9- Multiple Choice Question 76
When an interest-bearing note matures, the balance in the Notes Payable account is
less than the total amount repaid by the borrower.
the difference between the maturity value of the note and the face value of the note.
equal to the total amount repaid by the borrower. greater than the total amount repaid by the borrower 10-Multiple Choice Question 125
From the standpoint of the issuing company, a disadvantage of using bonds as a means of long-term financing is that
interest must be paid on a periodic basis regardless of earnings. the bondholders do not have voting rights.
income to stockholders may increase as a result of trading on the equity.
bond interest is deductible for tax purposes. 11-Multiple Choice Question 194 The times interest earned ratio is computed by dividing income before interest expense by interest expense. net income by interest expense. income before income taxes and interest expense by interest expense. income before income taxes by interest expense.