ACCT 101 Final Exam Spring 2009 with solutions

ACCT 101 Final Exam Spring 2009 with solutions - Name:_...

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Name:_________________________________________ Accounting 101, Spring 2009 1 PENN ID: ______________________________________ Recitation Section: _______________________________ EXAM WITH SUGGESTED SOLUTIONS ACCOUNTING 101, FINAL EXAM Spring Semester, 2009 Instructions 1. There are 19 numbered pages in this booklet. Make sure you have all the pages before you begin. 2. Please print your name and student number at the top of this page AND on all subsequent pages. 3. This exam has 100 total points. You have 120 minutes to complete the exam so please budget your time accordingly. 4. Answer the multiple choice questions on the answer sheet provided on page 19. Answer the short-answer questions in the space provided within this booklet. Present your work in an orderly fashion to facilitate the awarding of partial credit for certain questions. In order to receive partial credit, you must show your work. Partial credit can only be awarded for work that is presented in a clear, legible, and logical manner. 5. In the interest of fairness to all students, NO questions will be answered during the exam. If you think a question is ambiguous, explicitly state an appropriate assumption and continue with the question. 6. The exam is closed book and the use of a laptop computer is prohibited. You are permitted to use ONE side of a double-sided 8 ½ x 11 inch reference sheet. You are also permitted to use a calculator. 7. Exams written in pencil will not be considered for a regrade. Use a pen if you think you might submit your exam for a regrade request.
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Name:_________________________________________ Accounting 101, Spring 2009 2 PART 1: Multiple Choice (3 points each) 1. If the market interest rate for a bond is higher than the stated interest rate, the bond will sell at A. a discount. B. a premium. C. par. D. the price cannot be determined from the information given. 2. On January 1, 2009, Tonika Corporation issued a four-year, $10,000, 7% bond. The interest is payable annually each December 31. The issue price was $9,668 based on an 8% effective interest rate. Assuming effective-interest amortization is used, the interest expense on the income statement for the year ended December 31, 2009 would be (to the nearest dollar) A. $ 1,547. B. $ 883. C. $ 773. D. $ 700. 3. Which of the following statements is true? A. Bonds are always issued at their par value. B. Bonds issued at more than par value are said to be issued at a discount. C. Once bonds are issued; the bonds will trade in the bond market above or below par depending on changes in interest rates. D. Bondholders must hold their bonds to maturity to receive cash for their investment. 4. Eaton Company issued $5 million in bonds. The stated rate of interest was 10% and the market rate 11%. Which of the following statements is true? A. The bonds were issued at a premium.
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ACCT 101 Final Exam Spring 2009 with solutions - Name:_...

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