TB
Financial & Managerial Accounting 20th Edition by
Ac
Jan Williams, Mark S. Bettner| TEST BANK
er
Chapters 1-26| All Chapters Entailing Verified
Questions & 100% Accurate Answers for the Study
All Answers at the Back of Each Chapter
Page | 1
, TB
Chapter 1: Accounting: Information for Decision Making
Ac
1) Future value is the amount that must be invested today at a specific interest rate to receive a
particular amount at some future date.
er
⊚ true
⊚ false
2) The present value of an ordinary annuity is the amount that must be invested today at a specific
interest rate to in order to receive a particular amount at the end of a specified number of future
periods.
⊚ true
⊚ false
3) The future value of an investment gradually increases toward its present value amount.
⊚ true
⊚ false
4) Compound interest assumes that the interest earned on a particular investment is reinvested.
⊚ true
⊚ false
5) Discounting a future value amount will determine its present value amount.
⊚ true
⊚ false
6) The lower the discount rate of an investment, the lower the present value of the investment.
⊚ true
⊚ false
Page | 2
, TB
7) Annuities provide a series of cash flows to investors at regular intervals for a specified period of
Ac
time.
⊚ true
er
⊚ false
8) The market price of a bond is equal to the discounted present value of its future cash flows.
⊚ true
⊚ false
9) An ordinary annuity is the discounted present value of a series of cash flows made at the
beginning of each of a specified number of periods.
⊚ true
⊚ false
10) Interest rate percentages can be expressed in a variety of ways, including monthly, quarterly,
semiannually, and annually.
⊚ true
⊚ false
11) The difference between a present value and a related future value amount depends on (1) the
discount rate and (2) the length of time over which the present value accumulates interest.
⊚ true
⊚ false
12) The liability for post-retirement benefits is reported at the discounted present value of anticipated
future cash outlays to retired employees in the form of pensions, health insurance premiums, etc.
⊚ true
⊚ false
Page | 3
, TB
13) As discount rates used to value investments increase, the present values of those investments
Ac
decreases.
⊚ true
er
⊚ false
14) Present values of future cash flows can only be calculated through the application of complex
formulas.
⊚ true
⊚ false
15) The future value of an investment’s present value today can be determined by multiplying its
present value by the appropriate factor obtained from a future value table.
⊚ true
⊚ false
16) The future value of an ordinary annuity can be determined by multiplying the periodic annuity
payment by the appropriate factor obtained from a future value of an ordinary annuity table.
⊚ true
⊚ false
17) The present value of an investment that promises to pay a single lump-sum amount in the future
can be calculated by multiplying the future lump-sum amount by the appropriate factor obtained
from a present value of $1 table.
⊚ true
⊚ false
18) The present value of an ordinary annuity is calculated by multiplying the annuity’s periodic cash
payments by the appropriate factor obtained from a future value of an ordinary annuity table.
⊚ true
⊚ false
Page | 4
Financial & Managerial Accounting 20th Edition by
Ac
Jan Williams, Mark S. Bettner| TEST BANK
er
Chapters 1-26| All Chapters Entailing Verified
Questions & 100% Accurate Answers for the Study
All Answers at the Back of Each Chapter
Page | 1
, TB
Chapter 1: Accounting: Information for Decision Making
Ac
1) Future value is the amount that must be invested today at a specific interest rate to receive a
particular amount at some future date.
er
⊚ true
⊚ false
2) The present value of an ordinary annuity is the amount that must be invested today at a specific
interest rate to in order to receive a particular amount at the end of a specified number of future
periods.
⊚ true
⊚ false
3) The future value of an investment gradually increases toward its present value amount.
⊚ true
⊚ false
4) Compound interest assumes that the interest earned on a particular investment is reinvested.
⊚ true
⊚ false
5) Discounting a future value amount will determine its present value amount.
⊚ true
⊚ false
6) The lower the discount rate of an investment, the lower the present value of the investment.
⊚ true
⊚ false
Page | 2
, TB
7) Annuities provide a series of cash flows to investors at regular intervals for a specified period of
Ac
time.
⊚ true
er
⊚ false
8) The market price of a bond is equal to the discounted present value of its future cash flows.
⊚ true
⊚ false
9) An ordinary annuity is the discounted present value of a series of cash flows made at the
beginning of each of a specified number of periods.
⊚ true
⊚ false
10) Interest rate percentages can be expressed in a variety of ways, including monthly, quarterly,
semiannually, and annually.
⊚ true
⊚ false
11) The difference between a present value and a related future value amount depends on (1) the
discount rate and (2) the length of time over which the present value accumulates interest.
⊚ true
⊚ false
12) The liability for post-retirement benefits is reported at the discounted present value of anticipated
future cash outlays to retired employees in the form of pensions, health insurance premiums, etc.
⊚ true
⊚ false
Page | 3
, TB
13) As discount rates used to value investments increase, the present values of those investments
Ac
decreases.
⊚ true
er
⊚ false
14) Present values of future cash flows can only be calculated through the application of complex
formulas.
⊚ true
⊚ false
15) The future value of an investment’s present value today can be determined by multiplying its
present value by the appropriate factor obtained from a future value table.
⊚ true
⊚ false
16) The future value of an ordinary annuity can be determined by multiplying the periodic annuity
payment by the appropriate factor obtained from a future value of an ordinary annuity table.
⊚ true
⊚ false
17) The present value of an investment that promises to pay a single lump-sum amount in the future
can be calculated by multiplying the future lump-sum amount by the appropriate factor obtained
from a present value of $1 table.
⊚ true
⊚ false
18) The present value of an ordinary annuity is calculated by multiplying the annuity’s periodic cash
payments by the appropriate factor obtained from a future value of an ordinary annuity table.
⊚ true
⊚ false
Page | 4
