Accounting for liabilities

FELIPE GUARDIA
Quiz by FELIPE GUARDIA, updated more than 1 year ago
FELIPE GUARDIA
Created by FELIPE GUARDIA about 3 years ago
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Description

Vocabulary # 7

Resource summary

Question 1

Question
[blank_start]Discount on bonds payable[blank_end] is a contra-liability that is deducted from bonds payable on the balance sheet; it is the difference between the face value of the bond and its selling price when the selling price is less than the face (par) value.
Answer
  • Discount on bonds payable

Question 2

Question
[blank_start]Premium on bonds payable[blank_end] is an adjunct-liability that is added to bonds payable on the balance sheet; it is the difference between the face value of the bond and its selling price, when the selling price is more than the face (par) value.
Answer
  • Premium on bonds payable

Question 3

Question
[blank_start]Financial leverage[blank_end] is the use of borrowed funds to increase earnings.
Answer
  • Financial leverage

Question 4

Question
[blank_start]Bonds issued at a discount[blank_end] are bonds issued for an amount less than the face value of the bond. This happens when the market rate of interest is greater than the bond´s stated rate of interest.
Answer
  • Bonds issued at a discount

Question 5

Question
[blank_start]Proceeds[blank_end] are the amount of cash the bond issuer collects from the bondholders when the bonds are issued.
Answer
  • Proceeds

Question 6

Question
A [blank_start]bond[blank_end] is an interest-bearing, long-term note payable issued by corporations, universities, and governmental agencies.
Answer
  • bond

Question 7

Question
[blank_start]Estimated liabilities[blank_end] are obligations that have some uncertainty in the amount, such as the cost to honor a warranty.
Answer
  • Estimated liabilities

Question 8

Question
[blank_start]Bonds issued at a premium[blank_end] are bonds issued for an amount more than the face value of the bond. This happens when the market rate of interest is less than the bond´s stated rate of interest.
Answer
  • Bonds issued at a premium

Question 9

Question
[blank_start]Capital structure[blank_end] is the combination of debt and equity that a firm uses to finance its business.
Answer
  • Capital structure

Question 10

Question
[blank_start]Amortization schedule[blank_end] is a chart that shows the amount of principal and the amount of interest that make up each payment of a loan.
Answer
  • Amortization schedule
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