FAR — Financial Accounting & Reporting — Quiz 58

Questions in this quiz (10)

1. Which financial statement reports bonds payable?

   • Income statement
   • Balance sheet
   • Statement of retained earnings
   • Statement of cash flows

2. What occurs when bonds are issued at a discount?

   • Bonds sell above face value
   • Bonds sell below face value
   • Bonds pay no interest
   • Bonds mature early

3. What occurs when bonds are issued at a premium?

   • Bonds sell below face value
   • Bonds sell above face value
   • Bonds have no interest
   • Bonds have no maturity

4. Why is liability accounting important?

   • It increases revenue
   • It identifies future obligations
   • It reduces expenses
   • It simplifies accounting

5. What is the maturity date of a bond?

   • Date issued
   • Date interest is paid
   • Date principal is repaid
   • Date bond is traded

6. Which account is debited when recording bond interest expense?

   • Interest expense
   • Cash
   • Bonds payable
   • Interest payable

7. Which account is credited when interest is paid in cash?

   • Interest expense
   • Interest payable
   • Cash
   • Bonds payable

8. Which account records interest owed but unpaid?

   • Interest expense
   • Interest payable
   • Bonds payable
   • Accounts payable

9. Which financial statement reports interest expense?

   • Balance sheet
   • Income statement
   • Statement of cash flows
   • Statement of retained earnings

10. Which bond type allows conversion into common stock?

    • Callable bond
    • Convertible bond
    • Secured bond
    • Serial bond