question

The accounts that represent the resources of the company are called: A. Liabilities. B. Revenues. C. Expenses. D. Assets.

answer

A) Liabilities

question

An alternative form of the accounting equation is: A. Net Income = Revenues - Expenses. B. Stockholders' Equity = Assets + Liabilities. C. Assets = Liabilities - Stockholders' Equity. D. Assets - Liabilities = Stockholders' Equity

answer

D) Assets - Liabilities = Stockholders Equity

question

Creditors' claims to a corporation's resources are referred to as: A. Dividends. B. Assets. C. Liabilities. D. Stockholders' equity

answer

C) Liabilities

question

Which of the following best describes revenue? A. Resources of a company. B. Amounts earned from providing goods and services to a customer. C. Cash received from a customer. D. Dividends paid to stockholders.

answer

B) Amounts Earned From Providing Goods and Services to a Customer

question

Transactions related to the primary business activities of the company, such as selling goods and services to customers, are referred to as: A. Investing activities. B. Operating activities. C. Management activities. D. Financing activities.

answer

B) Operating Activities

question

The costs of providing goods and services to customers are referred to as: A. Assets. B. Expenses. C. Liabilities. D. Revenues

answer

B) Expenses

question

Which of the following items would not appear in an income statement? A. Salaries expense. B. Advertising expense. C. Service revenue. D. Cash

answer

D) Cash

question

The equation best describing the balance sheet is: A. Assets = Liabilities + Stockholders' Equity. B. Revenues - Expenses = Net Income. C. Ending Retained Earnings + Dividends = Net Income. D. Revenues + Expenses = Net Income

answer

A) Assets = Liabilities + Stockholders Equity

question

Use the following appropriate amounts to calculate net income: Revenues, $12,000; Liabilities, $5,000; Expenses, $4,000; Assets, $19,000; Dividends, $4,000. A. $6,000. B. $8,000. C. $4,000. D. $14,000.

answer

B) 8,000

question

The financial statement that represents activity over the entire life of the company is the: A. Income statement. B. Balance sheet. C. Statement of financial accounting. D. Statement of cash flows.

answer

B) Balance Sheet

question

Liabilities normally carry a _______ balance and are shown in the ______________. A. Debit; Statement of stockholders' equity. B. Debit; Income statement. C. Credit; Balance sheet. D. Debit; Balance Sheet.

answer

C) Credit; Balance Sheet

question

Which of the following accounts would normally have a debit balance? A. Accounts Payable, Service Revenue, Common Stock. B. Salaries Payable, Unearned Revenue, Utilities Expense. C. Income Tax Payable, Service Revenue, Dividends. D. Cash, Delivery expense, Dividends.

answer

D

question

13. Which of the following accounts would normally have a credit balance? A. Accounts Payable, Service Revenue, Common Stock. B. Salaries Payable, Unearned Revenue, Delivery Expense. C. Income Tax Payable, Service Revenue, Dividends. D. Cash, Repairs and Maintenance Expense, Dividends

answer

A)

question

14. Childers Service Company provides services to customers totaling $3,000, for which it billed the customers. How would the transaction be recorded? A. Debit Cash $3,000, credit Service Revenue $3,000. B. Debit Accounts Receivable $3,000, credit Service Revenue $3,000. C. Debit Accounts Receivable $3,000, credit Cash $3,000. D. Debit Service Revenue $3,000, credit Accounts Receivable $3,000.

answer

B) Debit Accounts Receivable $3,000, Credit Service Revenue $3,000

question

15. A company received a bill for newspaper advertising services, $400. The bill will be paid in 10 days. How would the transaction be recorded today? A. Debit Advertising Expense $400, credit Accounts Payable $400. B. Debit Accounts Payable $400, credit Advertising Expense $400. C. Debit Accounts Payable $400, credit Cash $400. D. Debit Advertising Expense $400, credit Cash $400.

answer

A) Debit Advertising Expense $400. Credit Accounts Payable $400

question

16. Assume that $18,000 cash is paid for insurance to cover the next year. The appropriate debit and credit are: A. Debit Insurance Expense $18,000, credit Prepaid Insurance $18,000. B. Debit Prepaid Insurance $18,000, credit Insurance Expense $18,000. C. Debit Prepaid Insurance $18,000, credit Cash $18,000. D. Debit Cash $18,000, credit Prepaid Insurance $18,000.

