BF170 Quiz 2 Review

_______ bond is a debt security instrument that does not pay interest and offers full face value profits at maturity. 

In certain states, companies are allowed to pay dividends in excess of their_______ Balance

According to the U.S. GAAP, companies have to use the _____ Method to amortize intangible assets. 

Bond issue costs are recognized as a _____ of the proceeds from selling the bonds.

A liability that is satisfied through the payment of cash is referred to as a _______.

A company’s bonds that are backed by the company’s general credit are called what?

• Secured Bond

• Marketable Bond

• Jail Bonds

• Debentures

Assume the retailer started the year with a beginning inventory of one TV, which had an invoice cost of $300. During the year, the dealer cost of identical TVs increased to $400, and the retailer purchases another TV at this cost. The retailer applies replacement cost accounting. Which of the following is the Current Cost of Goods Available for Sale? 

• $800

• $3900

• $400

• $1200

Assume the cost of a company’s long-term asset is $20,000, expected salvage value is $1,000, and  expected useful life is 10 years. Which of the following is the amount of depreciation in the second year of useful life of the asset if the company applies Double-Declining Balance Depreciation method? 

• $2000

• $1800

• $1000

• $15,000

If bonds are sold at a premium, interest expense will always be: 

• Less than Premium Payment

• Less than the Cash Interest Payment

• More than Premium Payment

• More than the Cash Interest Payment

Raffy Co. reported the following accounting information: Net Income for the year – $200,000; Preferred Stock Dividends – $50,000; Average Number of Common Shares Outstanding – 30,000; Average Number of Preferred Shares Outstanding – 10,000. Raffy Co. issued options to buy 10,000 shares of common stock at $100 per share that resulted in $10,000 income adjustment. Which of the following is Raffy Co.’s Diluted Earnings Per Share? 

• $4

• $8

• $10

• $20,000