A) Liquid assets divided by current liabilities.
B) A calculation that determines what some future payments are worth today.
C) The ability to pay current obligations.
D) These are liabilities that have to be paid in one year or less.
E) A bond feature that puts a creditor ahead of other creditors in order of payment.
F) Net income before taxes and interest expense divided by interest expense.
G) Where interest expense is the market interest rate times the bond's carrying value.
H) Current liabilities divided by current assets.
I) These are liabilities that do not have to be paid within the upcoming year.
J) Net income after taxes and interest expense divided by interest expense.
K) Spreads a bond discount or premium evenly over the lifetime of the bond.
L) The amount of all the liabilities currently on the balance sheet at the close of the period.
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Multiple Choice
A) not include this information in its annual report.
B) record a liability and a gain for $2 million.
C) only explain the situation in the notes to the financial statements.
D) record a liability and a loss for $2 million.
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Multiple Choice
A) Debit Interest Expense and credit Interest Payable for $450.
B) Debit Interest Expense and credit Interest Payable for $225.
C) Debit Interest Expense and credit Interest Payable for $900.
D) Debit Interest Payable and credit Interest Expense for $900.
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Multiple Choice
A) a reduction from the Bond Payable account on the balance sheet.
B) an expense on the income statement.
C) an asset on the balance sheet.
D) revenue on the income statement.
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Multiple Choice
A) future event is reasonably possible.
B) amount owed cannot be reasonably estimated.
C) future event is probable and the amount owed can be reasonably estimated.
D) future event is remote.
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True/False
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Multiple Choice
A) $200,000 to Bonds Payable,a credit of $6,000 to Gain on Bond Retirement,and a credit of $194,000 to Cash.
B) $194,000 to Bonds Payable,a debit to Gain on Bond Retirement of $6,000,and a credit of $200,000 to Cash.
C) $200,000 to Bonds Payable,a credit of $6,000 to Interest Expense,and a credit of $194,000 to Cash.
D) $194,000 to Bonds Payable and a credit of $194,000 to Cash.
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Multiple Choice
A) debentures.
B) secured.
C) callable.
D) convertible.
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Multiple Choice
A) secured bonds.
B) convertible bonds.
C) callable bonds.
D) serial bonds.
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Multiple Choice
A) increases over the life of the bonds when bonds are issued at a discount.
B) decreases over the life of the bonds when bonds are issued at a discount.
C) stays constant over the life of the bonds,regardless of whether bonds are issued at par,a discount,or a premium.
D) increases over the life of the bonds under the effective-interest method,but stays constant under the straight-line method of amortization.
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Multiple Choice
A) Notes Payable for $360,000,debit Interest Expense for $25,200,credit Cash for $360,000,and credit Interest Payable for $25,200.
B) Accrued Interest and credit Cash for $25,200.
C) Cash and credit Notes Payable for $360,000.
D) Cash for $360,000,debit Interest Expense for $25,200,credit Notes Payable for $360,000,and credit Interest Payable $25,200.
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Multiple Choice
A) debit Interest Expense for $18,000 and credit Cash for $18,000.
B) debit Cash for $18,000 and credit Interest Payable for $18,000.
C) debit Interest Expense for $6,000,debit Interest Payable $12,000 and credit Cash for $18,000.
D) debit Interest Payable for $12,000,debit Accrued Interest $6,000 and credit Cash for $18,000.
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Multiple Choice
A) $750.
B) $814.95.
C) $1,050.
D) $1,140.93.
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Multiple Choice
A) debit to Payroll Tax Expense for $91,080.
B) credit to Payroll Tax Expense for $91,080.
C) debit to FICA Payable for $82,620.
D) debit to Unemployment Tax Payable of $8,460.
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Multiple Choice
A) The Premium on Bonds Payable account is amortized each year and reduces the company's annual Interest Expense.
B) On the date of issuance,the stated interest rate was greater than the market interest rate.
C) As the current date approaches the maturity date,the carrying value of the bond approaches the face value of the bond.
D) The account used to record the premium has a normal debit balance.
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Multiple Choice
A) Debit Interest Expense and credit Interest Payable for $2,700.
B) Debit Interest Expense and credit Interest Payable for $3,600.
C) Debit Interest Expense and credit Interest Payable for $8,100.
D) Debit Interest Payable and credit Cash for $3,600.
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Multiple Choice
A) Debit Interest Expense and credit Interest Payable for $4,000.
B) Debit Cash and credit Interest Payable for $4,000.
C) Debit Cash and credit Interest Expense for $4,000.
D) Debit Interest Payable and credit Interest Expense for $4,000.
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True/False
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Multiple Choice
A) represent the federal taxes withheld from the employees' paychecks.
B) are the amounts paid by the employee.
C) are an added payroll expense beyond the wages and salaries earned by employees.
D) represent the FICA taxes withheld from employees' paychecks.
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Multiple Choice
A) Payroll deductions are an expense of the company.
B) When recording the payroll,Salaries and Wages Expense equals the sum of all the deductions.
C) The net pay is debited to Salaries and Wages Expense when the payroll is recorded.
D) Gross earnings are computed by multiplying the time worked by the pay rate promised by the employer.
Correct Answer
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