TEST BANKFOR Long-Term Liabilities CHAPTER 10 LATEST UPDATED
VERSION 2026 WITH A CORRECT ANSWERS.
True / False
1. Discount on Bonds Payable is classified as a current liability.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
LEARNING OBJECTIVES: FACC.PONO.13.10-01 - LO: 10-01
KEYWORDS: Bloom's: Remembering
2. All liabilities that are not classified as current liabilities are classified as long-term.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
LEARNING OBJECTIVES: FACC.PONO.13.10-01 - LO: 10-01
KEYWORDS: Bloom's: Remembering
3. Bonds are generally issued in denominations of $1,000.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
LEARNING OBJECTIVES: FACC.PONO.13.10-02 - LO: 10-02
KEYWORDS: Bloom's: Remembering
4. Serial bonds are unique because the interest is paid as a series of daily payments.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
LEARNING OBJECTIVES: FACC.PONO.13.10-02 - LO: 10-02
KEYWORDS: Bloom's: Remembering
5. Bonds are typically issued in denominations of $10,000.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
,Chapter 10: Long-Term Liabilities
LEARNING OBJECTIVES: FACC.PONO.13.10-02 - LO: 10-02
KEYWORDS: Bloom's: Remembering
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
,Chapter 10: Long-Term Liabilities
6. If Tanner Company becomes less creditworthy, the market price of its bonds will decline.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
LEARNING OBJECTIVES: FACC.PONO.13.10-02 - LO: 10-02
KEYWORDS: Bloom's: Understanding
7. Debenture bonds are backed by specific collateral of the issuing company.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
LEARNING OBJECTIVES: FACC.PONO.13.10-02 - LO: 10-02
KEYWORDS: Bloom's: Remembering
8. Convertible bonds normally sell at a higher price than non-convertible bonds.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
LEARNING OBJECTIVES: FACC.PONO.13.10-02 - LO: 10-02
KEYWORDS: Bloom's: Understanding
9. If an investor has the right to retire the bonds, they are referred to as callable.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
LEARNING OBJECTIVES: FACC.PONO.13.10-02 - LO: 10-02
KEYWORDS: Bloom's: Remembering
10. Callable bonds may be retired by the issuer before their specified due date.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
LEARNING OBJECTIVES: FACC.PONO.13.10-02 - LO: 10-02
KEYWORDS: Bloom's: Remembering
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, Chapter 10: Long-Term Liabilities
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
VERSION 2026 WITH A CORRECT ANSWERS.
True / False
1. Discount on Bonds Payable is classified as a current liability.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
LEARNING OBJECTIVES: FACC.PONO.13.10-01 - LO: 10-01
KEYWORDS: Bloom's: Remembering
2. All liabilities that are not classified as current liabilities are classified as long-term.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
LEARNING OBJECTIVES: FACC.PONO.13.10-01 - LO: 10-01
KEYWORDS: Bloom's: Remembering
3. Bonds are generally issued in denominations of $1,000.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
LEARNING OBJECTIVES: FACC.PONO.13.10-02 - LO: 10-02
KEYWORDS: Bloom's: Remembering
4. Serial bonds are unique because the interest is paid as a series of daily payments.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
LEARNING OBJECTIVES: FACC.PONO.13.10-02 - LO: 10-02
KEYWORDS: Bloom's: Remembering
5. Bonds are typically issued in denominations of $10,000.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
,Chapter 10: Long-Term Liabilities
LEARNING OBJECTIVES: FACC.PONO.13.10-02 - LO: 10-02
KEYWORDS: Bloom's: Remembering
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
,Chapter 10: Long-Term Liabilities
6. If Tanner Company becomes less creditworthy, the market price of its bonds will decline.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
LEARNING OBJECTIVES: FACC.PONO.13.10-02 - LO: 10-02
KEYWORDS: Bloom's: Understanding
7. Debenture bonds are backed by specific collateral of the issuing company.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
LEARNING OBJECTIVES: FACC.PONO.13.10-02 - LO: 10-02
KEYWORDS: Bloom's: Remembering
8. Convertible bonds normally sell at a higher price than non-convertible bonds.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
LEARNING OBJECTIVES: FACC.PONO.13.10-02 - LO: 10-02
KEYWORDS: Bloom's: Understanding
9. If an investor has the right to retire the bonds, they are referred to as callable.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
LEARNING OBJECTIVES: FACC.PONO.13.10-02 - LO: 10-02
KEYWORDS: Bloom's: Remembering
10. Callable bonds may be retired by the issuer before their specified due date.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
LEARNING OBJECTIVES: FACC.PONO.13.10-02 - LO: 10-02
KEYWORDS: Bloom's: Remembering
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
, Chapter 10: Long-Term Liabilities
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
