AC202Quiz2SB

AC202Quiz2SB - AC 202 Principles of Accounting II Park...

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AC 202 Principles of Accounting II Park University Quiz 2A-Chapter 14 Multiple Choice Questions-( 10 Points Each ) Select the ONE, BEST Answer 1. A bond traded at 102½ 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. 2. The payment pattern for an installment note that promises accrued interest plus equal amounts of principal includes: A. Decreasing total payments. B. Decreasing accrued interest. C. Constant principal payments. D. Both A and B. E. All of the above. 3. An advantage of bond financing is: A. Bonds do not affect owners' control. B. Interest on bonds is tax deductible. C. Bonds can increase return on equity. D. It allows firms to trade on the equity. E. All of the above. 4. 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.
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This note was uploaded on 03/02/2012 for the course ACCT 202 taught by Professor Pizzillo during the Spring '08 term at Park.

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AC202Quiz2SB - AC 202 Principles of Accounting II Park...

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