Reference no: EM132935182

Fill in blanks unit 1 financial accounting

1. Question
Under _____straightline amortization_______, an equal amount of discount is allocated to each interest period, whereas, under the __effective interest__________ method of amortization, interest expense is calculated as a constant percentage of the bond carrying value.
(effective interest)

2. Question
Although one can readily determine the present value factors for a lump sum via tables or computers, an equally simple method is to just divide "1" by _future value___________ , where "n" is the number of periods and "i" is the interest rate per period.
o ("1 + i" raised to the "nth" power,1 + i raised to the nth power)

3. Question
An ________annuity____ is a series of equal cash flows.
Question
The provisions of a bond issue are normally stipulated in an accompanying document called a __bond indenture__________.

5. Question
In contrast to secured bonds, _debenture bonds have no assets pledged as security.

6. Question
A fund that is set aside to provide for the eventual repayment of bonds at maturity is known as a _bond sinking fund_.

7. Question
The set amount to be repaid on a bond's maturity date is known as _carrying value_, whereas, the bond payable amount less any unamortized discount or plus any unamortized premium is known as ____face value________.

8. Question
Premium amortization causes interest expense to _decrease__.

9. Question
Ratio analysis of indebtedness provides clues about the financial strength of an entity, but the user of the financial statements should look to the notes to determine additional information about other ____________ and ____________.
o (commitments,alternative financing) (interest rates on debt)

10. Question
For bonds issued between interest dates, the issuer will receive accrued interest on the _issue______ date, and repay this interest on the next payment____________ date.