Question 48

A note is a written contract that specifies the payment of designated amounts of cash by the debtor on stated date.

Group of answer choices

True

False

Question 47

1.67pts

Which of the following is a debt contract sold to public in general?

Group of answer choices

Bonds

Notes payable

Sales

Receivable account

Question 46

1.67pts

On January 1, 20X3, Friday Corporation issues $1,000,000 in term bonds with a stated rate of interest of 5% and an effective rate of interest of 6%. The term of the bonds is 2 years and interest is paid semiannually, on June 30 and December 31. Determine the issuance price of these bonds.

Group of answer choices

$500,000

$972,575

$981,418

$893,018

Question 45

1.67pts

Felice Corporation sells blenders with an extended warranty, which kicks in after the embedded warranty expires after one year. During 20X6, Felice sold 700 blenders and out of those, 300 were sold with the extended warranty. The extended warranty costs $10. In 20X7, Felice made repairs under the extended warranty of $200. Felice recognizes revenue using a straight-line basis over 2 years. Which of the following journal entries records the sale of the extended warranties in 20X6?

Group of answer choices

Cash 3,000

Warranty Payable 3,000

Unearned Revenue 3,000

Revenue 3,000

Cash 3,000

Unearned Revenue 3,000

Warranty expense 3,000

Unearned Revenue 3,000

Question 44

1.67pts

Delta Company reported revenue of $150,000 on its 20X4 income statement. This amount will not be subject to income tax until 20X8. The effective tax rate is 40 percent. The entry made to record deferred income tax is:

Group of answer choices

Income Tax ExpenseDeferred 150,000

Deferred Income Tax Liability 150,000

Income Tax ExpenseDeferred60,000

Deferred Income Tax Liability 60,000

Deferred Income Tax Liability 200,000

Income Tax ExpenseDeferred 200,000

Income Tax ExpenseDeferred60,000

Cash60,000

Question 43

1.67pts

On January 1, 20X9, Stella Corporation issues $300,000 in term bonds with a stated interest rate of 4%. The effective interest rate is 6%. The bonds have a term of 3 years and interest is paid twice a year, on June 30 and December 31. Determine the issuance price of the bonds.

Group of answer choices

$300,000

$283,747

$290,000

$294,602

Question 42

1.67pts

When an extended warranty is sold, the seller must credit unearned revenue.

Group of answer choices

True

False

Question 41

1.67pts

Extended and embedded warranties are accounted for in the same manner since both are warranties.

Group of answer choices

True

False

Question 40

1.67pts

A current ratio of 0.6 to 1.0 means:

Group of answer choices

current assets is 60 percent of current liabilities.

current liabilities is 60 percent of current assets.

current liabilities represent 40 percent of total liabilities.

the company has more current assets than current liabilities.

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Question 39

1.67pts

Which of the following statements is true of liabilities?

Group of answer choices

The smaller a liability total is in comparison to the reported amount of assets, the riskier the financial position.

A lower percentage of current liabilities to current assets will result in a lower current ratio.

It is an obligation owed to a party outside the reporting organization.

It cannot be settled by the conveyance of other assets or the delivery of services.