DPA30053 TOPIC 3

DPA30053 TOPIC 3

1st Grade

10 Qs

quiz-placeholder

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DPA30053 TOPIC 3

DPA30053 TOPIC 3

Assessment

Quiz

Education

1st Grade

Practice Problem

Medium

Created by

Shukria Shukur

Used 2+ times

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10 questions

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1.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

When a company issues a loan instrument, it records an increase in liabilities.

TRUE

FALSE

2.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

What type of account is created when a company issues a loan instrument?

ASSET

LIABILITIES

EQUITY

EXPENSES

3.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

The interest expense associated with a loan instrument is recognized as an expense.

FALSE

TRUE

4.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

At the time of loan issuance, if the company incurs issuance costs, how should these costs be treated in the accounting records?

Expense immediately

Increase the loan payable balance

Ignore as they do not affect the financial statements

Capitalize and amortize over the life of the loan

5.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

When a loan is issued, the company's bank account will ___________.

Decrease

Increase

No Change

6.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

When preference shares are being redeemed, the company's bank account will ___________.

Decrease

Increase

No Change

7.

MULTIPLE CHOICE QUESTION

45 sec • 1 pt

When preference shares are redeemed, the company reduces its equity by the amount of the shares redeemed.

TRUE

FALSE

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