llll 39% ( < 12:00 80 IFA II Home E... Part I: Multiple Choices (1 Mark Each) 1. Balances owed to others for goods or services purchased on open account are: A. Notes payable B. liability C. Loan payable D. Account payable 2. On November 1, 2024, ABC Company has borrowed cash of Br 100,000 from Commercial bank of Ethiopia by issuing a Br 100,000 six months 12% interest bearing note. What is balance of interest expense on the note on December 31, 2024? A. Br 12,000 B. Br 5,000 3. Which of the following may be a current liability? A. Withheld Income Taxes B. Deposits Received from Customers C. Deferred Revenue D. All of the above 4. A typical provision is: A. Bonds payable B. A warranty liability 5. When is a contingent liability recorded? A. When the amount can be reasonably estimated. C. Br 2,000 D. Br 6,000 C. Cash D. Accounts payable B. When the future events are probable to occur and the amount can be reasonably estimated. C. When the future events are probable to occur. D. When the future events will possibly occur and the amount can be reasonably estimated. 6. Liabilities are: A. Any accounts having credit balances after closing entries are made. B. Deferred credits that are recognized and measured in conformity with generally accepted accounting principles. C. Obligations to transfer ownership shares to other entities in the future. D. Obligations arising from past transactions and payable in assets or services in the future. 7. A possible asset that arises from past events and whose existence will be confirmed by the occurrence or non-occurrence of uncertain future events not wholly within the control of the company is: 1| Page A. Contingent asset B. Receivables C. Investment D. Permanent asset 8. When the effective-interest method is used to amortize bond premium or discount, the periodic interest expense will A. Increase if the bonds were issued at a discount. B. Increase if the bonds were issued at a premium. C. Decrease if the bonds were issued at a discount. D. Increase if the bonds were issued at either a discount or a premium. 9. A bond issued at discount when: A. Market interest rate is greater than coupon interest rate B. Market interest rate is less than coupon interest rate C. Market interest rate is equal with coupon interest rate D. None of the above 10. Periodic interest payment on the long-term bond is calculated as: A. (Coupon interest rate) *carrying value beginning B. (Coupon interest rate) *face value of the bond C. (Effective market interest rate) *carrying value beginning D. (Effective market interest rate) *face value of the bond 11. ABC Company issued Br100,000 in bonds, due in five years with 9 percent interest payable annually at year-end. At the time of issue, the market rate for such bonds is 11 percent. What is the bond price? A. Br 100,000 B. Br 33,268 C. Br 59,344 D. Br 92,612 12. If the bond issued at discount, periodic discount amortization using effective interest method is calculated as: A. Interest expense minus interest payment B. Interest payment minus interest expense C. Interest expense plus interest payment D. Interest payment plus interest expense መስ ነ በድሬዳዋ ለምትገኙ ወጣቶች በሙሉ! ጋር የመስራት የወጣቶች መማክርት ቡድን (MYG) አባል በመሆን ለለውጥ ድምጽ ሁኑ! M-YAG Sign up