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Test bank For Intermediate Accounting II- Exam I (11th Edition by David Spiceland)
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Test bank For Intermediate Accounting II- Exam I (11th Edition by David Spiceland)
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Test bank For Intermediate AccountingII- Exam I (11th Edition by David
Spiceland)
The most common type of liability is: - ANSOne to be paid in cash and for which the amount and
timing are known
Which of the following is the BEST definition of a current liability? - ANSAn obligation expected
to be satisfied with current assets or by the creation of other current liabilities
Which of the following is NOT a liability? - ANSAn unused line of credit
Current liabilities normally are recorded at their: - ANSMaturity amount
The rate of interest printed on the face of a note payable is called the: - ANSStated rate
Jane's Donuc Co. borrowed $200,000 on January 1, 2011, and signed a two-year note bearing
interest at 12%. Interest is payable in full at maturity on January 1, 2013. In connection with this
note, Jane should report interest expense at December 31, 2011, in the amount of: -
ANS$24,000
When a deposit on returnable containers is forfeited, the firm holding the deposit will
experience: - ANSAn increase in revenue
Interst expense is: - ANSThe effective interest rate times the amount of the debt outstanding
during the interest period
Bonds usually sell at their: - ANSPresent value
Straight-line amortization of bond discount or premium: - ANSProvides the same total amount of
interest expense over the life of the bond issue as does the effective interest method
LPC issued the bonds: - ANSAt a premium
What is the annual stated interest rate on the bonds? - ANS7%
What is the effective interest rate on the bonds? - ANS6%
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