Question 1

Unsecured bonds that are issued against the general credit of the borrower are called ________________ bonds.

Accepted Answer

The answer of Unsecured bonds that are issued against the...

Question 2

All bonds will always fall into which one of the following pairs of categories?

Accepted Answer

A)  Secured or unsecured 
B)  Mortgage or sinking fund 
C)  Debenture or unsecured 
D)  Callable or convertible 
A)  Secured or unsecured 
B)  Mortgage or sinking fund 
C)  Debenture or unsecured 
D)  Callable or convertible

Question 3

Bonds that may be exchanged for common stock at the option of the bondholders are called

Accepted Answer

A)  options. 
B)  stock bonds. 
C)  convertible bonds. 
D)  callable bonds. 
A)  options. 
B)  stock bonds. 
C)  convertible bonds. 
D)  callable bonds.

Question 4

A $600,000 bond was retired at 98 when the carrying value of the bond was $590,000. The entry to record the retirement would include a

Accepted Answer

A)  gain on bond redemption of $10,000. 
B)  loss on bond redemption of $10,000. 
C)  loss on bond redemption of $2,000. 
D)  gain on bond redemption of $2,000. 
A)  gain on bond redemption of $10,000. 
B)  loss on bond redemption of $10,000. 
C)  loss on bond redemption of $2,000. 
D)  gain on bond redemption of $2,000.

Question 5

The current ratio permits analysts to compare the liquidity of different sized companies.

Accepted Answer

A) True 
 B)False

Question 6

195. If bonds are originally sold at a discount using the straight-line amortization method:

Accepted Answer

A)  Interest expense in the earlier years of the bond's life will be less than the interest to be paid. 
B)  Interest expense in the earlier years of the bond's life will be the same as interest to be paid. 
C)  Unamortized discount is subtracted from the face value of the bond to determine its carrying value. 
D)  Unamortized discount is added to the face value of the bond to determine its carrying value. 
A)  Interest expense in the earlier years of the bond's life will be less than the interest to be paid. 
B)  Interest expense in the earlier years of the bond's life will be the same as interest to be paid. 
C)  Unamortized discount is subtracted from the face value of the bond to determine its carrying value. 
D)  Unamortized discount is added to the face value of the bond to determine its carrying value.

Question 7

With an interest-bearing note, the amount of cash received upon issuance of the note generally exceeds the note's face value.

Accepted Answer

A) True 
 B)False

Question 8

In a recent year Joey Corporation had net income of $150,000, interest expense of $40,000, and tax expense of $20,000. What was Joey Corporation's times interest earned for the year?

Accepted Answer

A)  5.25 
B)  4.75 
C)  3.75 
D)  4.25 
A)  5.25 
B)  4.75 
C)  3.75 
D)  4.25

Question 9

If $800,000, 6% bonds are issued on January 1, and pay interest annually, the amount of interest paid on the following January 1 will be $48,000.

Accepted Answer

A) True 
 B)False

Question 10

Bonds are a form of interest-bearing notes payable.

Accepted Answer

A) True 
 B)False

Question 11

Sales taxes collected from customers are a ______________ of the business until they are remitted to the taxing agency.

Accepted Answer

The answer of Sales taxes collected from customers are a...

Question 12

Bonds that are secured by real estate are termed

Accepted Answer

A)  mortgage bonds. 
B)  convertible bonds. 
C)  debentures. 
D)  bearer bonds. 
A)  mortgage bonds. 
B)  convertible bonds. 
C)  debentures. 
D)  bearer bonds.

Question 13

217. When the effective-interest method of bond discount amortization is used,

Accepted Answer

A)  the applicable interest rate used to compute interest expense is the prevailing market interest rate on the date of each interest payment date. 
B)  the carrying value of the bonds will decrease each period. 
C)  interest expense will not be a constant dollar amount over the life of the bond. 
D)  interest paid to bondholders will be a function of the effective-interest rate on the date the bonds are issued. 
A)  the applicable interest rate used to compute interest expense is the prevailing market interest rate on the date of each interest payment date. 
B)  the carrying value of the bonds will decrease each period. 
C)  interest expense will not be a constant dollar amount over the life of the bond. 
D)  interest paid to bondholders will be a function of the effective-interest rate on the date the bonds are issued.

