Question 1

Julie's Boutique has total receipts for the month of $31,920 including sales taxes. If the sales tax rate is 5%, what are Julie's sales for the month?

Accepted Answer

A) $30,324 
B) $30,400 
C) $33,516 
D) It cannot be determined. 
A) $30,324 
B) $30,400 
C) $33,516 
D) It cannot be determined. B

Question 2

Each of the following may be shown on a supporting schedule instead of on the balance sheet except the

Accepted Answer

A) current maturities of long-term debt. 
B) conversion privileges. 
C) interest rates. 
D) maturity dates. 
A) current maturities of long-term debt. 
B) conversion privileges. 
C) interest rates. 
D) maturity dates. A

Question 3

The following exhibit is for Kmart bonds.   On the day of trading referred to above,

Accepted Answer

A) no Kmart bonds were traded. 
B) bonds with market prices of $3,500 were traded. 
C) at closing, the selling price of the bond was higher than the previous day's price. 
D) the bond sold for $100.25 
A) no Kmart bonds were traded. 
B) bonds with market prices of $3,500 were traded. 
C) at closing, the selling price of the bond was higher than the previous day's price. 
D) the bond sold for $100.25 C

Question 4

Which of the following statements concerning current liabilities is incorrect?

Accepted Answer

A) Current liabilities include unearned revenues. 
B) A company that has more current liabilities than current assets is usually the subject of some concern. 
C) Current liabilities include prepaid expenses. 
D) A current liability is a debt that can reasonably be expected to be paid out of existing current assets or result in the creation of other current liabilities. 
A) Current liabilities include unearned revenues. 
B) A company that has more current liabilities than current assets is usually the subject of some concern. 
C) Current liabilities include prepaid expenses. 
D) A current liability is a debt that can reasonably be expected to be paid out of existing current assets or result in the creation of other current liabilities.

Question 5

On January 1, 2015, Donahue Company, a calendar-year company, issued $600,000 of notes payable, of which $150,000 is due on January 1 for each of the next four years. The proper balance sheet presentation on December 31, 2015, is

Accepted Answer

A) Current Liabilities, $600,000. 
B) Long-term Debt , $600,000. 
C) Current Liabilities, $150,000; Long-term Debt, $450,000. 
D) Current Liabilities, $450,000; Long-term Debt, $150,000. 
A) Current Liabilities, $600,000. 
B) Long-term Debt , $600,000. 
C) Current Liabilities, $150,000; Long-term Debt, $450,000. 
D) Current Liabilities, $450,000; Long-term Debt, $150,000.

Question 6

The market value (present value) of a bond is a function of all of the following except the

Accepted Answer

A) dollar amounts to be received. 
B) length of time until the amounts are received. 
C) market rate of interest. 
D) length of time until the bond is sold. 
A) dollar amounts to be received. 
B) length of time until the amounts are received. 
C) market rate of interest. 
D) length of time until the bond is sold.

Question 7

The terms of the bond issue are set forth in a formal legal document called a bond indenture.

Accepted Answer

A) True 
 B)False

Question 8

The entry to record the issuance of an interest-bearing note credits Notes Payable for the note's

Accepted Answer

A) maturity value. 
B) market value. 
C) face value. 
D) cash realizable value. 
A) maturity value. 
B) market value. 
C) face value. 
D) cash realizable value.

Question 9

Unearned revenues should be classified as Other Revenues and Gains on the Income Statement.

Accepted Answer

A) True 
 B)False

Question 10

Aire Corporation retires its bonds at 106 on January 1, following the payment of semi-annual interest. The face value of the bonds is $800,000. The carrying value of the bonds at the redemption date is $842,000. The entry to record the redemption will include a

Accepted Answer

A) credit of $42,000 to Loss on Bond Redemption. 
B) debit of $48,000 to Premium on Bonds Payable. 
C) credit of $7,000 to Gain on Bond Redemption. 
D) debit of $42,000 to Premium on Bonds Payable. 
A) credit of $42,000 to Loss on Bond Redemption. 
B) debit of $48,000 to Premium on Bonds Payable. 
C) credit of $7,000 to Gain on Bond Redemption. 
D) debit of $42,000 to Premium on Bonds Payable.

Question 11

On March 31, 2015, $6,000,000 of 6%, 10-year bonds payable, dated December 31, 2014, are issued. Interest on the bonds is payable semiannually each June 30 and December 31. The total amount received (including accrued interest) by the issuing corporation is $6,072,000. Which of the following is correct?

Accepted Answer

A) The bonds were issued at a premium. 
B) The amount of cash paid to bondholders on the next interest date, June 30, 2015, is $360,000. 
C) The amount of cash paid to bondholders on the next interest date, June 30, 2015, is $60,000. 
D) The bonds were issued at a discount. 
A) The bonds were issued at a premium. 
B) The amount of cash paid to bondholders on the next interest date, June 30, 2015, is $360,000. 
C) The amount of cash paid to bondholders on the next interest date, June 30, 2015, is $60,000. 
D) The bonds were issued at a discount.

Question 12

The relationship between current liabilities and current assets is important in evaluating a company's ability to pay off its long-term debt.

Accepted Answer

A) True 
 B)False

Question 13

Working capital is

Accepted Answer

A) current assets plus current liabilities. 
B) current assets minus current liabilities. 
C) current assets divided by current liabilities. 
D) current assets multiplied by current liabilities. 
A) current assets plus current liabilities. 
B) current assets minus current liabilities. 
C) current assets divided by current liabilities. 
D) current assets multiplied by current liabilities.

