Q-Q4CRMb

Paying a current liability with cash will always reduce the current ratio.

• T

• F

Current liabilities are usually recorded and reported in financial statements at their full maturity value.

• T

• F

Warranty provision is a provision recognized in the period of related sales.

• T

• F

A zero-interest-bearing long term note payable that is issued at a discount will not result in any interest expense being recognized.

• T

• F

If a long-term note payable has a stated interest rate, that rate should be considered to be the effective rate.

• T

• F

A long-term debt maturing currently is classified as a current liability

• when it is to be paid with cash in a sinking fund

• when it is to be retired with proceeds from a new debt issue

• when it is to be converted into common stock

• when it is to be paid with current assets

The term used for bonds that are unsecured as to principal is

• junk bonds.

• debenture bonds.

• indebenture bonds.

• callable bonds.

A shareholder can sell and transfer his acquired share capital only with the knowledge and consent of all the shareholders.

• T

• F

Subscribed share capital is a portion of share capital that an investor agreed to purchase and the corporation has not yet issued.

• T

• F

A corporation is formed by the mere desire of owners or the agreement of parties.

• T

• F