Chapter 15 Accounting 26e Carl Warren James M Reeve Jonathan Duchac

Chapter 15 Accounting 26e Carl Warren James M Reeve Jonathan Duchac

 

Complete Chapter Questions With Answers

 

Sample Questions Are Posted Below

 

1. Most companies invest excess cash in bonds as investments in order to profit long-term from the growth of the
   1. True
   2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.15-01 – 15-01

ACCREDITING STANDARDS:   ACCT.ACBSP.APC.21 – Corporate Investments Accounting

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

2. Although marketable securities may be retained for several years, they continue to be classified as temporary, provided they are readily marketable and can be sold for cash at any time.
   1. True
   2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.15-01 – 15-01

ACCREDITING STANDARDS:   ACCT.ACBSP.APC.21 – Corporate Investments Accounting

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

3. As with other assets, the cost of a bond investment includes all costs related to the purchase.
   1. True
   2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.15-02 – 15-02

ACCREDITING STANDARDS:   ACCT.ACBSP.APC.21 – Corporate Investments Accounting

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

 

 

 

4. If the bonds are purchased between interest dates, the purchase price includes accrued interest since the last interest payment.
   1. True
   2. False

 

ANSWER:                                  True

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.15-02 – 15-02

ACCREDITING STANDARDS:   ACCT.ACBSP.APC.21 – Corporate Investments Accounting

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic

5. When a bond is purchased for an investment, the purchase price, minus the brokerage commission, plus any accrued interest is recorded.
   1. True
   2. False

 

ANSWER:                                  False

DIFFICULTY:                           Easy

Bloom’s: Remembering

LEARNING OBJECTIVES:        ACCT.WARD.16.15-02 – 15-02

ACCREDITING STANDARDS:   ACCT.ACBSP.APC.21 – Corporate Investments Accounting

ACCT.AICPA.FN.03 – Measurement BUSPROG: Analytic