Question 1

Secured bonds are bonds that

Accepted Answer

A) are in the possession of a bank. 
B) are registered in the name of the owner. 
C) have specific assets of the issuer pledged as collateral. 
D) have detachable interest coupons. 
A) are in the possession of a bank. 
B) are registered in the name of the owner. 
C) have specific assets of the issuer pledged as collateral. 
D) have detachable interest coupons.

Question 2

The interest charged on a $90,000, 3-month note payable, at the rate of 8%, would be

Accepted Answer

A) $7,200. 
B) $3,600. 
C) $1,800. 
D) $1,200. 
A) $7,200. 
B) $3,600. 
C) $1,800. 
D) $1,200.

Question 3

A note payable must always be paid before an account payable.

Accepted Answer

A) True 
 B)False

Question 4

Lake Company received proceeds of $188,000 on 10-year, 6% bonds issued on January 1, 2015. The bonds had a face value of $200,000, pay interest semi-annually on June 30 and December 31, and have a call price of 101. Lake uses the straight-line method of amortization. What is the amount of interest Lake must pay the bondholders in 2015?

Accepted Answer

A) $11,200 
B) $12,000 
C) $13,200 
D) $10,800 
A) $11,200 
B) $12,000 
C) $13,200 
D) $10,800

Question 5

216. On January 1, Gage Corporation issues $1,000,000, 5-year, 12% bonds at 95 with interest payable on July 1 and January 1. The carrying value of the bonds, using straight-line amortization, at the end of the third interest period is:

Accepted Answer

A) $965,000. 
B) $970,000. 
C) $930,000. 
D) $938,000. 
A) $965,000. 
B) $970,000. 
C) $930,000. 
D) $938,000.

Question 6

Current liabilities generally appear

Accepted Answer

A) after long-term debt on the balance sheet. 
B) in decreasing order of magnitude on the balance sheet. 
C) in order of maturity on the balance sheet. 
D) in increasing order of magnitude on the balance sheet. 
A) after long-term debt on the balance sheet. 
B) in decreasing order of magnitude on the balance sheet. 
C) in order of maturity on the balance sheet. 
D) in increasing order of magnitude on the balance sheet.

Question 7

The amount of sales tax collected by a retail store when making sales is

Accepted Answer

A) a miscellaneous revenue for the store. 
B) a current liability. 
C) not recorded because it is a tax paid by the customer. 
D) recorded as an operating expense. 
A) a miscellaneous revenue for the store. 
B) a current liability. 
C) not recorded because it is a tax paid by the customer. 
D) recorded as an operating expense.

Question 8

The contractual interest rate is always stated as a(n)

Accepted Answer

A) monthly rate. 
B) daily rate. 
C) semiannual rate. 
D) annual rate. 
A) monthly rate. 
B) daily rate. 
C) semiannual rate. 
D) annual rate.

Question 9

220. Presented here is a partial amortization schedule for Roseland Company who sold $3000,000, five year 10% bonds on January 1, 2014 for $318,000 and uses annual straight-line amortization.   Which of the following amounts should be shown in cell (iii)?

Accepted Answer

A) $9,000. 
B) $18,000. 
C) $3,600. 
D) $1,800. 
A) $9,000. 
B) $18,000. 
C) $3,600. 
D) $1,800.

Question 10

210. 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. How much bond interest expense (to the nearest dollar) should be reported on the income statement for the end of the first year?

Accepted Answer

A) $30,229 
B) $38,867 
C) $45,000 
D) $35,000 
A) $30,229 
B) $38,867 
C) $45,000 
D) $35,000

Secured bonds are bonds that

The interest charged on a $90,000, 3-month note payable, at the rate of 8%, would be

A note payable must always be paid before an account payable.

216. On January 1, Gage Corporation issues $1,000,000, 5-year, 12% bonds at 95 with interest payable on July 1 and January 1. The carrying value of the bonds, using straight-line amortization, at the end of the third interest period is:

Current liabilities generally appear

The amount of sales tax collected by a retail store when making sales is

The contractual interest rate is always stated as a(n)

220. Presented here is a partial amortization schedule for Roseland Company who sold $3000,000, five year 10% bonds on January 1, 2014 for $318,000 and uses annual straight-line amortization. Which of the following amounts should be shown in cell (iii)?

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

Exam 10: Liabilities

Secured bonds are bonds that

The interest charged on a $90,000, 3-month note payable, at the rate of 8%, would be

A note payable must always be paid before an account payable.

216. On January 1, Gage Corporation issues $1,000,000, 5-year, 12% bonds at 95 with interest payable on July 1 and January 1. The carrying value of the bonds, using straight-line amortization, at the end of the third interest period is:

Current liabilities generally appear

The amount of sales tax collected by a retail store when making sales is

The contractual interest rate is always stated as a(n)

220. Presented here is a partial amortization schedule for Roseland Company who sold $3000,000, five year 10% bonds on January 1, 2014 for $318,000 and uses annual straight-line amortization. Which of the following amounts should be shown in cell (iii)?

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