Question 14

218. When the effective-interest method of bond premium amortization is used, the

Accepted Answer

A)  amount of premium amortized will get larger with successive amortization. 
B)  carrying value of the bonds will increase with successive amortization. 
C)  interest paid to bondholders will increase after each interest payment date. 
D)  interest rate used to calculate interest expense will be the contractual rate. 
A)  amount of premium amortized will get larger with successive amortization. 
B)  carrying value of the bonds will increase with successive amortization. 
C)  interest paid to bondholders will increase after each interest payment date. 
D)  interest rate used to calculate interest expense will be the contractual rate.

Question 15

The relationship of current assets to current liabilities is used in evaluating a company's

Accepted Answer

A)  operating cycle. 
B)  revenue-producing ability. 
C)  short-term debt paying ability. 
D)  long-range solvency. 
A)  operating cycle. 
B)  revenue-producing ability. 
C)  short-term debt paying ability. 
D)  long-range solvency.

Question 16

If bonds are issued at a discount, it means that the

Accepted Answer

A)  financial strength of the issuer is suspect. 
B)  market interest rate is higher than the contractual interest rate. 
C)  market interest rate is lower than the contractual interest rate. 
D)  bondholder will receive effectively less interest than the contractual interest rate. 
A)  financial strength of the issuer is suspect. 
B)  market interest rate is higher than the contractual interest rate. 
C)  market interest rate is lower than the contractual interest rate. 
D)  bondholder will receive effectively less interest than the contractual interest rate.

Question 17

207. Dart Company issued $600,000 of 8%, 5-year bonds at 105, with interest paid annually. Assuming straight-line amortization, what is the carrying value of the bonds after one year?

Accepted Answer

A)  $630,000 
B)  $627,000 
C)  $624,000 
D)  $633,000 
A)  $630,000 
B)  $627,000 
C)  $624,000 
D)  $633,000

Question 18

205. Pakota Company issued $700,000 of 6%, 5-year bonds at 98, with interest paid annually. Assuming straight-line amortization, what is the carrying value of the bonds after one year?

Accepted Answer

A)  $686,000 
B)  $683,200 
C)  $688,800 
D)  $697,200 
A)  $686,000 
B)  $683,200 
C)  $688,800 
D)  $697,200

Question 19

If bonds with a face value of $140,000 are converted into common stock when the carrying value of the bonds is $135,000, the entry to record the conversion will include a debit to

Accepted Answer

A)  Bonds Payable for $140,000. 
B)  Bonds Payable for $135,000. 
C)  Discount on Bonds Payable for $5,000. 
D)  Bonds Payable equal to the market price of the bonds on the date of conversion. 
A)  Bonds Payable for $140,000. 
B)  Bonds Payable for $135,000. 
C)  Discount on Bonds Payable for $5,000. 
D)  Bonds Payable equal to the market price of the bonds on the date of conversion.

Question 20

The selling price of a $10,000, 5-year bond, will be less than $10,000 if the

Accepted Answer

A)  contractual interest rate is less than the market interest rate. 
B)  contractual interest rate is greater than the market interest rate. 
C)  bond is convertible. 
D)  contractual interest rate is equal to the market interest rate. 
A)  contractual interest rate is less than the market interest rate. 
B)  contractual interest rate is greater than the market interest rate. 
C)  bond is convertible. 
D)  contractual interest rate is equal to the market interest rate.

Unsecured bonds that are issued against the general credit of the borrower are called ________________ bonds.

All bonds will always fall into which one of the following pairs of categories?

Bonds that may be exchanged for common stock at the option of the bondholders are called

A $600,000 bond was retired at 98 when the carrying value of the bond was $590,000. The entry to record the retirement would include a

The current ratio permits analysts to compare the liquidity of different sized companies.

