Accounting
Chapter 8
Non-Current Liabilities
Assessment Questions
AS-1 ( 1 )
Name the typical forms of non-current debt.
A typical and common form of non-current debt is a term loan from a bank. Another form of
______________________________________________________________________________
non-current debt is bonds.
______________________________________________________________________________
______________________________________________________________________________
AS-2 ( 1 )
What is a bond?
A bond, also known as a fixed-income security, is a fixed interest financial asset issued by
______________________________________________________________________________
governments, companies, banks, public utilities and other large entities. It is a loan from
______________________________________________________________________________
private investors as opposed to a term loan, which is from a bank.
______________________________________________________________________________
AS-3 ( 4 )
An investor pays $83,333 for a bond, but will receive $100,000 when the bond matures. Has the investor bought the bond at a discount or at a premium?
The investor has bought the bond at a discount. A discount bond is bought below par (face
______________________________________________________________________________
value). At maturity the buyer receives the face value of the bond.
______________________________________________________________________________
______________________________________________________________________________
AS-4 ( 3 , 4 )
Bonds can be issued at different prices relative to their face value. Name the three types of bonds relative to face value.
Par – issued at face value
______________________________________________________________________________
Discounted – issued at a price less than face value
______________________________________________________________________________
Premium – issued at a price more than face value.
Non-Current Liabilities
Assessment Questions
AS-1 ( 1 )
Name the typical forms of non-current debt.
A typical and common form of non-current debt is a term loan from a bank. Another form of
______________________________________________________________________________
non-current debt is bonds.
______________________________________________________________________________
______________________________________________________________________________
AS-2 ( 1 )
What is a bond?
A bond, also known as a fixed-income security, is a fixed interest financial asset issued by
______________________________________________________________________________
governments, companies, banks, public utilities and other large entities. It is a loan from
______________________________________________________________________________
private investors as opposed to a term loan, which is from a bank.
______________________________________________________________________________
AS-3 ( 4 )
An investor pays $83,333 for a bond, but will receive $100,000 when the bond matures. Has the investor bought the bond at a discount or at a premium?
The investor has bought the bond at a discount. A discount bond is bought below par (face
______________________________________________________________________________
value). At maturity the buyer receives the face value of the bond.
______________________________________________________________________________
______________________________________________________________________________
AS-4 ( 3 , 4 )
Bonds can be issued at different prices relative to their face value. Name the three types of bonds relative to face value.
Par – issued at face value
______________________________________________________________________________
Discounted – issued at a price less than face value
______________________________________________________________________________
Premium – issued at a price more than face value.