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booklets (used and unused), in the envelope. Failure to do so may result in a FAIL
grade. BBUS 3211 • PRACTICE EXAMINATION 2 of 13 Part A—Multiple-Choice Questions (30 marks total) Each multiple‐choice question is worth two marks. Select the best answer for each of the following. 1.
Discount on Bonds Payable is charged to interest expense a. Equally over the life of the note. b. Only in the year the note is issued. c. Using the effective interest method. d. Only in the year the note matures. 2. Raja Co. has 100,000 no par value common shares authorized, issued, and outstanding. All 100,000 shares were issued at $10 per share. Retained earnings of the company are $120,000. If 10,000 shares of Raja common were reacquired at $8 and cancelled, a. Shareholders’ equity would decrease $80,000. b. Contributed surplus would decrease $10,000. c. Retained earnings would decrease $10,000. d. Contributed surplus from treasury shares would incre...
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