Question 1

An alternate term for a timing difference is a _________________________.

Accepted Answer

temporary

Question 2

When a bond issue is retired early,the amount of unamortized discount or premium is not considered in the calculation of a gain or loss.

Accepted Answer

A) True 
 B)False

Question 3

Premium on Bonds Payable is a balance sheet item for Generic 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 4

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

Accepted Answer

A) True 
 B)False

Question 5

If bonds were initially issued at a discount,the interest expense on the bonds calculated using the effective interest method will

Accepted Answer

A) decrease as the bonds approach their maturity date 
B) increase as the bonds approach their maturity date 
C) remain constant throughout the bonds' life 
D) fluctuate throughout the bonds' life 
A) decrease as the bonds approach their maturity date 
B) increase as the bonds approach their maturity date 
C) remain constant throughout the bonds' life 
D) fluctuate throughout the bonds' life

Question 6

When determining the amount of interest to be paid on a bond,which of the following information is not necessary?

Accepted Answer

A) The face amount of the bonds 
B) The selling price of the bonds 
C) The face rate of interest on the bonds 
D) The length of the interest period,annually or semiannually 
A) The face amount of the bonds 
B) The selling price of the bonds 
C) The face rate of interest on the bonds 
D) The length of the interest period,annually or semiannually

Question 7

Which of the following terms does not describe the interest rate printed on the bond certificate?

Accepted Answer

A) Coupon rate 
B) Effective rate 
C) Face rate 
D) Stated rate 
A) Coupon rate 
B) Effective rate 
C) Face rate 
D) Stated rate

Question 8

Convertible bonds are attractive to investors because

Accepted Answer

A) they usually carry a higher rate of interest than non-convertible bonds. 
B) they carry a convertible interest rate that can be increased when the prime rate of interest increases. 
C) they can be converted into stock at the issuer's option. 
D) the issuing company cannot retire the bonds before maturity. 
A) they usually carry a higher rate of interest than non-convertible bonds. 
B) they carry a convertible interest rate that can be increased when the prime rate of interest increases. 
C) they can be converted into stock at the issuer's option. 
D) the issuing company cannot retire the bonds before maturity.

Question 9

Which of the following terms does not describe an interest rate used to calculate the interest expense on the income statement?

Accepted Answer

A) Nominal rate 
B) Market rate 
C) Effective rate 
D) Yield rate 
A) Nominal rate 
B) Market rate 
C) Effective rate 
D) Yield rate

Question 10

The excess of the face value of bonds over the issue price is known as a premium.

Accepted Answer

A) True 
 B)False

Question 11

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 12

Which of the following trends can be unfavorable from the viewpoint of a bondholder?

Accepted Answer

A) The issuing company's debt ratio is steadily declining. 
B) The issuing company's interest coverage ratio is steadily rising. 
C) Market interest rates are steadily rising. 
D) The issuing company's net cash flow from operating activities is steadily increasing. 
A) The issuing company's debt ratio is steadily declining. 
B) The issuing company's interest coverage ratio is steadily rising. 
C) Market interest rates are steadily rising. 
D) The issuing company's net cash flow from operating activities is steadily increasing.

Question 13

Which of the following accounts would not appear on the balance sheet of a lessee company recording a capital lease?

Accepted Answer

A) Accumulated depreciation on the leased asset 
B) Lease obligation in the current liability section 
C) Lease obligation in the long-term liability section 
D) Rent expense on the income statement 
A) Accumulated depreciation on the leased asset 
B) Lease obligation in the current liability section 
C) Lease obligation in the long-term liability section 
D) Rent expense on the income statement

Question 14

Most long-term liabilities are related to a firm's investing activities.

Accepted Answer

A) True 
 B)False

Question 15

In general,the international accounting standards provide lease criteria that are similar to the U.S.standards.

Accepted Answer

A) True 
 B)False

Question 16

A bond issue price is the present value of the cash flows that the bond will produce.

Accepted Answer

A) True 
 B)False

Question 17

A lease is accounted for as a capital lease if the lease term is 75% or more of the property's economic life.

Accepted Answer

A) True 
 B)False

Question 18

Bonds in the amount of $100,000 and a life of 10 years were issued by the Gordman Company.If the face rate is 6% and interest is paid semiannually,what would be the total amount of interest paid over the life of the bonds?

