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- Download: http://solutionzip.com/downloads/30-mcq-condi-corporation-sells-100000/
- Question 1 of 30 3.3334 Points
- Condi Corporation sells $100,000, 12%, 10-year bonds for 97 on January 1, 2009. Interest is paid on January 1 and July 1. Straight-line amortization is used. The amount of interest paid on July 1, 2009 is:
- A. $6,000.
- B. $5,850.
- C. $12,000.
- D. $6,150.
- Question 2 of 30 3.3334 Points
- A bond payable is similar to which of the following?
- A. Accounts Payable
- B. Notes Payable
- C. Accounts Receivable
- D. Cash
- Question 3 of 30 3.3334 Points
- For a corporation, a premium on bonds results when:
- A. the contract rate is less than the market rate.
- B. the contract rate is greater than the market rate.
- C. the face value is greater than the effective rate.
- D. None of these answers are correct.
- Question 4 of 30 3.3334 Points
- When the contract rate of interest on bonds is equal to the market rate of interest, bonds sell at:
- A. a premium.
- B. their face value.
- C. a discount.
- D. their maturity value.
- Question 5 of 30 3.3334 Points
- Bailey Corporation has decided to issue bonds pledging specific assets. What type of bonds is it offering?
- A. Secured bonds
- B. Debenture bonds
- C. Serial bonds
- D. Convertible bonds
- Question 6 of 30 3.3334 Points
- Bond Interest Payable is reported as a:
- A. contra-liability on the balance sheet.
- B. current liability on the income statement.
- C. contra-liability on the income statement.
- D. current liability on the balance sheet.
- Question 7 of 30 3.3334 Points
- Carrying value is the same thing as:
- A. fair market value.
- B. discount value.
- C. book value.
- D. premium value.
- Question 8 of 30 3.3334 Points
- The contract rate for a bond is:
- A. the annual interest rate based on face value.
- B. the annual interest rate based on selling price.
- C. the annual interest rate based on market value.
- D. None of these answers are correct.
- Question 9 of 30 3.3334 Points
- Davis Corporation sells $100,000, 12%, 10-year bonds for 103 on January 1. Compute the semi-annual interest expense recorded on July 1 using the interest method. The market rate is 8%.
- A. $12,000
- B. $8,240
- C. $6,000
- D. $4,120
- Question 10 of 30 3.3334 Points
- When selling bonds at a premium, the premium received effectively:
- A. reduces the cost of borrowing.
- B. does not affect the cost of borrowing.
- C. reduces the amount of cash received when bonds are sold.
- D. increases the cost of borrowing.
- Question 11 of 30 3.3334 Points
- The entry to record the semiannual payment and amortization of the discount using the straight-line method on a 10%, $100,000, 5-year bond issued at 97 would be to:
- A. debit Bond Interest Expense $10,000; credit Cash $10,000.
- B. debit Bond Interest Expense $5,000; credit Cash $5,000.
- C. debit Bond Interest Expense $13,000; credit Cash $10,000; credit Discount on Bonds Payable $3,000.
- D. debit Bond Interest Expense $5,300; credit Cash $5,000; credit Discount on Bonds Payable $300.
- Question 12 of 30 3.3334 Points
- The interest rate specified in the bond indenture is called the:
- A. market rate.
- B. discount rate.
- C. effective rate.
- D. contract rate.
- Question 13 of 30 3.3334 Points
- Bond certificates state the:
- A. market value and contract rate.
- B. market value and current interest rate.
- C. face value and contract rate.
- D. face value and current interest rate.
- Question 14 of 30 3.3334 Points
- Dividends paid to stockholders are:
- A. taxable to the corporation.
- B. treated the same as bond interest.
- C. taxable to the recipient stockholder.
- D. None of these answers are correct.
- Question 15 of 30 3.3334 Points
- Bonds payable issued with collateral are called:
- A. debenture bonds.
- B. secured bonds.
- C. callable bonds.
