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Quiz 4 Financial Accouting II




Question;Quiz 4 Financial Accouting II1. If a $6,000, 10 percent, 10-year bond was issued at 104 on October 1, 2011, how much interest expense will accrue on December 31 if interest payments are made annually?A) None B) $144 C) $150 D) $500 2.The rate of interest that is printed on the bond is called the __________ rate of interest.A) stated B) market C) variable D) maturity 3.By NOT accruing warranty expense:A) reported liabilities will be overstated and net income will be understated. B) reported expenses will be overstated and reported liabilities will be understated. C) reported liabilities will be understated and net income will be overstated. D) reported expenses will be understated and net income will be understated. 4.If the market rate of interest is greater than the bond?s stated rate of interest, the bond will be issued at:A) a discount. B) par. C) a premium. D) maturity value. 5.A $150,000 bond issue sold at 93.8 will cost:A) whatever cost is negotiated. B) $150,000. C) $159,300. D) $140,700. 6.A convertible Bond:A) Allows the holder to trade the bond for a set number of common sharesB) Converts to a premium or discount at the date of saleC) Converts the stated or coupon rate to the market rate of interestD) Automatically becomes common stock at the maturity date7.The Debt Ratio:A) Show what portion of the assets of a company are financed by ownersB) Indicates the company?s ability to take on more debtC) Is calculated by dividing long term debt by total equityD) Shows the return on all long term liabilities8.Bonds are issued by:A) Local government entitiesB) CorporationsC) The federal governmentD) All of the above9.Bonds issued at a premium:A) Will decrease the interest expense of the companyB) Means the bond sold at a gainC) Are more attractive to investors than a bond sold at face valueD) Will be redeemed before the maturity date10.The debt ratio is calculated by dividing:A) Current liabilities by assetsB) Total liabilities by total equityC) Total liabilities by total assetsD) Current liabilities by net income


Paper#39737 | Written in 18-Jul-2015

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