acct 302 - Q.4 ) Under the effective-interest method of...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Q.1 ) An example of an item which is not a liability is A . the portion of long-term debt due within one year B . accrued estimated warranty costs C . advances from customers on contracts D . dividends payable in stock Q.2 ) If bonds are issued initially at a premium and the effective-interest method of amortization is used, interest expense in the earlier years will be A . less than if the straight-line method were used B . greater than the amount of interest payments C . greater than if the straight-line method were used D . the same as if the straight-line method were used Q.3 ) The interest rate written in terms of the bond indenture is known as the A . nominal rate B . coupon rate C . stated rate D . coupon rate. nominal rate of stated rate
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Q.4 ) Under the effective-interest method of bond discount of premium amortization, the periodic interest expense is equal to A . the stated (nominal) rate of interest multiplied by the face value of the bonds B . the market rate of interest multiplied by the face value of the bonds C . the stated rate multiplied by the beginning-of-period carrying amount of the bonds D . the market rate multiplied by the beginning-of-period carrying amount of the bond Q.5 ) Treasury bonds should be shown on the balance sheet as A . an asset B . both an asset and liability C . a deduction from bonds payable issued to arrive at net payable and outstanding D . a reduction of stockholder's equity...
View Full Document

Ask a homework question - tutors are online