Accepted Answer

A) $ 60,000 
B) $120,000 
C) $ 30,000 
D) $ 6,000 
A) $ 60,000 
B) $120,000 
C) $ 30,000 
D) $ 6,000

Question 19

The effective interest rate method of amortization amortizes the discount or premium in a manner that produces a constant amount of interest expense from period to period.

Accepted Answer

A) True 
 B)False

Question 20

On January 2,2012,Dock Master Construction,Inc.issued $500,000,10-year bonds for $574,540.The bonds pay interest on June 30 and December 31.The face rate is 8% and the market rate is 6%.The annual cash payment (paid in semiannual payments)on the bonds is

Accepted Answer

A) $40,000. 
B) $30,000. 
C) $20,000. 
D) $15,000. 
A) $40,000. 
B) $30,000. 
C) $20,000. 
D) $15,000.

An alternate term for a timing difference is a _________________________.

When a bond issue is retired early,the amount of unamortized discount or premium is not considered in the calculation of a gain or loss.

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

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

If bonds were initially issued at a discount,the interest expense on the bonds calculated using the effective interest method will

When determining the amount of interest to be paid on a bond,which of the following information is not necessary?

Which of the following terms does not describe the interest rate printed on the bond certificate?

Convertible bonds are attractive to investors because

Which of the following terms does not describe an interest rate used to calculate the interest expense on the income statement?

The excess of the face value of bonds over the issue price is known as a premium.

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?

Which of the following trends can be unfavorable from the viewpoint of a bondholder?

Which of the following accounts would not appear on the balance sheet of a lessee company recording a capital lease?

Most long-term liabilities are related to a firm's investing activities.

In general,the international accounting standards provide lease criteria that are similar to the U.S.standards.

A bond issue price is the present value of the cash flows that the bond will produce.

A lease is accounted for as a capital lease if the lease term is 75% or more of the property's economic life.

Bonds in the amount of $100,000 and a life of 10 years were issued by the Gordman Company.If the face rate is 6% and interest is paid semiannually,what would be the total amount of interest paid over the life of the bonds?

The effective interest rate method of amortization amortizes the discount or premium in a manner that produces a constant amount of interest expense from period to period.

On January 2,2012,Dock Master Construction,Inc.issued $500,000,10-year bonds for $574,540.The bonds pay interest on June 30 and December 31.The face rate is 8% and the market rate is 6%.The annual cash payment (paid in semiannual payments)on the bonds is

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 Time Value of Money

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

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Exam 10: Long-Term Liabilities

An alternate term for a timing difference is a _________________________.

When a bond issue is retired early,the amount of unamortized discount or premium is not considered in the calculation of a gain or loss.

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

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

If bonds were initially issued at a discount,the interest expense on the bonds calculated using the effective interest method will

When determining the amount of interest to be paid on a bond,which of the following information is not necessary?

Which of the following terms does not describe the interest rate printed on the bond certificate?

Convertible bonds are attractive to investors because

Which of the following terms does not describe an interest rate used to calculate the interest expense on the income statement?

The excess of the face value of bonds over the issue price is known as a premium.

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?

Which of the following trends can be unfavorable from the viewpoint of a bondholder?

Which of the following accounts would not appear on the balance sheet of a lessee company recording a capital lease?

Most long-term liabilities are related to a firm's investing activities.

In general,the international accounting standards provide lease criteria that are similar to the U.S.standards.

A bond issue price is the present value of the cash flows that the bond will produce.

A lease is accounted for as a capital lease if the lease term is 75% or more of the property's economic life.

Bonds in the amount of $100,000 and a life of 10 years were issued by the Gordman Company.If the face rate is 6% and interest is paid semiannually,what would be the total amount of interest paid over the life of the bonds?

The effective interest rate method of amortization amortizes the discount or premium in a manner that produces a constant amount of interest expense from period to period.

On January 2,2012,Dock Master Construction,Inc.issued $500,000,10-year bonds for $574,540.The bonds pay interest on June 30 and December 31.The face rate is 8% and the market rate is 6%.The annual cash payment (paid in semiannual payments)on the bonds is

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 Time Value of Money

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

International Financial Reporting Standards

Filters