Question
The time period for classifying a liability as current is one year or the operating cycle, whichever is a.shorter. b.probable. c.longer. d.possible. Which one of
The time period for classifying a liability as current is one year or the operating cycle, whichever is
a.shorter.
b.probable.
c.longer.
d.possible.
Which one of the following is not a typical current liability?
a.Interest payable
b.Salaries payable
c.Current maturities of long-term debt
d.Mortgages payable
Buttner Company borrows $88,500 on September 1, 2017, from Harrington State Bank by signing an $88,500, 12%, one-year note. How much is accrued interest at December 31, 2017?
a.$10,620
b.$3,540
c.$2,655
d.$4,425
How is the market value of a bond issuance determined?
a.By computing the present value of the principal.
b.By computing the present value of the interest payments.
c.By adding the face value of the principal amount to the stated value of the interest payments.
d.By adding the present value of the principal amount to the present value of the interest payments.
If the contractual rate of interest is lower than the market rate of interest, bonds will sell at a premium.
a.True
b.False
What is the effect of amortizing a bond discount?
a.It increases the carrying value of the bonds.
b.There is no effect on the bond interest expense.
c.It decreases the maturity value of the bonds.
d.It decreases bond interest expense.
Cuso Inc. issues 10-year bonds with a maturity value of $200,000. If the bonds are issued at a premium, what does this indicate?
The contractual interest rate exceeds the market interest rate.
b.The contractual interest rate and the market interest rate are the same.
c.The market interest rate exceeds the contractual interest rate.
d.No relationship exists between the market and contractual rates.
When a bond is sold at a premium, at what amount is it reported on the balance sheet?
a.Interest value
b.Carrying value
c.Premium value
d.Market value
Tanner, Inc. issued a 10%, 5-year, $100,000 bond when the market rate of interest was 12%. At what value will the bond sell?
a.Par
b.A discount
c.Face value
d.A premium
Which of the following is not a commonly used method of presenting current liabilities on the balance sheet?
a.Listing current debt in the order of oldest first and then chronologically.
b.In order of their maturity.
c.Listing currently maturing long-term debt first.
d.In order of magnitude or size.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started