ACCT 2101- Chapter 10 Revision Test
Questions and Correct Answers.
Journal entry to pay sales tax - Answer -Debit sales tax payable
-Credit cash
Secured bonds - Answer Have specific assets of the issuer pledged as collateral for the bonds
Unsecured bonds - Answer Issued against the general credit of the borrower
Convertible bonds - Answer Bonds that can be converted into common stock at the
bondholder's option
Callable bonds - Answer Bonds that the issuing company can redeem at a stated dollar
amount prior to maturity
Bond certificate - Answer Issued to the inventory to provide evidence of the investor's claim
against the company
Face value - Answer Amount of principal due at a the maturity date
Maturity date - Answer Date that the final payment is due to the inventory from the issuing
company
Contractual interest rate - Answer Rate used to determine the amount of cash interest the
borrower pays and the inventory receives
Time value of money - Answer Indicates the relationship between time and money
Market price of bond based on 3 factors - Answer 1. Dollar amounts to be received
2. Length of time until the amounts are received
3. Market interest rate
Questions and Correct Answers.
Journal entry to pay sales tax - Answer -Debit sales tax payable
-Credit cash
Secured bonds - Answer Have specific assets of the issuer pledged as collateral for the bonds
Unsecured bonds - Answer Issued against the general credit of the borrower
Convertible bonds - Answer Bonds that can be converted into common stock at the
bondholder's option
Callable bonds - Answer Bonds that the issuing company can redeem at a stated dollar
amount prior to maturity
Bond certificate - Answer Issued to the inventory to provide evidence of the investor's claim
against the company
Face value - Answer Amount of principal due at a the maturity date
Maturity date - Answer Date that the final payment is due to the inventory from the issuing
company
Contractual interest rate - Answer Rate used to determine the amount of cash interest the
borrower pays and the inventory receives
Time value of money - Answer Indicates the relationship between time and money
Market price of bond based on 3 factors - Answer 1. Dollar amounts to be received
2. Length of time until the amounts are received
3. Market interest rate
