1.Commercial mortgages are secured against land and building and:

Multiple Choice

• Have interest rates fixed for the amortization period

• Have an amortization period less than the term of the loan

• Have blended payments due monthly or semi-annually

• Are required to be renewed by the lender at the end of the term

2. Which of the following characteristics might cause the reclassification of a liability from long-term to current?

Multiple Choice

• Violation of a provision of a long-term debt covenant

• Short-term obligations that are expected to be refinanced with long-term debt

• Unearned revenue that involves long-term deferment of the delivery of goods

• Long-term debt to be liquidated from a sinking fund that is reported as a non-current asset

3. Which of the following does NOT trigger the commencement of capitalizing borrowing costs? When

Multiple Choice

• Money is borrowed

• A payment is made on the asset

• when the order is placed for the asset

• When activities begin to make the asset ready for use

4. A form of interest free financing is:

Multiple Choice

• Commercial paper

• Demand loan

• Trade payables

• Unearned revenue