F5 Payables and Accrued Liabilities

Question 1

Non interest notes payable is reported at present value of future cash flows. True or false?

Answer 1

True

Question 2

ARO

Answer 2

Asset Retirement Obligation - retirement of a long-lived asset

Question 3

The market value of a bond issued at a discount or premium is equal to the PV of 2 sources of cash flows:

Answer 3

1. PV of the principals amount PLUS
2. PV of the total amount of future interest payments
3. both using the market (effective) rate of interest.

Question 4

Over the life of the bond, the total amount of amortization is the same using BOTH methods. True / False?

Answer 4

True

Question 5

Interest expense is (less or more) than interest payable each period because of the amortization of the premium.

Answer 5

less