answer

C) Debit Prepaid Insurance $18,000, credit Cash $18,000

question

17. Daniel Dino Restaurant owes employee salaries of $15,000. This would be recorded as: A. Debit Salaries Expense, credit Cash. B. Debit Salaries Payable, credit Cash. C. Debit Salaries Expense, credit Salaries Payable. D. Debit Salaries Payable, credit Salaries Expense

answer

C) Debit Salaries Expense, credit Salaries Payable

question

Posting is the process of: A. Analyzing the impact of the transaction on the accounting equation. B. Obtaining information about external transactions from source documents. C. Transferring the debit and credit information from the journal to individual accounts in the general ledger. D. Listing all accounts and their balances at a particular date.

answer

C) Transferring the debit and credit information from the journal to individual accounts in the general ledger

question

19. For each transaction recorded in an accounting system, the basic equation that must be maintained at all times is: A. Assets = Liabilities + Stockholders' Equity. B. Cash Increases = Cash Decreases. C. Revenues = Expenses + Dividends. D. Assets = Liabilities.

answer

A) Assets = Liabilities + Stockholders Equity

question

20. Which of the following would increase assets and increase liabilities? A. Provide services to customers on account. B. Purchase office supplies on account. C. Pay dividends to stockholders. D. Receive a utility bill but do not pay it immediately

answer

B) Purchase office supplies on account

question

21. The revenue recognition principle states that: A. Revenue should be recognized in the period the cash is received. B. Revenue should be recognized in the period earned. C. Revenue should be recognized in the balance sheet. D. Revenue is a component of common stock.

answer

B) Revenue should be recognized in the period earned

question

22. The matching principle is the principle that states: A. All costs that are used to generate revenue are recorded in the period the revenue is recognized. B. All transactions are recorded at the exchange price. C. The business is separate from its owners. D. The business will continue to operate indefinitely unless there is evidence to the contrary.

answer

A) All costs that are used to generate revenue are recorded in the period the revenue is recognized

question

23. Adjusting entries are primarily needed for: A. Cash-basis accounting. B. Accrual-basis accounting. C. Current value accounting. D. Manual accounting systems.

answer

B) Accrual-basis accounting

question

24. Permanent accounts would not include: A. Accounts Payable. B. Office Supplies. C. Utilities Expense. D. Common Stock.

answer

C) Utilities Expense

question

25. Temporary accounts would not include: A. Salaries Payable. B. Advertising Expense. C. Supplies Expense. D. Dividends

answer

A) Salaries Payable

question

26. The purpose of closing entries is to transfer: A. Accounts Receivable to Retained Earnings when an account is fully paid. B. Balances in temporary accounts to a permanent account. C. Inventory to Cost of Goods Sold when merchandise is sold. D. Assets and liabilities when operations are discontinued.

answer

B) Balances in temporary accounts to a permanent account

question

The primary difference between accrual-basis and cash-basis accounting is: A. The timing of when revenues and expenses are recorded. B. Cash-basis accounting is allowed for financial reporting purposes but not accrual-basis accounting. C. Accrual-basis accounting violates both the revenue recognition and matching principles. D. Adjusting entries are only a necessary part of cash-basis accounting. .

answer

A) The timing of when revenues and expenses are recorded

question

Yummy Foods purchased a one-year hazard insurance policy on August 1 and recorded the $4,200 premium to prepaid insurance. At its December 31 year-end, Yummy Foods would record which of the following adjusting entries? A. Option a. B. Option b. C. Option c. D. Option d.

answer

A) Insurance expense $1750, prepaid insurance $1750

question

29. On April 1, a $4,800 premium on a one-year insurance policy on equipment was paid and charged to Prepaid Insurance. At the end of the year, the financial statements would report: A. Insurance Expense, $4,800; Prepaid Insurance $0. B. Insurance Expense, $3,600; Prepaid Insurance $1,200. C. Insurance Expense, $3,650; Prepaid Insurance $4,800. D. Insurance Expense, $1,200; Prepaid Insurance $3,600.

answer

B) Insurance Expense, $3,600; Prepaid Insurance $1,200

question

31. What key piece of legislation was passed in response to corporate accounting scandals by Enron, WorldCom, and others? A. Sarbanes-Oxley Act. B. 1933 Securities Act. C. 1934 Securities Exchange Act. D. Regulation Fair Disclosure.

