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ACC Q0612

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1. All liabilities that are not classified as current liabilities are classified as long-term.
True
False

2. The basic accounting equation can be restated in terms of cash by the following equation: Cash = current liabilities + long-term liabilities + capital stock - retained earnings - noncash current assets + long-term assets.
True
False

3. The accrual-based income statement is considered to be a good indicator of current cash inflows and outflows.
True
False

4. A note payable that is due in six months is a current liability.
True
False

5. The liability for a premium offer estimated to be redeemed is not a current liability.
True
False

6. The most obvious risk to bond investors is that a company will fail and be unable to pay its debts.
True
False

7. If an investor has the right to retire the bonds, they are referred to as callable
True
False

8. Generally, an increase in a current liability results in an increase in the operating activities category of the cash flow statement.
True
False

9. A 15% stock dividend will increase the number of shares outstanding but the book value per share will decrease.
True
False

10. The amortization of bond discount increases the effective interest expense incurred each period for the issuer while amortization of bond premium decreases it.
True
False

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