ACC Final Review

ACC Final Review - ACC151 M010 2011 SPRING Instructor:...

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ACC151 M010 2011 SPRING Instructor: Xiaolu Xu Sample Final Exam (Review questions) Note: You can consider this document as either a sample final exam or a sheet for review questions. I made 57 multiple choice questions covering chapter 10-13 here for your practice and review. For chapter 1-9, please review all multiple choice questions in 2 sample midterms and 2 midterms. In the final exam, there will be 15 multiple choice questions and 4 long problems. I. MULTIPLE CHOICES ( correct answers are indicated by underscoring and bolding the corresponding letters ) 1. When a bond sells at a premium: A . The contract rate is above the market rate B . The contract rate is equal to the market rate C . The contract rate is below the market rate D . It means that the bond is a zero coupon bond E. The bond pays no interest 2. Promissory notes that require the issuer to make a series of payments consisting of both interest and principal are: A. Debentures B. Discounted notes C. Installment notes D. Indentures E. Investment notes 3. Installment notes payable that require periodic payments of accrued interest plus equal amounts of principal result in: A. Periodic total payments that gradually decrease in amount B. Periodic total payments that are equal C. Periodic total payments that gradually increase in amount D. Increasing amounts of interest each period E. Increasing amounts of principal each period 4. Which of the following statements is true? A. Interest on bonds is tax deductible B. Interest on bonds is not tax deductible C. Dividends to stockholders are tax deductible D. Bonds do not have to be repaid E. Bonds always decrease return on equity 5. A bond traded at 102 ½ means that: A. The bond pays 2.5% interest B. The bond traded at $1,025 per $1,000 bond C. The market rate of interest is 2.5% D. The bonds were retired at $1,025 each E. The market rate of interest is 2 ½% above the contract rate
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6. A company issued 8%, 15-year bonds with a par value of $550,000. The current market rate is 8%. The journal entry to record each semiannual interest payment is: A. B. C. D. E. No entry is needed, since no interest is paid until the bond is due 7. A discount on bonds payable: A. Occurs when a company issues bonds with a contract rate less than the market rate B. Occurs when a company issues bonds with a contract rate more than the market rate C. Increases the Bond Payable account D. Decreases the total bond interest expense E. Is not allowed in many states to protect creditors 8. The Premium on Bonds Payable account is a(n): A. Revenue account B. Adjunct or accretion liability account C. Contra revenue account D. Asset account E. Contra expense account 9. Adidas issued 10-year, 8% bonds with a par value of $200,000, where interest is paid semiannually. The market rate on the issue date was 7.5%. Adidas received $206,948 in cash proceeds. Which of the following statements is true? A.
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ACC Final Review - ACC151 M010 2011 SPRING Instructor:...

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