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NEW QUESTION: 1
If bonds are sold at a discount and the effective interest method of amortization is used, interest expense will:
A. Remain constant from one period to another.
B. Increase from one period to another.
C. Be less than the cash interest payment each period.
D. Equal the cash interest payment each period.
Answer: B
Explanation:
Interest expense equals the carrying value of the liability at the beginning of the period times the effective interest rate. The carrying value of the liability equals the face value of the of the bond minus the discount. As the discount is amortized over the life of the bond, the carrying value increases, consequently the interest expense increases over the life of the bond.
NEW QUESTION: 2
Ann, the IT director, wants to ensure that as hoc changes are not making their way to the production applications.
A. Permission reviews
B. Perform routine audits
C. Incident management
D. Change management
Answer: D
NEW QUESTION: 3
Which of the following situations justifies the release of an interim report to management and the board?
- The internal auditor is convinced that the audit observations require immediate attention. - The internal auditor would like to communicate a change in engagement scope for the activity under review. - The internal auditor notes that the engagement may extend over a longer time period. - The audit supervisor believes that issuing interim reports eases supervisory review and controls over working papers.
A. 1, 2, and 3 only.
B. 2 and 3 only.
C. 1 and 3 only.
D. 2, 3, and 4 only.
Answer: A
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