Reference no: EM132765867

Problem 1: Which of the following accounting concepts states that before a transaction is recorded, sufficient evidence must exist to allow two or more knowledgeable individuals to reach essentially the same conclusion about the transaction?

a) Continuity assumption

b) Separate entity assumption

c) Cost principle

d) Reliability quality

Problem 2: Corporations issue convertible debt for two main reasons. One is the desire to raise equity capital assuming conversion would arise when the original debt is converted. The other is

a) The ease with which convertible debt is sold even if the entity has a poor credit rating.

b) The fact that equity capital has issue costs that convertible debt does not.

c) That many corporations can obtain financing at lower rate.

d) That convertible bonds will always sell at a premium.