- Description
ACC 291 Week 3 Practice Quiz
Practice Question 01
The time period for classifying a liability as current is one year or the operating cycle, whichever is
probable. |
longer. |
shorter. |
possible. |
Practice Question 05
Which one of the following is not a typical current liability?
Mortgages payable |
Salaries payable |
Current maturities of long-term debt |
Interest payable |
Practice Question 10
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?
$10,620 |
$2,655 |
$3,540 |
$4,425 |
Practice Question 25
How is the market value of a bond issuance determined?
By adding the face value of the principal amount to the stated value of the interest payments. |
By computing the present value of the principal. |
By computing the present value of the interest payments. |
By adding the present value of the principal amount to the present value of the interest payments. |
Practice Question 30
If the contractual rate of interest is lower than the market rate of interest, bonds will sell at a premium.
True |
False |
Practice Question 35
What is the effect of amortizing a bond discount?
It decreases bond interest expense. |
It increases the carrying value of the bonds. |
It decreases the maturity value of the bonds. |
There is no effect on the bond interest expense. |
Practice Question 31
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. |
The contractual interest rate and the market interest rate are the same. |
The market interest rate exceeds the contractual interest rate. |
No relationship exists between the market and contractual rates. |
Practice Question 34
When a bond is sold at a premium, at what amount is it reported on the balance sheet?
Premium value |
Market value |
Interest value |
Carrying value |
Practice Question 36
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?
Face value |
A premium |
A discount |
Par |
Practice Question 46
Which of the following is not a commonly used method of presenting current liabilities on the balance sheet?
Listing currently maturing long-term debt first. |
Listing current debt in the order of oldest first and then chronologically. |
In order of magnitude or size. |
In order of their maturity. |