- D. serial bonds.
- Question 16 of 30 3.3334 Points
- If Accounts Receivable decreases on a comparative balance sheet, this means:
- A. collections were more than sales.
- B. credit sales are increasing more than collections.
- C. credit sales are decreasing.
- D. None of these answers are correct.
- Question 17 of 30 3.3334 Points
- Of the following items, which is not classified as an investing activity on the statement of cash flows?
- A. Selling goods and services
- B. Sale of a plant asset for cash
- C. Collecting loans
- D. Purchasing land
- Question 18 of 30 3.3334 Points
- Collins Corporation reported net income of $35,000; depreciation expenses of $20,000; an increase in Accounts Payable of $2,000; and an increase in Accounts Receivable of $3,000. Net cash flow from operating activities using the indirect method is:
- A. $56,000.
- B. $55,000.
- C. $54,000.
- D. $50,000.
- Question 19 of 30 3.3334 Points
- If $12,000 was generated from operations, $6,000 was used for investing activities, and $4,000 was provided by financing activities, the cash balance would:
- A. increase by $2,000.
- B. increase by $14,000.
- C. increase by $10,000.
- D. decrease by $20,000.
- Question 20 of 30 3.3334 Points
- The accuracy of the statement of cash flows, regardless of method used, can be verified by computing the change in the balance of:
- A. revenue.
- B. equity.
- C. liabilities.
- D. cash.
- Question 21 of 30 3.3334 Points
- The statement of cash flows provides information about all of the following except:
- A. operating activities.
- B. financing activities.
- C. investing activities.
- D. organizing activities.
- Question 22 of 30 3.3334 Points
- Activities that pay and collect interest on loans are:
- A. financing and investing activities.
- B. operating and financing activities.
- C. marketing activities.
- D. operating and investing activities.
- Question 23 of 30 3.3334 Points
- Many accountants prefer which method of computing cash flow from operating activities?
- A. Direct method
- B. Indirect method
- C. Combination method
- D. Adjusting method
- Question 24 of 30 3.3334 Points
- The sale of plant and equipment for cash would result in:
- A. a decrease subtracted from net income from operations.
- B. a decrease in cash from investing activities.
- C. an increase in cash from investing activities.
- D. an increase added to net income from operations.
- Question 25 of 30 3.3334 Points
- Which of the following would be included in the net cash flows from operating activities section of a cash flow statement using the indirect method?
- A. Sales of plant, property and equipment
- B. Payment of interest and expenses
- C. Making loans and paying out interest
- D. Issuing bonds and notes
- Question 26 of 30 3.3334 Points
- When comparing net cash provided by operating activities using the indirect versus direct method:
- A. there is no difference between the two methods
- B. net cash is lower using indirect method
- C. net cash is higher using the indirect method
- D. depreciation expense is used in the direct method.
- Question 27 of 30 3.3334 Points
- The cash flow statement has all of the following sections except:
- A. net cash flow from operating activities.
- B. net cash flow from managing activities.
- C. net cash flow from financing activities.
- D. net cash flow from investing activities.
- Question 28 of 30 3.3334 Points
- Big Toy Corporation’s records show profit of $30,000; depreciation expense of $10,000; and cash dividends declared and paid of $5,000. The amount of cash used in operating activities using the indirect method is:
- A. $10,000.
- B. $40,000.
- C. $20,000.
- D. $30,000.
- Question 29 of 30 3.3334 Points
- Activities that increase and decrease as a result of selling a company’s stock are:
- A. investing activities.
- B. marketing activities.
- C. operating activities.
- D. financing activities.
- Question 30 of 30 3.3334 Points
- When preparing the statement of cash flows by the indirect method, if accumulated depreciation increases the difference is:
- A. added to net income.
- B. not considered in the statement of cash flows using the indirect method.
- C. added to investments.
- D. deducted from net income.
- Download: http://solutionzip.com/downloads/30-mcq-condi-corporation-sells-100000/
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