Question 1

If a bond has a face value of $10,000 and a 6% coupon interest rate, then the semi-annual interest payment will be $600.

Accepted Answer

A) True 
 B)False

Question 2

Current liabilities are generally presented on the statement of financial position in order or liquidity, but IFRS allows presentation in reverse order of liquidity as well.

Accepted Answer

A) True 
 B)False

Question 3

The times interest earned ratio is calculated by dividing

Accepted Answer

A) profit by interest expense. 
B) profit plus income tax expense by interest expense. 
C) profit plus interest expense by interest expense. 
D) profit plus interest expense plus income tax expense by interest expense.

Question 4

A financial liability means there is a contractual obligation to pay cash in the future.

Accepted Answer

A) True 
 B)False

Question 5

If any portion of a non-current liability is to be paid in the next year, the entire debt should be classified as a current liability.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

Interest rates on notes and loans are usually stated as a(n)

Accepted Answer

A) monthly rate. 
B) daily rate. 
C) semi-annual rate. 
D) annual rate.

Question 8

While short-term notes are generally repayable in full at maturity, most long-term notes are repayable in a series of periodic payments called instalments.

Accepted Answer

A) True 
 B)False

Question 9

Liquidity ratios measure a company's long term ability to pay debt.

Accepted Answer

A) True 
 B)False

Question 10

Solvency ratios measure a company's ability to repay current debt.

Accepted Answer

A) True 
 B)False

Question 11

Account for bonds payable (Appendix 10A).

Accepted Answer

The answer of Account for bonds payable (Appendix 10A)....

Question 12

If $150,000 face value bonds are issued at 102.5, the proceeds received will be $102,500.

Accepted Answer

A) True 
 B)False

Question 13

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.

Question 14

A mortgage payable is often secured by collateral such as a building.

Accepted Answer

A) True 
 B)False

Question 15

"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 16

Use the following information for questions 
On October 1, 2015, Mekhi's Golf Service Limited borrows $80,000 from Rigor Bank by signing a 3-month, $80,000, 4% bank loan.Interest is due the first of each month.
-What adjusting entry is required at December 31, 2015?

Accepted Answer

The answer of Use the following information for questions 
On...

Question 17

Roofer's Inc.had an operating line of credit of $100,000 and overdrew its bank balance to result in a negative cash balance of $33,000 at year-end.This would be reported in the statement of financial position as

Accepted Answer

A) a current liability of $33,000. 
B) a non-current liability of $67,000. 
C) a current asset of $67,000. 
D) a current asset of $(33,000).

Question 18

Use the following information for questions 
On January 1 of this year, Gertoni Lenders agrees to lend Ester Corp.$150,000.Ester Corp.signs a $150,000, 6%, 9-month loan.Interest is due at maturity.
-What entry will Ester Corp.make to repay the loan on September 30, assuming no further adjusting entries have been made since June 30?

Accepted Answer

The answer of Use the following information for questions 
On...

Question 19

The times interest earned ratio is calculated by dividing net profit by interest expense.

Accepted Answer

A) True 
 B)False

Question 20

With fixed principal payments on a long-term note payable, the interest portion decreases each period.

Accepted Answer

A) True 
 B)False

Exam 10: Reporting and Analyzing Long-Lived Assets

If a bond has a face value of $10,000 and a 6% coupon interest rate, then the semi-annual interest payment will be $600.

Current liabilities are generally presented on the statement of financial position in order or liquidity, but IFRS allows presentation in reverse order of liquidity as well.

The times interest earned ratio is calculated by dividing

A financial liability means there is a contractual obligation to pay cash in the future.

If any portion of a non-current liability is to be paid in the next year, the entire debt should be classified as a current liability.

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

Interest rates on notes and loans are usually stated as a(n)

While short-term notes are generally repayable in full at maturity, most long-term notes are repayable in a series of periodic payments called instalments.

Liquidity ratios measure a company's long term ability to pay debt.

Solvency ratios measure a company's ability to repay current debt.

Account for bonds payable (Appendix 10A).

If $150,000 face value bonds are issued at 102.5, the proceeds received will be $102,500.

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

A mortgage payable is often secured by collateral such as a building.

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

Use the following information for questions On October 1, 2015, Mekhi's Golf Service Limited borrows $80,000 from Rigor Bank by signing a 3-month, $80,000, 4% bank loan.Interest is due the first of each month. -What adjusting entry is required at December 31, 2015?

Roofer's Inc.had an operating line of credit of $100,000 and overdrew its bank balance to result in a negative cash balance of $33,000 at year-end.This would be reported in the statement of financial position as

The times interest earned ratio is calculated by dividing net profit by interest expense.

With fixed principal payments on a long-term note payable, the interest portion decreases each period.