Grade Details Unit 8 Review

Grade Details Unit 8 Review - Unit 8: Long-Term Liabilities...

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Unit 8: Long-Term Liabilities and Receivables (Mar 23 - Mar 29) Grade Details: Unit 8 Review 1. Question: Which of the following is not a reason for the issuance of long-term liabilities? Your Answer: Debt financing offers an income tax advantage. Ownership interest is diluted. CORRECT Debt may be the only available source of funds. Debt financing may have a lower cost. 2. Question: When the market rate of interest is equal to the contract rate of interest, the bonds should sell at Your Answer: 3. Question: If a company sells its bonds at face value, the effective interest rate is Your Answer: Page 1 of 12
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Unit 8: Long-Term Liabilities and Receivables (Mar 23 - Mar 29) Grade Details: Unit 8 Review 4. Question: Leverage occurs when a company's Your Answer: 5. Question: Which of the following bonds pay no interest until maturity? Your Answer: 6. Question: In which of the following situations will the book value of a bond be equal to its maturity value? Your Answer: Page 2 of 12
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Unit 8: Long-Term Liabilities and Receivables (Mar 23 - Mar 29) Grade Details: Unit 8 Review 7. Question: If a company sells its 20-year bonds at a discount, the discount account should be reported on the balance sheet as a(n) Your Answer: 8. Question: The assumption of a stable interest expense per year is inherent under which of the following amortization methods? Your Answer: 9. Question: Gains or losses from refunding are recognized Your Answer: Page 3 of 12
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Unit 8: Long-Term Liabilities and Receivables (Mar 23 - Mar 29) Grade Details:
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Grade Details Unit 8 Review - Unit 8: Long-Term Liabilities...

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