If a bond is sold at a premium, the carrying value reported on the balance sheet in subsequent years ________.
A) stays the same each year
B) increases each year
C) decreases each year
D) changes every year as the market rate of interest changes
(
Q. 2) Assume the gross amount of an invoice is 200 and a trade discount of 10 is allowed. The amount to be entered in the accounting records would be
a. 20.
b. 220.
c. 200.
d. 180.
(
Q. 3) Able Baker Company incurred the following expenditures for the purchase and use of a machine for the company's factory in Puerto Rico.
Required: Put an X in the appropriate box to indicate which expenditures should be capitalized and which should be expensed:
Expenditure Capitalize Expense
60,000 invoice price of the machine
3,000 transportation costs for the machine
1,400 for inspection of the machine
1,000 for moving and handling the machine
3,500 for installation of the machine
2,200 for testing the machine
12,000 in power costs for the year to operate the machine
2,000 for ordinary repairs and maintenance on the
machine for the year
4,000 for an overhaul to make the machine run more
efficiently
(
Q. 4) When using the percent of sales method of estimating uncollectibles the entry to record bad debt expense includes acredit to Accounts Receivable.
a. True
b. False
Indicate whether the statement is true or false
(
Q. 5) On January 1, 2012, Ace Electronics borrowed 40,000 on a five-year, 7 note. Ace will pay ONLY THE INTEREST on the loan on December 31 each year. The entire principal will be repaid on December 31, 2016, the last interest payment date.
Notes payable at December 31, 2013 will be ________ notes payable at December 31, 2012.
A) higher than
B) the same as
C) lower than
D) The answer cannot be determined from the information given.
(
Q. 6) The columns in a control matrix contain headings listing the business process:
a. control goals
b. control plans
c. control environment
d. control procedures
Quick Reply