answer

A) Sarbanes- Oxley Act

question

32. Cash may not include: A. Foreign currency. B. Money orders. C. Accounts receivable. D. Undeposited customer checks.

answer

D) Undeposited customer checks

question

33. Which of the following would NOT represent good controls over cash receipts? A. Record all cash receipts as soon as possible. B. The employee that receives cash and checks should also deposit them in the bank. C. Open mail each day and make a list of checks received with the amount and payer's name. D. Verify cash receipts by comparing the bank deposit slip with the accounting records.

answer

B) The employee that receives cash and checks should also deposit them in the bank

question

34. Which of the following is NOT a reason why a bank reconciliation is necessary? A. The company has transactions that the bank has not recorded. B. Petty cash has a low balance. C. The bank has transactions that the company has not recorded. D. Reconciliations provide a control over cash.

answer

B) Petty cash has a low balance

question

35. The following information was taken from the bank reconciliation for Mooner Sooner Inc. at the end of the year: Bank balance: $8,000 Checks outstanding: $5,800 Note collected by the bank: $1,500 Service fee: $20 Deposits outstanding: $4,000 NSF check (bad check) returned for $300 What is the correct cash balance that should be reported in Mooner Sooner's balance sheet at the end of the year? A. $10,200. B. $7,400. C. $6,200. D. $6,160.

answer

C) $6,200

question

36. The following data were obtained from the bank statement and from the process of reconciling it: Bank service charges = $20 Deposit outstanding = $150 Interest earned on the bank account = $10 Checks outstanding = $400 Which items should be deducted from and added to the bank balance in completing the reconciliation? A. Deduct checks outstanding; add service charges and deposit outstanding. B. Deduct interest earned; add deposit outstanding. C. Deduct checks outstanding; add deposit outstanding. D. Deduct deposit outstanding; add checks outstanding.

answer

C) Deduct checks outstanding; add deposit outstanding

question

37. After preparing a bank reconciliation, the service fee charged by the bank would be recorded with a: A. Credit to Service Fees Expense. B. Debit to Cash. C. Credit to Service Fees Revenue. D. Debit to Service Fees Expense.

answer

D) Debit to service fees expense

question

38. The statement of cash flows reports cash flows from the activities of: A. Operating, purchasing, and investing. B. Borrowing, paying, and investing. C. Financing, investing, and operating. D. Using, investing, and financing.

answer

C) Financing, investing, and operating

question

39. Operating cash flows would exclude: A. Payment of employee salaries. B. Receipt of cash from customers. C. Payment of dividends. D. Payment for advertising

answer

C) Payment of dividends

question

40. A company's cash balance is reported in which two financial statements? A. Income statement and statement of cash flows. B. Balance sheet and statement of cash flows. C. Income statement and balance sheet. D. Balance sheet and statement of stockholders' equity

answer

B) Balance sheet and statement of cash flows

question

41. Which of the following best describes credit sales? A. Cash sales to customers that are new to the company. B. Sales to customers using credit cards. C. Sales to customers on account. D. Sales with a high risk that the customer will return the product.

answer

C) Sales to customers on account

question

42. Credits sales are recorded as: A. Debit Cash, credit Unearned Revenue. B. Debit Service Revenue, credit Accounts Receivable. C. Debit Cash, credit Service Revenue. D. Debit Accounts Receivable, credit Service Revenue.

answer

D) Debit Accounts Receivable, credit Service Revenue

question

43. Gershwin Wallcovering Inc. shipped the wrong shade of paint to a customer. The customer agreed to keep the paint upon being offered a 15% price reduction. The price reduction is an example of a: A. Sales revenue. B. Sales discount. C. Sales return. D. Sales allowance.

answer

D) Sales allowance

question

44. When customers purchase products on account, Spitz Manufacturing offers them a 2% reduction in the amount owed if they pay within 10 days. This is an example of a: A. Bad debt. B. Sales discount. C. Sales return. D. Sales allowances.

answer

D) Sales Discount

question

On November 10 of the current year, Flores Mills sold carpet to a customer for $8,000 with credit terms 2/10, n/30. How would Flores record the sale on November 10? A. Option a. B. Option b. C. Option c. D. Option d.

answer

B) 8,000 A/R 8,000 S/R

question

46. Allowance for Uncollectible Accounts is: A. An expense account. B. A contra asset account. C. A contra revenue account. D. A liability account.