195. If bonds are originally sold at a discount using the straight-line amortization method:

With an interest-bearing note, the amount of cash received upon issuance of the note generally exceeds the note's face value.

In a recent year Joey Corporation had net income of $150,000, interest expense of $40,000, and tax expense of $20,000. What was Joey Corporation's times interest earned for the year?

If $800,000, 6% bonds are issued on January 1, and pay interest annually, the amount of interest paid on the following January 1 will be $48,000.

Bonds are a form of interest-bearing notes payable.

Sales taxes collected from customers are a ______________ of the business until they are remitted to the taxing agency.

Bonds that are secured by real estate are termed

217. When the effective-interest method of bond discount amortization is used,

218. When the effective-interest method of bond premium amortization is used, the

The relationship of current assets to current liabilities is used in evaluating a company's

If bonds are issued at a discount, it means that the

207. Dart Company issued $600,000 of 8%, 5-year bonds at 105, with interest paid annually. Assuming straight-line amortization, what is the carrying value of the bonds after one year?

205. Pakota Company issued $700,000 of 6%, 5-year bonds at 98, with interest paid annually. Assuming straight-line amortization, what is the carrying value of the bonds after one year?

If bonds with a face value of $140,000 are converted into common stock when the carrying value of the bonds is $135,000, the entry to record the conversion will include a debit to

The selling price of a $10,000, 5-year bond, will be less than $10,000 if the

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Corporations: Organization, Stock Transactions

Statement of Cash Flows

Financial Statement Analysis

Specimen Financial Statements: Apple Inc

Specimen Financial Statements: Pepsico, Inc

Specimen Financial Statements: the Coca-Cola Company

Specimen Financial Statements: Amazoncom, Inc

Specimen Financial Statements: Wal-Mart Stores, Inc

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Exam 10: Liabilities

Unsecured bonds that are issued against the general credit of the borrower are called ________________ bonds.

All bonds will always fall into which one of the following pairs of categories?

Bonds that may be exchanged for common stock at the option of the bondholders are called

A $600,000 bond was retired at 98 when the carrying value of the bond was $590,000. The entry to record the retirement would include a

The current ratio permits analysts to compare the liquidity of different sized companies.

195. If bonds are originally sold at a discount using the straight-line amortization method:

With an interest-bearing note, the amount of cash received upon issuance of the note generally exceeds the note's face value.

In a recent year Joey Corporation had net income of $150,000, interest expense of $40,000, and tax expense of $20,000. What was Joey Corporation's times interest earned for the year?

If $800,000, 6% bonds are issued on January 1, and pay interest annually, the amount of interest paid on the following January 1 will be $48,000.

Bonds are a form of interest-bearing notes payable.

Sales taxes collected from customers are a ______________ of the business until they are remitted to the taxing agency.

Bonds that are secured by real estate are termed

217. When the effective-interest method of bond discount amortization is used,

218. When the effective-interest method of bond premium amortization is used, the

The relationship of current assets to current liabilities is used in evaluating a company's

If bonds are issued at a discount, it means that the

207. Dart Company issued $600,000 of 8%, 5-year bonds at 105, with interest paid annually. Assuming straight-line amortization, what is the carrying value of the bonds after one year?

205. Pakota Company issued $700,000 of 6%, 5-year bonds at 98, with interest paid annually. Assuming straight-line amortization, what is the carrying value of the bonds after one year?

If bonds with a face value of $140,000 are converted into common stock when the carrying value of the bonds is $135,000, the entry to record the conversion will include a debit to

The selling price of a $10,000, 5-year bond, will be less than $10,000 if the

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Corporations: Organization, Stock Transactions

Statement of Cash Flows

Financial Statement Analysis

Specimen Financial Statements: Apple Inc

Specimen Financial Statements: Pepsico, Inc

Specimen Financial Statements: the Coca-Cola Company

Specimen Financial Statements: Amazoncom, Inc

Specimen Financial Statements: Wal-Mart Stores, Inc

Filters