Question 1

The Premium on Bonds Payable account is shown on the balance sheet as

Accepted Answer

A)  a contra asset. 
B)  a reduction of an expense. 
C)  an addition to a long-term liability. 
D)  a subtraction from a long-term liability. 
A)  a contra asset. 
B)  a reduction of an expense. 
C)  an addition to a long-term liability. 
D)  a subtraction from a long-term liability.

Question 2

Match the following bond and long-term liability related terms to the appropriate definition.
-The excess of the face value of bonds over the issue price.It occurs when the market rate on the bonds exceeds the face rate.

Accepted Answer

A) Long-term liability 
B) Face value 
C) Debenture bonds 
D) Serial bonds 
E) Callable bonds
F)Face rate of interest
G)Market rate of interest
H)Bond issue price
I)Premium
J)Discount
K)Effective interest method of amortization
L)Carrying value
M)Gain or loss on redemption 
A) Long-term liability 
B) Face value 
C) Debenture bonds 
D) Serial bonds 
E) Callable bonds
F)Face rate of interest
G)Market rate of interest
H)Bond issue price
I)Premium
J)Discount
K)Effective interest method of amortization
L)Carrying value
M)Gain or loss on redemption

Question 3

Bonds were issued at a(n) _____________________ when the issue price exceeds the face value.

Accepted Answer

The answer of Bonds were issued at a(n) _____________________ when...

Question 4

______________________ is either the bond's face value minus any unamortized discount or plus any unamortized premium.

Accepted Answer

The answer of ______________________ is either the bond's face value...

Question 5

On the issuance date, the Bonds Payable account had a balance of $50,000,000 and Premium on Bonds Payable had a balance of $1,000,000.What was the issue price of the bonds?

Accepted Answer

A)  $50,000,000 
B)  $49,000,000 
C)  $51,000,000 
D)  Unable to determine from the information given 
A)  $50,000,000 
B)  $49,000,000 
C)  $51,000,000 
D)  Unable to determine from the information given

Question 6

A decreasing long-term liability account is presented on the statement of cash flows as

Accepted Answer

A)  a decrease in cash in the Financing Activities category. 
B)  a decrease in cash in the Investing Activities category. 
C)  an increase in cash in the Operating Activities category. 
D)  an increase in cash in the Financing Activities category. 
A)  a decrease in cash in the Financing Activities category. 
B)  a decrease in cash in the Investing Activities category. 
C)  an increase in cash in the Operating Activities category. 
D)  an increase in cash in the Financing Activities category.

Question 7

Cash interest payment is computed annually when a bond is issued for other than its face value.For a bond issued at a discount, how will this component change as the bond approaches maturity?

Accepted Answer

A)  decrease 
B)  increase 
C)  remain constant 
D)  not enough information given to decide 
A)  decrease 
B)  increase 
C)  remain constant 
D)  not enough information given to decide

Question 8

IFRS typically uses a more "rule-based" approach than U.S.GAAP.

Accepted Answer

A) True 
 B)False

Question 9

If the lease term is 75% or more of the property's economic life, the lease agreement should be accounted for as an operating lease.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following statements is true with respect to long-term liabilities?

Accepted Answer

A)  They are obligations that will be satisfied within one year. 
B)  An account payable is a good example of a long-term liability because it is interest-bearing. 
C)  Long-term liabilities include bonds, other long-term liabilities and deferred income taxes. 
D)  Accrued expenses are considered to be long-term liabilities. 
A)  They are obligations that will be satisfied within one year. 
B)  An account payable is a good example of a long-term liability because it is interest-bearing. 
C)  Long-term liabilities include bonds, other long-term liabilities and deferred income taxes. 
D)  Accrued expenses are considered to be long-term liabilities.

Question 11

Premium on Bonds Payable is a balance sheet item for Ohio Products Company.How would it most likely be classified on the balance sheet?

Accepted Answer

A)  An increase to a long-term liability 
B)  Revenue 
C)  Long-term asset 
D)  Contra liability 
A)  An increase to a long-term liability 
B)  Revenue 
C)  Long-term asset 
D)  Contra liability

Question 12

In an operating lease, the lessee is not required to record the right to use the property as an asset or to record the obligation for payments as a liability.

Accepted Answer

A) True 
 B)False

Question 13

The effective interest method amortizes premium or discount in a manner that produces a(n) ______________________ rate of interest from period to period.

Accepted Answer

The answer of The effective interest method amortizes premium or...

Question 14

Frank Crawford Corporation's balance sheet showed the following amounts: Current Liabilities, $15,000; Bonds Payable, $8,000; Lease Obligations, $9,000; and Notes Payable, $5,600.Total stockholders' equity was $17,000.The debt-to-equity ratio is:

Accepted Answer

A)  0.88. 
B)  1.18. 
C)  0.71. 
D)  2.21. 
A)  0.88. 
B)  1.18. 
C)  0.71. 
D)  2.21.

Question 15

Fox Chapel Company wishes to issue $400,000 of 5-year, 6% bonds, with interest paid annually at the end of the year.The market rate of interest is currently 5%.What information is needed in order to determine the selling price?
A) The life of the bonds, the market rate of interest, the bond rating, and the face amount of the bonds.
B) The face amount of the bonds, the stated rate of interest, the market rate of interest, and the bond life.
C) The face amount of the bonds, the stated rate of interest, the market rate of interest, and the bond life.
D) The face amount of the bonds, the market rate of interest, the purpose of the issue, and the bond life.

Accepted Answer

The answer of Fox Chapel Company wishes to issue $400,000...

Question 16

Although operating leases are not recorded on the balance sheet by the lessee, they are disclosed in the ____________________________________.

