1.The higher the interest rate the lower the present value of a future amount. Why?
2.If a lease is recorded as a capital lease, what is the relationship of the lease payments and the lease liability?
3.Why do companies prefer to classify leases as operating leases rather than as capital leases?
4.If a bond's stated interest rate is below the market interest rate, will the bond sell at premium or at a discount? Why?
5.What are the primary differences between debt financing &equity financing?
6.Are partners legally liable for the actions of other partners? Explain.
7. In what ways are corporate profits subject to double taxation?
8.What is the purpose of having a par value for stock?
9.The dividend payout ratio for Deedle Company is 40%. What does this mean?
10. When a security is sold, what information must be known to account for that transaction?
11.What is the difference between a realized gain or loss and an unrealized gain or loss?
12. How does accounting for changes in the value of trading and available-for-sale securities differ?