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Test Bank for Accounting Principles, 15th Edition by Jerry J. Weygandt, Paul D. Kimmel | Complete Chapters
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Test Bank for Accounting Principles, 15th Edition 15e by Jerry J. Weygandt, Paul D. Kimmel, Jill E. Mitchell. Full Chapters test bank are included with answers, Chapter 1 to 27 Plus Appensix G. All chapters includes Multiple Choice Questions, True False, Exercises and Problems with Answers, Short ...

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  • June 23, 2024
  • 3174
  • 2023/2024
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Test Bank for Accounting Principles, 15th Edition by Jerry J. Weygandt, Paul D.
Kimmel

Accounting Principles, 15e (Weygandt)
Appendix G Time Value of Money Complete Chapters ✅
1) Interest is the difference between the amount borrowed and the principal.
Answer: FALSE
Diff: 1
LO: 1. Compute interest and future values.
Bloom/IFRS: K
AACSB/IMA: None/Investment Decisions
AICPA: BB: None; FC: Measurement Analysis and Interpretation; PC: Project Management
Min.: 1

2) Compound interest is computed on the principal and any interest earned that has not been paid
or received.
Answer: TRUE
Diff: 1
LO: 1. Compute interest and future values.
Bloom/IFRS: K
AACSB/IMA: None/Investment Decisions
AICPA: BB: None; FC: Measurement Analysis and Interpretation; PC: Project Management
Min.: 1

3) The future value of a single amount is the value at a future date of a given amount invested
now, assuming compound interest.
Answer: TRUE
Diff: 1
LO: 1. Compute interest and future values.
Bloom/IFRS: K
AACSB/IMA: None/Investment Decisions
AICPA: BB: None; FC: Measurement Analysis and Interpretation; PC: Project Management
Min.: 1

4) When the periodic payments are not equal in each period, the future value can be computed
by using a future value of an annuity table.
Answer: FALSE
Diff: 1
LO: 1. Compute interest and future values.
Bloom/IFRS: C
AACSB/IMA: None/Investment Decisions
AICPA: BB: None; FC: Measurement Analysis and Interpretation; PC: Project Management
Min.: 1




1

,5) The process of determining the present value is referred to as discounting the future amount.
Answer: TRUE
Diff: 1
LO: 2. Compute present values.
Bloom/IFRS: K
AACSB/IMA: None/Investment Decisions
AICPA: BB: None; FC: Measurement Analysis and Interpretation; PC: Project Management
Min.: 1

6) A higher discount rate produces a higher present value.
Answer: FALSE
Diff: 1
LO: 2. Compute present values.
Bloom/IFRS: K
AACSB/IMA: None/Investment Decisions
AICPA: BB: None; FC: Measurement Analysis and Interpretation; PC: Project Management
Min.: 1

7) In computing the present value of an annuity, it is not necessary to know the number of
discount periods.
Answer: FALSE
Diff: 1
LO: 2. Compute present values.
Bloom/IFRS: C
AACSB/IMA: None/Investment Decisions
AICPA: BB: None; FC: Measurement Analysis and Interpretation; PC: Project Management
Min.: 1

8) The present value of a long-term note or bond is a function of two variables.
Answer: FALSE
Diff: 1
LO: 2. Compute present values.
Bloom/IFRS: K
AACSB/IMA: None/Investment Decisions
AICPA: BB: None; FC: Measurement Analysis and Interpretation; PC: Project Management
Min.: 1

9) The present value of an annuity is the value now of a series of future receipts or payments,
discounted assuming compound interest.
Answer: TRUE
Diff: 1
LO: 2. Compute present values.
Bloom/IFRS: K
AACSB/IMA: None/Investment Decisions
AICPA: BB: None; FC: Measurement Analysis and Interpretation; PC: Project Management
Min.: 1


2

,10) The decision to make long-term capital investments is best evaluated without recognizing the
time value of money.
Answer: FALSE
Diff: 1
LO: 3. Compute the present value in capital budgeting situations.
Bloom/IFRS: K
AACSB/IMA: None/Investment Decisions
AICPA: BB: None; FC: Measurement Analysis and Interpretation; PC: Project Management
Min.: 1

11) In a capital budgeting decision, a positive net present value means the decision to invest
should be accepted.
Answer: TRUE
Diff: 1
LO: 3. Compute the present value in capital budgeting situations.
Bloom/IFRS: K
AACSB/IMA: None/Investment Decisions
AICPA: BB: None; FC: Measurement Analysis and Interpretation; PC: Project Management
Min.: 1

12) With a financial calculator, one can solve for any interest rate or for any number of periods
in a time value of money problem.
Answer: TRUE
Diff: 1
LO: 4. Use a financial calculator to solve time value of money problems.
Bloom/IFRS: K
AACSB/IMA: None/Investment Decisions
AICPA: BB: None; FC: Measurement Analysis and Interpretation; PC: Project Management
Min.: 1

13) Compound interest is the return on principal
A) only.
B) for one or more periods.
C) plus interest for two or more periods.
D) for one period.
Answer: C
Diff: 1
LO: 1. Compute interest and future values.
Bloom/IFRS: K
AACSB/IMA: None/Investment Decisions
AICPA: BB: None; FC: Measurement Analysis and Interpretation; PC: Project Management
Min.: 1




3

, 14) The factor 1.08160 is taken from the 4% column and 2 periods row in a certain table. From
what table is this factor taken?
A) Future value of 1
B) Future value of an annuity of 1
C) Present value of 1
D) Present value of an annuity of 1
Answer: A
Diff: 2
LO: 1. Compute interest and future values.
Bloom/IFRS: C
AACSB/IMA: None/Investment Decisions
AICPA: BB: None; FC: Measurement Analysis and Interpretation; PC: None
Min.: 1

15) If $40,000 is deposited in a savings account paying interest of 4% compounded annually,
what amount will be in the account at the end of 5 years?
A) $32,878
B) $48,000
C) $48,620
D) $48,666
Answer: D
Explanation: $40,000 × 1.21665 = $48,666
Present value × FVIF (n = 5 periods, i = 4%) = Future value
Diff: 2
LO: 1. Compute interest and future values.
Bloom/IFRS: AP
AACSB/IMA: Analytic/Investment Decisions
AICPA: BB: None; FC: Measurement Analysis and Interpretation; PC: None
Min.: 2

16) The future value of 1 factor will always be
A) equal to 1.
B) greater than 1.
C) less than 1.
D) equal to the interest rate.
Answer: B
Diff: 1
LO: 1. Compute interest and future values.
Bloom/IFRS: K
AACSB/IMA: None/Investment Decisions
AICPA: BB: None; FC: Measurement Analysis and Interpretation; PC: Project Management
Min.: 1




4

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