Questions from College Accounting

Q: Dividends reduce earnings before taxes. True or false? Explain.

Dividends reduce earnings before taxes. True or false? Explain.

Q: Accrued interest results in the seller paying extra for bonds. True

Accrued interest results in the seller paying extra for bonds. True or false? Explain.

Q: Explain why a bond may sell at a premium.

Explain why a bond may sell at a premium.

Q: Why isn’t Discount on Bonds Payable an immediate expense?

Why isn’t Discount on Bonds Payable an immediate expense?

Q: Premium on Bonds Payable will cause total interest expense to be reduced

Premium on Bonds Payable will cause total interest expense to be reduced. True or false?

Q: The straight-line method of amortizing a bond discount or premium

The straight-line method of amortizing a bond discount or premium will result in an uneven amount of discount or premium that increases or decreases expense each period. Agree or disagree? Why?

Q: What is the carrying value of a bond?

What is the carrying value of a bond?

Q: What is the purpose of an inventory sheet?

What is the purpose of an inventory sheet?

Q: List the three main sections of the statement of cash flows.

List the three main sections of the statement of cash flows.

Q: Explain how net cash flows from operating activities is calculated using the

Explain how net cash flows from operating activities is calculated using the indirect method.