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This is copy from https://knowt.com/flashcards/07aa1d2d-069f-4472-a5ad-0c4859c14d05?share=direct because I have changed a few things. ACCT 211 at Black Hills State University
Bond are a debt instrument that pays both a regular interest payment and an insurance premium for market volatility
FALSE - not a insurance premium
Which of these is a bond that can be repurchased by the issuer at a prearranged price
Callable
The time value of money is the concept that recognizes the effect of interest on the present and future values of money
True
The present value is how much a future value is in the present day if interest is factored out – called rebating
Present Value-False
A lease is a contractual agreement between an owner of property and a purchaser of property
False
Which of these market quotes show a bond issued at a premium
102
A company issues 10 bonds, 5-year, 10% at 102, what is the journal entry
Cash 102,000
Premium 2,000
Bonds Payable 100,000
The payment at maturity for 10 bonds, 5-year, 10% issued at 100
100,000
Which of the following have a robust secondary market in which to buy and sell
Bonds and Stock
Which of these is not prepared according to accrual accounting rules
Cash Flow Statement
Which item is found in the financing section of the cash flow statement
dividends
Large investing and/or financing activities that do not affect cash are found in what section of the cash flow statement
Significant noncash activities
The three activity sections is equal to the difference between cash at the beginning and end of the period
True
The cash flow statement method that starts with net income and adjusts for the cash effect of various balance sheet accounts is called the
indirect
The operating activities section of the cash flow statement starts with
net income
In the operating activities section of the cash flow statement, the second item to be considered is
depreciation
In the operating activities section, we add gains and subtract losses
False
The rule of thumb for assets is that cash moves the opposite way of the asset
True
The rule of thumb for liabilities and equity is that cash moves the opposite way as the liability or equity
ROT for liabilities- False
In the investing section, with a sale of a long-term asset, the cash portion goes in the investing section and the gain or loss goes in which section
operating activities
In the financing section, an increase in a long-term liability such as notes payable results in an increase in cash
Financing section -True
In the financing section, an increase in an equity item such as common stock results in a decrease in cash
False
In the financing section, an increase in a dividend results in a decrease in cash
True
For a healthy company, we expect that the majority of positive cash flow will come from which activity
Operating activity
Sustainable income has both positive and negative nonrecurring items removed
Sustainable-True
Which is not an item associate with the evaluation of sustainable income
significant noncash activities is not an associate item
Discontinued operations refers to the temporary interruption of a significant component of a business such as a division
False
Which is not a component of discontinued operations
restatement for the prior 3 years
Discontinued operations is listed where on the income statement
below income from continuing operations net of tax
Comprehensive income records all gains and losses
False
Which of these qualify as a change in accounting principles
moving from FIFO to LIFO
Quality of earnings is an evaluation of a company's financial statements regarding its transparency and reliability
True
Which is not a factor that affects quality of earnings
mortgage notes payable
Alternative accounting methods refers to the use of different accounting methods to improve comparability and increase readability
False
Channel stuffing (offering discounts to bring forward sales) is an example of
improper recognition
Horizontal analysis looks at % changes between year, and vertical analysis looks at % differences within a year
True
Which set of ratios measures the short-term ability of the company to pay its maturing obligation and needs for cash
liquidity
Long-term liabilities are obligations that a company expects to pay more than a year in the future
Long Term liabilities- true
Which is not a main attribute of a bond provided to bondholders
Amortized value
The future value is how much a present day value is in the future if interest is added in – called compounding
True
When a bond is issued at a discount, the market rate is lower than the bond rate
False
A company issues 10 bonds, 5-year, 10% at 100, what is the journal entry
Cash 100,000
Bonds Payable 100,000
A company issues 10 bonds, 5-year, 10% at 97, what is the journal entry
Cash 97,000
Discount 3,000
Bonds Payable 100,000
The annual cash interest payment for 10 bonds, 5-year, 10% issued at 100
1,000
A mortgage note payable is a long-term loan that is secured by real estate or property as collateral
True
A lease is a contractual agreement between an owner of property and a purchaser of property
false
Which item is not part of the calculation for cash flow from operations
Dividends
Which is not an item included in the investing section
common stock?
Pro forma income is an income statement that does not follow GAAP
True
Which set of ratios measures the ability of the company to survive over a long period of time
solvency
Which set of ratios measure the operating success of a company for a given period of time
profitability
Comprehensive income records all gains and losses
False
