CHAPTER 6
ACCOUNTING AND THE TIME VALUE OF MONEY
IFRS questions are available at the end of this chapter.
TRUEFALSE
—Conceptual
Answer
No.
Description
F
1.
Time value of money.
T
2.
Definition of interest expense.
F
3.
Simple interest.
T
4.
Compound interest.
T
5.
Compound interest.
F
6.
Future value of an ordinary annuity.
F
7.
Present value of an annuity due.
T
8.
Compounding period interest rate.
T
9.
Definition of present value.
T
10.
Future value of a single sum.
F
11.
Determining present value.
F
12.
Present value of a single sum.
F
13.
Annuity due and interest.
T
14.
Annuity due and ordinary annuity.
T
15.
Annuity due and ordinary annuity.
T
16.
Number of compounding periods.
F
17.
Future value of an annuity due factor.
T
18.
Present value of an ordinary annuity.
F
19.
Future value of a deferred annuity.
T
20.
Determining present value of bonds.
MULTIPLE CHOICE
—Conceptual
Answer
No.
Description
a
21.
Appropriate use of an annuity due table.
d
22.
Time value of money.
b
23.
Present value situations.
a
24.
Definition of interest.
c
25.
Interest variables.
d
26.
Identification of compounding approach.
b
27.
Future value factor.
b
28.
Understanding compound interest tables.
a
29.
Identification of correct compound interest table.
d
30.
Identification of correct compound interest table.
c
31.
Identification of correct compound interest table.
c
32.
Identification of correct compound interest table.
b
33.
Identification of correct compound interest table.
c
34.
Identification of present value of 1 table.
c
S
35.
Identification of correct compound interest table.
a
S
36.
Identification of correct compound interest table.
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Test Bank for Intermediate Accounting, Thirteenth Edition
MULTIPLE CHOICE
—Conceptual
(cont.)
Answer
No.
Description
a
S
37.
Present value of an annuity due table.
c
P
38.
Definition of an annuity due.
a
P
39.
Identification of compound interest concept.
d
P
40.
Identification of compound interest concept.
d
41.
Identification of number of compounding periods.
a
42.
Adjust the interest rate for time periods.
d
43.
Definition of present value.
c
P
44.
Compound interest concepts.
a
45.
Difference between ordinary annuity and annuity due.
c
46.
Future value of 1 and present value of 1 relationship.
b
47.
Identify future value of 1 concept.
d
48.
Determine best bonus option
d
49.
Identify future value of an ordinary annuity
b
50.
Identify future value of an ordinary annuity
c
P
51.
Future value of an annuity due factor.
c
52.
Determine the timing of rents of an annuity due.
b
53.
Factors of an ordinary annuity and an annuity due.
c
54.
Determine present value of an ordinary annuity.
b
55.
Identification of a future value of an ordinary annuity of 1.
b
56.
Present value of an ordinary annuity and an annuity due.
b
57.
Difference between an ordinary annuity and an annuity due.
b
58.
Present value of ordinary annuity and present value of annuity due
relationship
c
59.
Identify present value of ordinary annuity concept.
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