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ACC 802 POT Quiz
Intermediate Accounting
16
Accounting
Graduate
10/05/2015

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Term
Dove Co. issued $100,000 of ten-year, 10% bonds that pay interest semiannually. The bonds are sold to yield 8%.
Definition
b. multiply $5,000 by the table value for 20 periods and 4% from the present value of an annuity table.
Term
2. Another step in calculating the issue price of bonds is to multiply the principal by the table value for:
Definition
c. 20 periods and 4% from the present value of 1 table.
Term
3. Under the effective-interest method of bond discount or premium amortization, the periodic interest expense is equal to
Definition
d. the market rate multiplied by the beginning-of-period carrying amount of the bonds.
Term
4. When the interest payment dates of a bond are May 1 and November 1, and a bond issue is sold on June 1, the amount of cash received by the issuer will be
Definition
d. increased by accrued interest from May 1 to June 1.
Term
5. Roller, Inc. issued bonds with a maturity amount of $200,000 and a maturity ten years from the date of issue. If the bonds were issued at a premium, this indicates that
Definition
b. the nominal rate of interest exceeded the market rate.
Term
6. If bonds are initially sold at a discount and the straight-line method of amortization is used, interest expense in the earlier years will
Definition
a. exceed what it would have been had the effective-interest method of amortization been used.
Term
10. When a note payable is issued for property, goods, or services, the present value of the note is measured by
Definition
a. the fair value of the property, goods, or services.
b. the market value of the note.
c. using an imputed rate to discount all future payments on the note.
Term
1. When convertible debt is retired by the issuer, any material difference between
the cash acquisition price and the carrying amount of the debt should be
Definition
reflected currently in income, but not as an extraordinary item
Term
When the cash proceeds from a bond issued with detachable stock warrants
exceed the sum of the par value of the bonds and the fair market value of the
warrants, the excess should be credited to
Definition
d. premium on bonds payable.
Term
The major difference between convertible debt and stock warrants is that upon
exercise of the warrants
Definition
the holder has to pay a certain amount of cash to obtain the shares.
Term
The date on which to measure the compensation element in a stock option granted
to a corporate employee ordinarily is the date on which the employee
Definition
a. is granted the option.
Term
In computations of weighted average shares outstanding for a set of
comparative (that is, multi-year) financial statements, when a stock
dividend or stock split occurs, the additional shares are
Definition
considered outstanding at the beginning of the earliest year
reported.
Term
What effect will the acquisition of treasury stock have on stockholders'
equity and earnings per share, respectively?
Definition
c. Decrease and increase
Term
When computing diluted earnings per share, convertible bonds are
Definition
d. assumed converted only if they are dilutive.
Term
When computing diluted earnings per share, convertible bonds are
Definition
d. assumed converted only if they are dilutive.
Term
In the diluted earnings per share computation, the treasury stock method is
used for options and warrants to reflect assumed reacquisition of common
stock at the average market price during the period. If the exercise price
of the options or warrants exceeds the average market price, the
computation would
Definition
d. be antidilutive.
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