3.)The effect on the accounts and the financial statements of the issuance of a note for the purpose of converting an existing account payable would be a(n): a. decrease in Accounts Payable and a decrease in Cash b. increase in Cash and an increase in Accounts Payable c. decrease in Accounts Payable and an increase in Notes Payable d. increase in Cash and an increase in Notes Payable 4. The term "deferred taxes" refers to: a. the ability to delay tax payments. b. adjusting income tax expense on the income statement to equal income taxes payable on the balance sheet. c. using the "best" option between Generally Accepted Accounting Principles or the Internal Revenue Code to determine taxable income on the tax return. d. a tax asset or tax liability resulting from temporary differences that exist at the balance sheet date between income before income taxes on the income statement and taxable income on the tax return 5. The cost of a product warranty should be included as an expense in the: a. period the cash is collected for a product sold on account b. future period when the cost of repairing the product is paid c. period of the sale of the product d. future period when the product is repaired or replaced 6. Payroll taxes levied against employees become liabilities: a. the first of the following month b. at the time the liability for the employee's wages is paid c. when earned by the employee d. at the end of an accounting period 7. A legal document that indicates the name of the issuer, the face value of the bond and such other data is called a. a bond certificate. b. a bond indenture. c. trading on the equity. d. a convertible bond. 8. The interest rate specified in the bond indenture is called the: a. discount rate b. contract rate c. market rate d. effective rate