D) 8%

Question 13

Compound interest is a repeated calculation of the interest on the principal over certain periods of time.

Accepted Answer

A) True 
 B)False

Question 14

Almost all current liabilities affect the operating category of the statement of cash flows,but one that does not affect cash provided by operating activities is

Accepted Answer

A) accounts payable. 
B) interest payable. 
C) notes payable. 
D) taxes payable. 
A) accounts payable. 
B) interest payable. 
C) notes payable. 
D) taxes payable.

Question 15

International accounting standards require companies to present classified balance sheets with liabilities classified as either current or long term.

Accepted Answer

A) True 
 B)False

Question 16

Mobile Designs,Inc.
Use the selected data from the comparative financial statements for Mobile Designs,Inc.to answer the questions that follow.
Mobile Designs,Inc.
Balance Sheet Accounts
(all accounts have normal balances)
(in millions)
   Refer to the account information for Mobile Designs,Inc.
REQUIRED:
Compute the total current liabilities for the years 2013 and 2012.Calculate the percentage change in the total current liabilities.

Accepted Answer

The current liabilities have increased f

Question 17

If you plan to invest $10,000 and want to determine how much will be accumulated in six years if you earn interest at 7% per year,you would calculate this using the future value of an annuity.

Accepted Answer

A) True 
 B)False

Question 18

The liability for a premium offer estimated to be redeemed is not a current liability.

Accepted Answer

A) True 
 B)False

Question 19

Long-term assets are $5,000,current liabilities are $700,and long-term liabilities are $3,000.If the current ratio is 3 to 1,then current assets are

Accepted Answer

A) $9,000 
B) $6,900 
C) $4,300 
D) $2,100 
A) $9,000 
B) $6,900 
C) $4,300 
D) $2,100

Question 20

Discount on Notes Payable is treated as a reduction of notes payable on the balance sheet.

Accepted Answer

A) True 
 B)False

The payment of accounts payable results in a(n)

The ____________________________ of a single sum represents the value today of a single amount to be received or paid at a future time.

Which of the following would appear on the balance sheet as a current liability?

Which of the following accounts is not classified as a current liability?

Accountants need not worry about calculations based upon the concept of the time value of money.

Which of the following statements is true of liabilities?

In a compound interest problem,if you know the future value,the present value,and the number of periods,then you can solve for the interest rate.

Using the future value table,a student found that the future value amount of $1 for 5 years at an annual interest rate of 10% is 1.611.The student also observed that the future value of $1 for 5 years at 10% compounded semiannually is 1.629.This means that

Compound interest is a repeated calculation of the interest on the principal over certain periods of time.

Almost all current liabilities affect the operating category of the statement of cash flows,but one that does not affect cash provided by operating activities is

International accounting standards require companies to present classified balance sheets with liabilities classified as either current or long term.

If you plan to invest $10,000 and want to determine how much will be accumulated in six years if you earn interest at 7% per year,you would calculate this using the future value of an annuity.

The liability for a premium offer estimated to be redeemed is not a current liability.

Long-term assets are $5,000,current liabilities are $700,and long-term liabilities are $3,000.If the current ratio is 3 to 1,then current assets are

Discount on Notes Payable is treated as a reduction of notes payable on the balance sheet.

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

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

The payment of accounts payable results in a(n)

The ____________________________ of a single sum represents the value today of a single amount to be received or paid at a future time.

Which of the following would appear on the balance sheet as a current liability?

Which of the following accounts is not classified as a current liability?

Accountants need not worry about calculations based upon the concept of the time value of money.

Which of the following statements is true of liabilities?

In a compound interest problem,if you know the future value,the present value,and the number of periods,then you can solve for the interest rate.

Using the future value table,a student found that the future value amount of $1 for 5 years at an annual interest rate of 10% is 1.611.The student also observed that the future value of $1 for 5 years at 10% compounded semiannually is 1.629.This means that

Compound interest is a repeated calculation of the interest on the principal over certain periods of time.

Almost all current liabilities affect the operating category of the statement of cash flows,but one that does not affect cash provided by operating activities is

International accounting standards require companies to present classified balance sheets with liabilities classified as either current or long term.

If you plan to invest $10,000 and want to determine how much will be accumulated in six years if you earn interest at 7% per year,you would calculate this using the future value of an annuity.

The liability for a premium offer estimated to be redeemed is not a current liability.

Long-term assets are $5,000,current liabilities are $700,and long-term liabilities are $3,000.If the current ratio is 3 to 1,then current assets are

Discount on Notes Payable is treated as a reduction of notes payable on the balance sheet.

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