Matching Quiz

Match the following terms and definitions


1				Liabilities for expenses that have been incurred but not yet billed or paid at the end of the accounting period.


2				The date on which a bond is due to be paid in full.


3				The amount payable on a bond’s maturity date.


4				The rate stated on the face of the bond, which is used to compute interest payments.


5				The amount of money that a lender pays (and the company receives) when a bond is issued.


6				A mathematical calculation that determines the amount that one or more payments made in the future are worth today.


7				The amount by which a bond’s issue price exceeds its face value.


8				The amount by which a bond’s issue price is less than its face value.


9				The rate of interest that investors demand from a bond.


10				Potential liabilities that have arisen as a result of a past transaction or event; their ultimate outcome will not be known until a future event occurs or fails to occur.


11				The ratio of liquid assets to current liabilities; liquid assets include cash and cash equivalents, short-term investments, and accounts receivable (net of doubtful accounts).


12				A prearranged agreement that allows a company to borrow any amount of money at any time, up to a prearranged limit.


13				Divides net income before interest and taxes by interest expense to determine the extent to which earnings before taxes and financing costs are sufficient to cover interest incurred on debt.


14				For bonds payable, evenly allocates the amount of bond premium or discount over each period of a bond’s life to adjust interest expense for differences between its stated interest rate and market interest rate.


15				Allocates the amount of bond premium or discount over each period of a bond’s life in amounts corresponding to the bond’s carrying value.

Answer choices for questions 1 through 15

A)	Premium
B)	Line of credit
C)	Stated interest rate
D)	Market interest rate
E)	Times interest earned ratio
F)	Accrued liabilities
G)	Issue price
H)	Effective-interest method of amortization
I)	Discount
J)	Quick ratio
K)	Face value
L)	Straight-line amortization method
M)	Maturity date
N)	Present value
O)	Contingent liabilities

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