The solution to this problem requires time value of money calculations. Reference to
Tables 9-1 through 9-4 in the text is necessary to complete the calculations. If interest is
compounded annually, the total amount of interest on an $18,000 note payable for 4
years at 10% is
a. $5,706
b. $7,200
c. $8,352
d. $8,500
The solution to this problem requires time value of money calculations. Reference to
Tables 9-1 through 9-4 in the text is necessary to complete the calculations. The future
value of $6,000 at 12% compounded quarterly for 5 years is
a. $ 6,954
b. $ 9,600
c. $10,572
d. $10,836
What is the name for the balance sheet under international accounting standards?
a. Assets and Equity Attributable to Shareholders
b. Statement of Financial Position
c. Statement of Balance
d. The Equitable Claims Statement
When borrowing money to be repaid in regular future payments, the payment is based
on the present value of the loan, the interest rate and the length of the loan.
a. True
b. False
Meta Inc. pays $18,000 to buy stock in another company and an additional $350 in
commissions. Three months later, Meta sells the stock for $19,000. At the time of sale,
Meta will recognize a:
a. A $650 loss
b. A $1,000 gain
c. A $350 loss
d. A $650 gain
Match the selected items from a classified balance sheet and multiple-step income state
ment to the section in which they would appear on the classified balance sheetor the inc
ome statement.
a. Current Assets (balance sheet)
b. Property, Plant, & Equipment (balance sheet)
c. Current Liabilities (balance sheet)
d. Long-term Liabilities (balance sheet)
e. Stockholders’ Equity (balance sheet)
f. Operating Revenue (income statement)
g. Operating Expenses (income statement)
h. Other Revenue & Expenses (income statement)
i. Income Taxes (income statement)
Bonds payable
When an entity’s revenues exceed its expenses for a period of time, the entity will report
a net loss.
a. True
b. False
Bonds are typically issued in denominations of $10,000.
a. True
b. False
Which of the following would not be considered to be an intangible asset?
a. Franchises
b. Copyrights
c. Investments
d. Goodwill
Which of the following accounts would not appear on the balance sheet of a lessee
company recording a capital lease?
a. Accumulated depreciation on the leased asset
b. Lease obligation in the current liability section
c. Lease obligation in the long-term liability section
d. Rent expense on the income statement
Debit and credit would best be described asterms.
a. abnormal
b. increasing/decreasing
c. quantitative
d. locational
a. A receivable arising from the sale of goods or services with a verbal promise to pay.
b. A form used to categorize the various individual accounts receivable according to the
length of time each has been outstanding.
c. A method of estimating bad debts on the basis of either the net credit sales of the
period or the accounts receivable at the end of the period.
d. A measure of the number of times receivables are collected in a period.
e. The general ledger account that is supported by a subsidiary ledger.
f. A contra-asset account used to reduce accounts receivable to its net realizable value.
g. The detail for a number of individual items that collectively make up a single general
ledger account.
h. The recognition of bad debts expense at the point an account is written off as
uncollectible. Direct write-off method
What is substance over form and how does this concept relate to the presentation of
preferred stock?
What is meant by a company’s “long-term financial health”? Which side of the balance
sheet is more informative for this issue? Explain.
On January 1, 2015, Davin Avenue Associates, Inc. purchased a copier for $6,000 cash
and decided to depreciate it over 5 years. What amounts associated with the copier will
appear on Davin’s financial statements for the year ending December 31, 2015?
Statements prepared monthly, quarterly, or at other intervals less than a year in duration
are called
_____________________.
The IFRS definition of cash equivalents is very similar to that used by.
___________________ statements recast all items on the statement as a percentage of a
selected item on the statement.
Explain the relationship between the valuation of inventory and income measurement as
it relates to the balance sheet and the income statement.