answer

B) Contra Asset Account

question

47. Boynton Jewelers reported the following amounts at the end of the year: total sales = $550,000; sales discounts = $12,000; sales returns = $44,000; sales allowances = $17,000. What was the company's net revenues for the year? A. $489,000. B. $485,000. C. $477,000. D. $499,000.

answer

C) $477,000

question

48. McConnell's Bakeries had the following balances on December 31, 2015, before any adjustment: Accounts Receivable = $100,000; Allowance for Uncollectible Accounts = $4,100 (credit). McConnell's estimates uncollectible accounts based on an aging of accounts receivable as shown below What amount of bad debt expense did McConnell's record in its December 31, 2015, adjustment to the allowance account? A. $10,200. B. $12,800. C. $15,300. D. $6,100.

answer

D) $6,100

question

49. When $2,500 of accounts receivable are determined to be uncollectible, which of the following should the company record to write off the accounts using the allowance method? A. A debit to Bad Debt Expense and a credit to Allowance for Uncollectible Accounts. B. A debit to Allowance for Uncollectible Accounts and a credit to Bad Debt Expense. C. A debit to Bad Debt Expense and a credit to Accounts Receivable. D. A debit to Allowance for Uncollectible Accounts and a credit to Accounts Receivable

answer

D) A debit to Allowance for Uncollectible Accounts and a credit to Accounts Receivable

question

50. On September 1, 2015, Middleton Corp. lends cash and accepts a $1,000 note receivable that offers 12% interest and is due in six months. How much interest revenue will Middleton Corp. report during 2015? A. $20. B. $40. C. $30. D. $60

answer

A) $20 (1000x12%x2/12)

question

51. Cost of goods sold equals: A. Beginning inventory - net purchases + ending inventory. B. Beginning inventory + accounts payable - net purchases. C. Net purchases + ending inventory - beginning inventory. D. Beginning inventory + net purchases - ending inventory.

answer

D) Beginning inventory + net purchases - ending inventory

question

52. Given the information below, what is the gross profit? A. $250,000. B. $70,000. C. $220,000. D. $50,000

answer

B) $70,000

question

53. In a perpetual inventory system, at the time of a sale the cost of inventory sold is: A. Debited to Accounts Receivable. B. Credited to Cost of Goods Sold. C. Debited to Cost of Goods Sold. D. Not recorded at the time.

answer

C) Debited to Cost of Goods Sold

question

54. Good, Inc. sold inventory for $1,200 that was purchased for $700. Good records which of the following when it sells inventory using a perpetual inventory system? A. No entry is required for cost of goods sold and inventory. B. Debit Cost of Goods Sold $700; credit Inventory $700. C. Debit Cost of Goods Sold $1,200; credit Inventory $1,200. D. Debit Inventory $700; credit Cost of Goods Sold $700.

answer

B) Debit Cost of Goods Sold $700, credit Inventory $700

question

55. Davis Hardware Company uses a perpetual inventory system. How should Davis record the sale of inventory costing $620 for $960 on account? A. Option a. B. Option b. C. Option c. D. Option d.

answer

B) A/R 960 S/R 960

question

56. Nu Company reported the following data for its first year of operations: What is Nu's gross profit ratio? A. 80%. B. 49%. C. 40%. D. 5%.

answer

C) 40%

question

57. Anthony Corporation reported the following amounts for the year: Anthony's average days in inventory is: A. 170 days. B. 114 days. C. 132 days. D. 151 days.

answer

C) 132 days

question

58. Inventory records for Marvin Company revealed the following: Marvin sold 2,300 units of inventory during the month. Ending inventory assuming FIFO would be: A. $5,140. B. $5,080. C. $5,060. D. $5,050.

answer

A) $5,140

question

59. Inventory records for Dunbar Incorporated revealed the following: Dunbar sold 700 units of inventory during the month. Ending inventory assuming LIFO would be: A. $500. B. $490. C. $470. D. $480

answer

D) $480

question

60. Landon Co. purchased a $500,000 tract of land that is intended to be the site of a new office complex. Landon incurred additional costs and realized salvage proceeds as follows: What would be the capitalized cost of the land? A. $500,000. B. $575,000. C. $580,000. D. $590,000.

answer

C) $580,000

question

61. Wiley Company purchased new equipment for $60,000. Wiley paid cash for the equipment. Other costs associated with the equipment were: transportation costs, $1,000; sales tax paid $3,000; and installation cost, $2,500. The cost recorded for the equipment was: A. $60,000. B. $61,000. C $64,000. D. $66,500.

