Intermediate Accounting II- Exam I Review – With Questions & All Correct Answers (Rated A+)
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Course
Intermediate Accounting
Institution
Intermediate Accounting
Intermediate Accounting II- Exam I Review – With Questions & All Correct Answers (Rated A+)
Intermediate Accounting II- Exam I Review – With Questions & All Correct Answers (Rated A+)
The most common type of liability is: - ANSWER - One to be paid in cash and for which the amount and timing...
, Intermediate Accounting II- Exam I
Review – With Questions & All Correct
Answers (Rated A+)
The most common type of liability is: - ANSWER - One to be paid in cash and for
which the amount and timing are known
Which of the following is the BEST definition of a current liability? - ANSWER - An
obligation expected to be satisfied with current assets or by the creation of other
current liabilities
Which of the following is NOT a liability? - ANSWER - An unused line of credit
Current liabilities normally are recorded at their: - ANSWER - Maturity amount
The rate of interest printed on the face of a note payable is called the: - ANSWER -
Stated rate
Jane's Donuc Co. borrowed $200,000 on January 1, 2011, and signed a two-year
note bearing interest at 12%. Interest is payable in full at maturity on January 1,
2013. In connection with this note, Jane should report interest expense at December
31, 2011, in the amount of: - ANSWER - $24,000
When a deposit on returnable containers is forfeited, the firm holding the deposit will
experience: - ANSWER - An increase in revenue
Interst expense is: - ANSWER - The effective interest rate times the amount of the
debt outstanding during the interest period
Bonds usually sell at their: - ANSWER - Present value
Straight-line amortization of bond discount or premium: - ANSWER - Provides the
same total amount of interest expense over the life of the bond issue as does the
effective interest method
LPC issued the bonds: - ANSWER - At a premium
What is the annual stated interest rate on the bonds? - ANSWER - 7%
What is the effective interest rate on the bonds? - ANSWER - 6%
On January 1, 2011, Solo Inc. issued 1,000 of its 8% bonds at 98. Interest is payable
semiannually on January 1 and July 1. The bonds mature on January 1, 2021. Solo
paid $50,000 in bond issue costs. Solo uses straight-line amortization. The amount
of interest expense for the year is: - ANSWER - $82,000
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