Question 14

208. Silk Company issued $500,000 of 7%, 10-year bonds on one of its interest dates for $431,850 to yield an effective annual rate of 9%. The effective-interest method of amortization is to be used. Interest is paid annually. What amount of discount (to the nearest dollar) should be amortized for the first interest period?

Accepted Answer

A) $4,770 
B) $6,133 
C) $7,732 
D) $3,867 
A) $4,770 
B) $6,133 
C) $7,732 
D) $3,867

Question 15

204. A corporation issued $600,000, 10%, 7-year bonds on January 1, 2015 for $648,666, which reflects an effective-interest rate of 7%. Interest is paid semiannually on January 1 and July 1. If the corporation uses the effective-interest method of amortization of bond premium, the amount of bond interest expense to be recognized on July 1, 2015, is

Accepted Answer

A) $30,000. 
B) $21,000. 
C) $32,434. 
D) $22,703. 
A) $30,000. 
B) $21,000. 
C) $32,434. 
D) $22,703.

Question 16

The carrying value of bonds will equal the market price

Accepted Answer

A) at the close of every trading day. 
B) at the end of the fiscal period. 
C) on the date of issuance. 
D) every six months on the date interest is paid. 
A) at the close of every trading day. 
B) at the end of the fiscal period. 
C) on the date of issuance. 
D) every six months on the date interest is paid.

Question 17

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 18

Valerie's Salon has total receipts for the month of $20,670 including sales taxes. If the sales tax rate is 6%, what are Valerie's sales for the month?

Accepted Answer

A) $19,637 
B) $21,910 
C) $19,500 
D) It cannot be determined. 
A) $19,637 
B) $21,910 
C) $19,500 
D) It cannot be determined.

Question 19

Unearned Rent Revenue is

Accepted Answer

A) a contra account to Rent Revenue. 
B) a revenue account. 
C) reported as a current liability. 
D) debited when rent is received in advance. 
A) a contra account to Rent Revenue. 
B) a revenue account. 
C) reported as a current liability. 
D) debited when rent is received in advance.

Question 20

Current liabilities are expected to be paid within one year or the operating cycle, whichever is longer.

Accepted Answer

A) True 
 B)False

Julie's Boutique has total receipts for the month of $31,920 including sales taxes. If the sales tax rate is 5%, what are Julie's sales for the month?

Each of the following may be shown on a supporting schedule instead of on the balance sheet except the

The following exhibit is for Kmart bonds. On the day of trading referred to above,

Which of the following statements concerning current liabilities is incorrect?

On January 1, 2015, Donahue Company, a calendar-year company, issued $600,000 of notes payable, of which $150,000 is due on January 1 for each of the next four years. The proper balance sheet presentation on December 31, 2015, is

The market value (present value) of a bond is a function of all of the following except the

The terms of the bond issue are set forth in a formal legal document called a bond indenture.

The entry to record the issuance of an interest-bearing note credits Notes Payable for the note's

Unearned revenues should be classified as Other Revenues and Gains on the Income Statement.

Aire Corporation retires its bonds at 106 on January 1, following the payment of semi-annual interest. The face value of the bonds is $800,000. The carrying value of the bonds at the redemption date is $842,000. The entry to record the redemption will include a

The relationship between current liabilities and current assets is important in evaluating a company's ability to pay off its long-term debt.

Working capital is

The carrying value of bonds will equal the market price

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

Valerie's Salon has total receipts for the month of $20,670 including sales taxes. If the sales tax rate is 6%, what are Valerie's sales for the month?

Unearned Rent Revenue is

Current liabilities are expected to be paid within one year or the operating cycle, whichever is longer.

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, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

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Exam 10: Liabilities

Julie's Boutique has total receipts for the month of $31,920 including sales taxes. If the sales tax rate is 5%, what are Julie's sales for the month?

Each of the following may be shown on a supporting schedule instead of on the balance sheet except the

The following exhibit is for Kmart bonds. On the day of trading referred to above,

Which of the following statements concerning current liabilities is incorrect?

On January 1, 2015, Donahue Company, a calendar-year company, issued $600,000 of notes payable, of which $150,000 is due on January 1 for each of the next four years. The proper balance sheet presentation on December 31, 2015, is

The market value (present value) of a bond is a function of all of the following except the

The terms of the bond issue are set forth in a formal legal document called a bond indenture.

The entry to record the issuance of an interest-bearing note credits Notes Payable for the note's

Unearned revenues should be classified as Other Revenues and Gains on the Income Statement.

Aire Corporation retires its bonds at 106 on January 1, following the payment of semi-annual interest. The face value of the bonds is $800,000. The carrying value of the bonds at the redemption date is $842,000. The entry to record the redemption will include a

The relationship between current liabilities and current assets is important in evaluating a company's ability to pay off its long-term debt.

Working capital is

The carrying value of bonds will equal the market price

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

Valerie's Salon has total receipts for the month of $20,670 including sales taxes. If the sales tax rate is 6%, what are Valerie's sales for the month?

Unearned Rent Revenue is

Current liabilities are expected to be paid within one year or the operating cycle, whichever is longer.

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, Dividends, and Retained Earnings

Investments

Statement of Cash Flows

Financial Statement Analysis

Filters