1.Corporations finance their operations through which of the following sources?

1. Short-term debt, such as purchasing goods or services on account
2. Long-term debt, such as issuing bonds or notes payable
3. Equity, such as issuing common or preferred stock
4. All of these choices are correct.

2.One of the main factors that influences the decision to issue debt or equity is the effect that various financing alternatives will have on

1. EPS.
2. net Income.
3. interest expense.
4. All of these choices are correct.

1The interest rate to be paid on the face amount of the bond is called the

1. contract rate.
2. effective rate.
3. discount rate.
4. premium.

2.When a corporation issues bonds, the proceeds received for the bonds will depend on

1. the face amount of the bonds.
2. the interest rate on the bonds.
3. the market rate of interest for similar bonds.
4. All of these choices are correct.

1Any unamortized premium is reported on the balance sheet

1. as a deduction to the face amount of the bonds.
2. as an addition to the face amount of the bonds.
3. as a stand-alone line item.
4. netted with bonds, showing only the carrying amount.

2.Any portion of the bonds or notes that is due within one year is

1. reported as a current liability.
2. reported as a noncurrent liability.
3. disclosed in the notes to the financial statements only.
4. not reported or disclosed in any way.