Test Bank for Financial and Managerial Accounting, 5th Edition by Jerry J. Weygandt, Paul D. Kimmel | Complete Chapters
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Course
Financial and Managerial Accounting
Institution
Financial And Managerial Accounting
Complete test bank for Financial and Managerial Accounting 5e 5th Edition by Jerry J. Weygandt, Paul D. Kimmel. This PDF document includes Multiple Choice questions, True False, Problems questions, all answers are included.
Chapter 1: Accounting in Action
Chapter 2: The Recording Process
Chapt...
Test Bank for Financial and Managerial Accounting, 5th Edition by Jerry J.
Weygandt, Paul D. Kimmel
Financial and Managerial Accounting, 5e (Weygandt)
Appendix G Time Value of Money
1) Interest is the difference between the amount borrowed and the principal.
Answer: FALSE
Diff: 1
LO: 1
Bloom / IFRS: K
AACSB/ IMA: Reflective Thinking / Investment Decision
AICPA: BB: Resource Management; FC: Measurement; PC: Project Management
Minutes: 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
Bloom / IFRS: K
AACSB/ IMA: Reflective Thinking / Investment Decision
AICPA: BB: Resource Management; FC: Measurement; PC: Project Management
Minutes: 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
Bloom / IFRS: K
AACSB/ IMA: Reflective Thinking / Investment Decision
AICPA: BB: Resource Management; FC: Measurement; PC: Project Management
Minutes: 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
Bloom / IFRS: C
AACSB/ IMA: Reflective Thinking / Investment Decision
AICPA: BB: Resource Management; FC: Measurement; PC: Project Management
Minutes: 1
1
,5) The process of determining the present value is referred to as discounting the future amount.
Answer: TRUE
Diff: 1
LO: 2
Bloom / IFRS: K
AACSB/ IMA: Reflective Thinking / Investment Decision
AICPA: BB: Resource Management; FC: Measurement; PC: Project Management
Minutes: 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
Bloom / IFRS: C
AACSB/ IMA: Reflective Thinking / Investment Decision
AICPA: BB: Resource Management; FC: Measurement; PC: Project Management
Minutes: 1
8) The present value of a long-term note or bond is a function of two variables.
Answer: FALSE
Diff: 1
LO: 2
Bloom / IFRS: K
AACSB/ IMA: Reflective Thinking / Investment Decision
AICPA: BB: Resource Management; FC: Measurement; PC: Project Management
Minutes: 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
Bloom / IFRS: K
AACSB/ IMA: Reflective Thinking / Decision Analysis
AICPA: BB: Resource Management; FC: Measurement; PC: Project Management
Minutes: 1
2
,10) 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
Bloom / IFRS: K
AACSB/ IMA: Reflective Thinking / Decision Analysis
AICPA: BB: Resource Management; FC: Measurement; PC: Project Management
Minutes: 1
11) 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
Bloom / IFRS: K
AACSB/ IMA: Reflective Thinking / Investment Decision
AICPA: BB: Resource Management; FC: Measurement; PC: Project Management
Minutes: 1
12) The factor 1.0609 is taken from the 3% 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
Bloom / IFRS: C
AACSB/ IMA: Analytic / Investment Decisions
AICPA: BB: Resource Management; FC: Measurement; PC: Problem Solving/Decision
Making
Minutes: 1
3
, 13) If $40,000 is put in a savings account paying interest of 4% compounded annually, what
amount will be in the account at the end of five years?
A) $32,878
B) $48,000
C) $48,620
D) $48,666
Answer: D
Explanation: 1.21665 × $40,000 = $48,666
(FVIF n= 5, i = 4% × PV) = FV
Diff: 2
LO: 1
Bloom / IFRS: AP
AACSB/ IMA: Analytic / Quantitative Methods
AICPA: BB: Resource Management; FC: Measurement; PC: Problem Solving/Decision
Making
Minutes: 2
14) 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
Bloom / IFRS: K
AACSB/ IMA: Reflective Thinking / Investment Decision
AICPA: BB: Resource Management; FC: Measurement; PC: Project Management
Minutes: 1
15) All of the following are necessary to compute the future value of a single amount except the
A) interest rate.
B) number of periods.
C) principal.
D) maturity value.
Answer: D
Diff: 1
LO: 1
Bloom / IFRS: K
AACSB/ IMA: Reflective Thinking / Investment Decision
AICPA: BB: Resource Management; FC: Measurement; PC: Project Management
Minutes: 1
4
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