ACC291 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

possible.
shorter.
probable.
longer

Practice Question 05

Which one of the following is not a typical current liability?

Current maturities of long-term debt
Interest payable
Mortgages payable
Salaries payable

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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
$3,540
$2,655
$4,425

Practice Question 25

How is the market value of a bond issuance determined?

By computing the present value of the interest payments.
By adding the face value of the principal amount to the stated value of the interest payments.
By adding the present value of the principal amount to the present value of the interest payments.
By computing the present value of the principal

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?

There is no effect on the bond interest expense.
It increases the carrying value of the bonds.
It decreases the maturity value of the bonds.
It decreases 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 market interest rate exceeds the contractual interest rate.
The contractual interest rate exceeds the market interest rate.
No relationship exists between the market and contractual rates.
The contractual interest rate and the market interest rate are the same

Practice Question 34

When a bond is sold at a premium, at what amount is it reported on the balance sheet?

Market value
Carrying value
Premium value
Interest 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?

A discount
A premium
Par
Face value

Practice Question 46

Which of the following is not a commonly used method of presenting current liabilities on the balance sheet?

In order of magnitude or size.
Listing current debt in the order of oldest first and then chronologically.
In order of their maturity.
Listing currently maturing long-term debt first.

Course: ACC291 Principles Of Accounting II
School: University of Phoenix

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