Question 1
A current liability must be paid out of current earnings.
Question 2
Most notes are not interest bearing.
Question 3
Unearned revenues are received before goods are delivered or services are rendered.
Question 4
The carrying value of bonds is calculated by adding the balance of the Discount on Bonds
Payable account to the balance in the Bonds Payable account.
Question 5
Material gains or losses on bond redemption are reported as an extraordinary item on the income
statement.
Question 6
Liabilities are classified on the balance sheet as current or
Question 7
With an interest-bearing note, the amount of assets received upon issuance of the note is
generally
Question 8
The interest charged on a $70,000 note payable, at the rate of 6%, on a 90-day note would be
Question 9
On January 1, 2014, Keisler Company, a calendar-year company, issued $700,000 of notes
payable, of which $175,000 is due on January 1 for each of the next four years. The proper
balance sheet presentation on December 31, 2014, is
Question 10
Norlan Company does not ring up sales taxes separately on the cash register. Total receipts for
October amounted to $29,400. If the sales tax rate is 5%, what amount must be remitted to the
state for October's sales taxes?
Question 11
Stockholders of a company may be reluctant to finance expansion through issuing more equity
because
Question 12
Which of the following is not an advantage of issuing bonds instead of common stock?
Question 13