answer

D) $66,500

question

62. The following financial information is from Cook Company: What is the amount of long-term assets assuming the accounts above reflect normal activity? A. $342,500. B. $173,000. C. $273,500. D. $98,000.

answer

B) $173,000

question

63. The balance sheet of Cattleman's Steakhouse shows assets of $86,400 and liabilities of $15,000. The fair value of the assets is $90,000 and the fair value of its liabilities is $15,000. Longhorn paid Cattleman's $95,000 to acquire it. Longhorn should record goodwill on this purchase of: A. $3,600. B. $5,000. C. $20,000. D. $23,600.

answer

C) 20,000

question

64. Which one of the following regarding the book value of an asset is correct? A. It is the fair value of the asset if the asset is sold. B. It reflects the original cost of the asset less accumulated depreciation. C. It is the original cost of the asset minus the depreciation expense for that asset during the year. D. It is the original cost at which the asset was purchased.

answer

B) It reflects the original cost of the asset less accumulated depreciation.

question

65. Which of the following is considered a "contra" account? A. Unearned Revenue. B. Goodwill. C. Accumulated Depreciation. D. Costs of Good Sold

answer

C) Accumulated Depreciation

question

Kansas Enterprises purchased equipment for $60,000 on January 1, 2015. The equipment is expected to have a five-year life, with a residual value of $5,000 at the end of five years. Using the double-declining balance method, depreciation expense for 2015 would be: A. $24,000. B. $22,000. C. $19,000. D. $20,000.

answer

A) $24,000

question

67. During the first two years, Supplies, Inc. drove the truck 15,000 and 22,000 miles, respectively, to deliver merchandise to its customers. The company originally purchased the truck for $175,000. If the truck has an estimated life of 10 years or 300,000 miles, with an estimated residual value of $25,000, what amount of depreciation expense should Supplies, Inc. record in the second year using the activity-based method? A. $11,000. B. $18,500. C. $7,500. D. $16,000.

answer

A) $11,000

question

68. On January 1, 2013, Jacob Inc. purchased a commercial truck for $48,000 and uses the straight-line depreciation method. The truck has a useful life of eight years and an estimated residual value of $8,000. On December 31, 2015, Jacob Inc. sold the truck for $30,000. What amount of gain or loss should Jacob Inc. record on December 31, 2015? A. Gain, $22,000. B. Loss, $18,000. C. Gain, $5,000. D. Loss, $3,000.

answer

D) Loss $3,000

question

69. The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year, respectively. Net income and sales for the year are $100,000 and $800,000, respectively. What is Hidden Valley's profit margin? A. 10%. B. 12.5%. C. 18%. D. 22%.

answer

B) 12.5% (100,000/800,000)

question

70. Which of the following is not withheld from an employee's salary? A. FICA taxes. B. Federal and state unemployment taxes. C. Federal and state income taxes. D. Employee portion of health insurance.

answer

B) Federal and state unemployment taxes

question

71. Which of the following is true regarding FICA taxes? A. FICA taxes are paid only by the employee. B. FICA taxes are paid only by the employer. C. FICA taxes are paid in equal amounts by the employee and the employer. D. FICA taxes are paid in different amounts by the employee and the employer

answer

C) FICA taxes are paid in equal amounts by the employee and the employer

question

72. Which of the following are not included in an employer's payroll tax expense? A. Employer portion of FICA taxes. B. Federal unemployment taxes. C. State unemployment taxes. D. State income taxes.

answer

D) State income taxes

question

73. Brian Inc. borrowed $8,000 from First Bank and signed a promissory note. What entry should Brian Inc. record? A. Debit Cash, $8,000; Credit Notes Receivable, $8,000. B. Debit Notes Receivable, $8,000; Credit Cash, $8,000. C. Debit Cash, $8,000; Credit Notes Payable, $8,000. D. Debit Notes Payable, $8,000; Credit Cash, $8,000.

answer

C) Debit cash$8,000; Credit Notes Payable, $8,000

question

74. On December 1, 2015, Old World Deli signed a $300,000, 5%, six-month note payable with the amount borrowed plus accrued interest due six months later on June 1, 2016. Old World Deli records the appropriate adjusting entry for the note on December 31, 2015. What amount of cash will be needed to pay back the note payable plus any accrued interest on June 1, 2016? A. $300,000. B. $301,250. C. $306,250. D. $307,500.