Accepted Answer

notes to the financi

Question 17

Carrying value is computed annually when a bond is issued for other than its face value.For a bond issued at a discount, how will this component change as the bond approaches maturity?

Accepted Answer

A)  decrease 
B)  increase 
C)  remain constant 
D)  not enough information given to decide 
A)  decrease 
B)  increase 
C)  remain constant 
D)  not enough information given to decide

Question 18

All of the following refer to the face rate of interest on a bond except:

Accepted Answer

A)  stated rate 
B)  effective rate 
C)  nominal rate 
D)  coupon rate 
A)  stated rate 
B)  effective rate 
C)  nominal rate 
D)  coupon rate

Question 19

Bennington Corp.issued a $40,000, 10-year bond at the face rate of 8%, paid semiannually.How much cash will the bond investors receive at the end of the first interest period?

Accepted Answer

A)  $800 
B)  $1,600 
C)  $3,200 
D)  $4,000 
A)  $800 
B)  $1,600 
C)  $3,200 
D)  $4,000

Question 20

Deferred income taxes is a balance sheet item for Iowa Products Company.How would it most likely be classified on the balance sheet?

Accepted Answer

A)  Owners' equity 
B)  Long-term liability 
C)  Expense 
D)  Contra liability 
A)  Owners' equity 
B)  Long-term liability 
C)  Expense 
D)  Contra liability

The Premium on Bonds Payable account is shown on the balance sheet as

Match the following bond and long-term liability related terms to the appropriate definition. -The excess of the face value of bonds over the issue price.It occurs when the market rate on the bonds exceeds the face rate.

Bonds were issued at a(n) _____________________ when the issue price exceeds the face value.

______________________ is either the bond's face value minus any unamortized discount or plus any unamortized premium.

On the issuance date, the Bonds Payable account had a balance of $50,000,000 and Premium on Bonds Payable had a balance of $1,000,000.What was the issue price of the bonds?

A decreasing long-term liability account is presented on the statement of cash flows as

Cash interest payment is computed annually when a bond is issued for other than its face value.For a bond issued at a discount, how will this component change as the bond approaches maturity?

IFRS typically uses a more "rule-based" approach than U.S.GAAP.

If the lease term is 75% or more of the property's economic life, the lease agreement should be accounted for as an operating lease.

Which of the following statements is true with respect to long-term liabilities?

Premium on Bonds Payable is a balance sheet item for Ohio Products Company.How would it most likely be classified on the balance sheet?

In an operating lease, the lessee is not required to record the right to use the property as an asset or to record the obligation for payments as a liability.

The effective interest method amortizes premium or discount in a manner that produces a(n) ______________________ rate of interest from period to period.

Frank Crawford Corporation's balance sheet showed the following amounts: Current Liabilities, $15,000; Bonds Payable, $8,000; Lease Obligations, $9,000; and Notes Payable, $5,600.Total stockholders' equity was $17,000.The debt-to-equity ratio is:

Although operating leases are not recorded on the balance sheet by the lessee, they are disclosed in the ____________________________________.

Carrying value is computed annually when a bond is issued for other than its face value.For a bond issued at a discount, how will this component change as the bond approaches maturity?

All of the following refer to the face rate of interest on a bond except:

Bennington Corp.issued a $40,000, 10-year bond at the face rate of 8%, paid semiannually.How much cash will the bond investors receive at the end of the first interest period?

Deferred income taxes is a balance sheet item for Iowa Products Company.How would it most likely be classified 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

Current Liabilities, Contingencies, and the True Value of Money

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Exploring Accounting Standards and Differences around the World

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Exam 10: Long-Term Liabilities

The Premium on Bonds Payable account is shown on the balance sheet as

Match the following bond and long-term liability related terms to the appropriate definition. -The excess of the face value of bonds over the issue price.It occurs when the market rate on the bonds exceeds the face rate.

Bonds were issued at a(n) _____________________ when the issue price exceeds the face value.

______________________ is either the bond's face value minus any unamortized discount or plus any unamortized premium.

On the issuance date, the Bonds Payable account had a balance of $50,000,000 and Premium on Bonds Payable had a balance of $1,000,000.What was the issue price of the bonds?

A decreasing long-term liability account is presented on the statement of cash flows as

Cash interest payment is computed annually when a bond is issued for other than its face value.For a bond issued at a discount, how will this component change as the bond approaches maturity?

IFRS typically uses a more "rule-based" approach than U.S.GAAP.

If the lease term is 75% or more of the property's economic life, the lease agreement should be accounted for as an operating lease.

Which of the following statements is true with respect to long-term liabilities?

Premium on Bonds Payable is a balance sheet item for Ohio Products Company.How would it most likely be classified on the balance sheet?

In an operating lease, the lessee is not required to record the right to use the property as an asset or to record the obligation for payments as a liability.

The effective interest method amortizes premium or discount in a manner that produces a(n) ______________________ rate of interest from period to period.

Frank Crawford Corporation's balance sheet showed the following amounts: Current Liabilities, $15,000; Bonds Payable, $8,000; Lease Obligations, $9,000; and Notes Payable, $5,600.Total stockholders' equity was $17,000.The debt-to-equity ratio is:

Although operating leases are not recorded on the balance sheet by the lessee, they are disclosed in the ____________________________________.

Carrying value is computed annually when a bond is issued for other than its face value.For a bond issued at a discount, how will this component change as the bond approaches maturity?

All of the following refer to the face rate of interest on a bond except:

Bennington Corp.issued a $40,000, 10-year bond at the face rate of 8%, paid semiannually.How much cash will the bond investors receive at the end of the first interest period?

Deferred income taxes is a balance sheet item for Iowa Products Company.How would it most likely be classified 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

Current Liabilities, Contingencies, and the True Value of Money

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Exploring Accounting Standards and Differences around the World

Filters