Acc 211 ch 13-15

Acc 211 ch 13-15 - Multiple Choice. Write the letter of the...

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Multiple Choice. Write the letter of the best answer. 3 points each. 1._____ Interest expense is: A) The effective interest rate times the amount of the debt outstanding during the interest period. B) The stated interest rate times the amount of the debt outstanding during the interest period. C) The effective interest rate times the face amount of the debt. D) The stated interest rate times the face amount of the debt. 2._____ In theory, the proceeds from the sale of a bond issue will be equal to: A) The face amount of the bond. B) The total of the face amount plus all interest payments. C) The present value of the face amount plus the present value of the stream of interest payments. D) The face amount of the bond plus the present value of the stream of interest payments 3._____Bond X and bond Y are both issued by the same company. Each of the bonds has a maturity value of $100,000 and each mature in 10 years. Bond X pays 8% interest while bond Y pays 9% interest. The current market rate of interest is 8%. Which of the following is correct? A) Both bonds will sell for the same amount. B) Bond X will sell for more than bond Y. C) Bond Y will sell for more than bond X. D) Both bonds will sell at a discount. 4._____Distinguishing between operating and capital leases is due in large part to the accounting concept of: A) Conservatism. B) Materiality. C) Substance over form. D) Historical cost. 5._____ When a lease qualifies as a capital lease, what is the cost basis of the asset acquired? A) The present value of the minimum lease payments, exclusive of executory costs.
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This note was uploaded on 03/14/2010 for the course ACC 690 taught by Professor Smith during the Spring '10 term at Malone University.

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Acc 211 ch 13-15 - Multiple Choice. Write the letter of the...

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