Week 3 Questions ACC II

  1) The time period for classifying a liability as current is one year or the operating cycle, whichever is

2) Which one of the following is not a typical current liability?

3) Buttner Company borrows $88,500 on September 1, 2017, from Harrington State Bank by signing an $88,500, 12%, one-year note. How much is accrued interest at December 31, 2017?

4) How is the market value of a bond issuance determined?

5) If the contractual rate of interest is lower than the market rate of interest, bonds will sell at a premium.

6) What is the effect of amortizing a bond discount?

7) Cuso Inc. issues 10-year bonds with a maturity value of $200,000. If the bonds are issued at a premium, what does this indicate?

8) When a bond is sold at a premium, at what amount is it reported on the balance sheet?

9) Tanner, Inc. issued a 10%, 5-year, $100,000 bond when the market rate of interest was 12%. At what value will the bond sell?

10) Which of the following is not a commonly used method of presenting current liabilities on the balance sheet?