Question :
Multiple Choice
41. Which of the following not a reason why : 1256004
Multiple Choice
41. Which of the following is not a reason why a company might prefer to report a liability as long-term rather than current?
a.It may cause the firm to appear less risky to investors and creditors.
b.It may increase interest rates on borrowing.
c.It may cause the company to appear more stable commanding a higher stock price for new stock listings.
d.It may reduce interest rates on borrowing.
42. Given a choice, most companies would prefer to report a liability as long-term rather than current because:
a.It may cause the firm to appear less risky to investors and creditors.
b.It may reduce interest rates on borrowing.
c.It may cause the company to appear more stable commanding a higher stock price for new stock listings.
d.All of the other answers are true.
43. Which of the following is not a current liability?
a.Accounts payable.
b.A note payable due in 2 years.
c.Current portion of long-term debt.
d.Sales tax payable.
44. Which of the following is not a characteristic of a liability?
a.It represents a probable, future sacrifice of economic benefits.
b.It must be payable in cash.
c.It arises from present obligations to other entities.
d.It results from past transactions or events.
45. Which of the following is not a liability?
a.Notes payable
b.Current portion of long-term debt.
c.An unused line of credit.
d.Unearned revenue.
46. Liabilities are defined as:
a.
Resources owed by an entity as a result of past transactions.
b.
Resources owned by an entity as a result of past transactions.
c.
Selling products and services to customers in the current period.
d.
Costs of running the business in the current period.
47. Brian Inc. borrowed $8,000 from First Bank and signed a promissory note. What entry should Brian Inc. record?
a.
Debit Cash, $8,000; Credit Notes Receivable, $8,000.
b.
Debit Notes Receivable, $8,000; Credit Cash, $8,000.
c.
Debit Cash, $8,000; Credit Notes Payable, $8,000.
d.
Debit Notes Payable, $8,000; Credit Cash, $8,000.
48. Brian Inc. borrowed $8,000 from First Bank and signed a promissory note. What entry should First Bank record?
a.
Debit Cash, $8,000; Credit Notes Receivable, $8,000.
b.
Debit Notes Receivable, $8,000; Credit Cash, $8,000.
c.
Debit Cash, $8,000; Credit Notes Payable, $8,000.
d.
Debit Notes Payable, $8,000; Credit Cash, $8,000.
49. On November 1, 2015, The Bagel Factory signed a $100,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on May 1, 2016. The Bagel Factory should report interest payable at December 31, 2015, in the amount of:
a.$0.
b.$1,000.
c.$2,000.
d.$3,000.
50. On November 1, 2015, The Bagel Factory signed a $100,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on May 1, 2016. The Bagel Factory records the appropriate adjusting entry for the note on December 31, 2015. In recording the payment of the note plus accrued interest at maturity on May 1, 2016, The Bagel Factory would
a.Debit Interest Expense, $2,000.
b.Debit Interest Expense, $1,000.
c.Debit Interest Payable, $2,000.
d.Debit Interest Expense, $3,000.
