MBA 601 Module 3 - Video 5 Study
Guide Exam and Actual Answers.
On November 1, Year 1 Cove Company borrowed $7,000 cash to from Shelter Company. The
one-year note carried a 7% rate of interest. Which of the following shows how the loan will
affect Cove's financial statements on November 1, Year 1? - Answer A = 7,000
L = 7,000
Cash Flows = 7,000 FA
Accrued interest expense will appear on the income statement but not on the statement of cash
flows. This statement is
True/False - Answer True
Clayton Company borrowed $6,000 from the State Bank on April 1, Year 1. The one-year note
carried a 6% rate of interest. The amount of interest expense that Clayton would report in Year
1 and Year 2, respectively would be - Answer $270, and $90.
On August 1, Year 1 Gomez Company borrowed $48,000 cash. The one-year note carried a 5%
rate of interest. Which of the following shows how the December 31, Year 1 recognition of
accrued interest will effect Gomez's ledger accounts? - Answer IP = 1,000
RE = (1,000)
On August 1, Year 1 Gomez Company borrowed $48,000 cash. The one-year note carried a 5%
rate of interest. Which of the following shows how the December 31, Year 1 recognition of
accrued interest will effect Gomez's financial statements? - Answer L = 1,000
E = (1,000)
Exp = 1,000
NI = (1,000)
On August 1, Year 1 Gomez Company borrowed $48,000 cash. The one-year note carried a 5%
rate of interest. Which of the following shows how the accrual of interest expense in Year 1 will
effect Gomez's financial statements? - Answer L = 1,000
e = (1,000)
Exp = 1,000
Guide Exam and Actual Answers.
On November 1, Year 1 Cove Company borrowed $7,000 cash to from Shelter Company. The
one-year note carried a 7% rate of interest. Which of the following shows how the loan will
affect Cove's financial statements on November 1, Year 1? - Answer A = 7,000
L = 7,000
Cash Flows = 7,000 FA
Accrued interest expense will appear on the income statement but not on the statement of cash
flows. This statement is
True/False - Answer True
Clayton Company borrowed $6,000 from the State Bank on April 1, Year 1. The one-year note
carried a 6% rate of interest. The amount of interest expense that Clayton would report in Year
1 and Year 2, respectively would be - Answer $270, and $90.
On August 1, Year 1 Gomez Company borrowed $48,000 cash. The one-year note carried a 5%
rate of interest. Which of the following shows how the December 31, Year 1 recognition of
accrued interest will effect Gomez's ledger accounts? - Answer IP = 1,000
RE = (1,000)
On August 1, Year 1 Gomez Company borrowed $48,000 cash. The one-year note carried a 5%
rate of interest. Which of the following shows how the December 31, Year 1 recognition of
accrued interest will effect Gomez's financial statements? - Answer L = 1,000
E = (1,000)
Exp = 1,000
NI = (1,000)
On August 1, Year 1 Gomez Company borrowed $48,000 cash. The one-year note carried a 5%
rate of interest. Which of the following shows how the accrual of interest expense in Year 1 will
effect Gomez's financial statements? - Answer L = 1,000
e = (1,000)
Exp = 1,000