answer

D) $307,500

question

75. The sale of gift cards by a company is a direct example of: A. Unearned revenues. B. Sales tax payable. C. Current portion of long-term debt. D. Contingencies.

answer

A) Unearned revenues

question

76. At the beginning of 2015, Angel Corporation began offering a 1-year warranty on its products. The warranty program was expected to cost Angel 4% of net sales. Net sales made under warranty in 2015 were $180 million. Five percent of the units sold were returned in 2015 and repaired or replaced at a cost of $5.3 million. The amount of warranty expense on Angel's 2015 income statement is: A. $5.3 million. B. $7.2 million. C. $9.0 million. D. $27.0 million.

answer

B) $7.2 million

question

77. Discount Travel has the following current assets: cash, $102 million; receivables, $94 million; inventory, $182 million; and other current assets, $18 million. Discount Travel also has the following liabilities: accounts payable, $98 million; current portion of long-term debt, $35 million; and long-term debt, $23 million. Based on these amounts, what is the current ratio? A. 2.54. B. 2.98. C. 4.04. D. 2.84.

answer

B) 2.98

question

78. Discount Travel has the following current assets: cash, $102 million; receivables, $94 million; inventory, $182 million; and other current assets, $18 million. Discount Travel also has the following liabilities: accounts payable, $98 million; current portion of long-term debt, $35 million; and long-term debt, $23 million. Based on these amounts, what is the acid-test ratio? A. 1.47. B. 2.00. C. 2.84. D. 3.86

answer

A) 1.47

question

79. Working capital is A. Current assets divided by current liabilities. B. Current assets minus current liabilities. C. Cash, short-term investments, and accounts receivable divided by current liabilities. D. Cash, short-term investments, and accounts receivable minus current liabilities.

answer

B) Current assets minus current liabilities

question

80. Which of the following is not a primary source of corporate debt financing? A. Bonds Payable. B. Common Stock. C. Leases. D. Notes Payable.

answer

B) common stock

question

81. Interest expense on bonds payable is calculated as the: A. Face amount times the stated interest rate. B. Face amount times the market interest rate. C. Carrying value times the market interest rate. D. Carrying value times the stated interest rate.

answer

D) Carrying value times the stated interest rate

question

82. Which of the following leases is essentially the purchase of an asset with debt financing? A. An operating lease. B. A capital lease. C. Both an operating and a capital lease. D. Neither an operating lease nor a capital lease.

answer

B) A capital lease

question

83. In each succeeding payment on an installment note: A. The amount that goes to decreasing the carrying value of the note increases. B. The amount that goes to decreasing the carrying value of the note decreases. C. The amount that goes to decreasing the carrying value of the note is unchanged. D. The amounts paid for both interest and principal increase proportionately

answer

D) The amounts paid for both interest and principal increase proportionately

question

84. Which of the following statements is correct? A. Bonds are always issued at their face value. B. Bonds issued at more than their face value are said to be issued at a discount. C. Bondholders must hold their bonds until maturity to receive cash for their investment. D. None of these.

answer

C) Bondholders must hold their bonds until maturity to receive cash for their investment

question

85. Discount-Mart issues $10 million in bonds on January 1, 2015. The bonds have a ten-year term and pay interest semiannually on June 30 and December 31 each year. Below is a partial bond amortization schedule for the bonds: What is the carrying value of the bonds as of December 31, 2016? A. $8,834,770. B. $8,686,606. C. $8,734,070. D. $8,783,433.

answer

A) $8,834,770

question

86. X2 issued callable bonds on January 1, 2015. The bonds pay interest annually on December 31 each year. X2's accountant has projected the following amortization schedule from issuance until maturity: X2 issued the bonds for: A. $100,000. B. $107,000. C. $104,212. D. Cannot be determined from the given information.

answer

C) $104,212

question

87. Bonds payable should be reported as a long-term liability in the balance sheet at: A. Face Value. B. Current bond market price. C. Carrying value. D. Face value less accrued interest since the last interest payment date.

answer

D) Face value less accrued interest since the last interest payment date

question

89. The advantages of obtaining long-term funds by issuing bonds, rather than issuing additional common stock, include which of the following? A. Interest payments are tax deductible to the company, while dividends are not. B. The risk of going bankrupt decreases. C. Expansion is achieved without surrendering ownership control. D . Interest payments are tax deductible to the company, while dividends are not; expansion is achieved without surrendering ownership control.

answer

A) Interest payments are tax deductible to the company, while dividends are not

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