Can't figure these out. Thanks for any help.
1. Liabilities are classified as current or long-term based on their
a. description.
b. payment terms.
c. due date.
d. amount.
2. Restoration Company issued bonds that had the following data associated with them:
Interest to be paid is $40,000.
Interest expense to be recorded is $45,000.
Which of the following characteristics is true?
a. The bonds are sold at a premium.
b. After recording the interest expense, the amortization will decrease the bond carrying value.
c. The difference between the interest expense and the interest to be paid is the bond’s par value.
d. After recording the interest expense, the amortization will increase the bond carrying value.
3. The amount of sales tax collected by a retail store when making sales is
a. a miscellaneous revenue for the store.
b. a current liability.
c. not recorded because it is a tax paid by the customer.
d. recorded as an operating expense.
4. If bonds are issued at a premium, the stated interest rate is
a. higher than the market rate of interest.
b. lower than the market rate of interest.
c. too low to attract investors.
d. adjusted to a higher rate of interest.
5. The statement "Bond prices vary inversely with changes in the market rate of interest" means that if the
a. market rate of interest increases, the contractual interest rate will decrease.
b. contractual interest rate increases, then bond prices will go down.
c. market rate of interest decreases, then bond prices will go up.
d. contractual interest rate increases, the market rate of interest will decrease.
6. A retailer that collects sales taxes is acting as an agent for the
a. wholesaler.
b. customer.
c. taxing authority.
d. chamber of commerce.
1. Liabilities are classified as current or long-term based on their
a. description.
b. payment terms.
c. due date.
d. amount.
2. Restoration Company issued bonds that had the following data associated with them:
Interest to be paid is $40,000.
Interest expense to be recorded is $45,000.
Which of the following characteristics is true?
a. The bonds are sold at a premium.
b. After recording the interest expense, the amortization will decrease the bond carrying value.
c. The difference between the interest expense and the interest to be paid is the bond’s par value.
d. After recording the interest expense, the amortization will increase the bond carrying value.
3. The amount of sales tax collected by a retail store when making sales is
a. a miscellaneous revenue for the store.
b. a current liability.
c. not recorded because it is a tax paid by the customer.
d. recorded as an operating expense.
4. If bonds are issued at a premium, the stated interest rate is
a. higher than the market rate of interest.
b. lower than the market rate of interest.
c. too low to attract investors.
d. adjusted to a higher rate of interest.
5. The statement "Bond prices vary inversely with changes in the market rate of interest" means that if the
a. market rate of interest increases, the contractual interest rate will decrease.
b. contractual interest rate increases, then bond prices will go down.
c. market rate of interest decreases, then bond prices will go up.
d. contractual interest rate increases, the market rate of interest will decrease.
6. A retailer that collects sales taxes is acting as an agent for the
a. wholesaler.
b. customer.
c. taxing authority.
d. chamber of commerce.