loader  Loading... Please wait...

Question(s) / Instruction(s):

All of the following statements regarding uncertainty in liabilities are true except:

a)            A company can be aware of an obligation but not know how much will be required to settle it.

b)            A company can have an obligation of a known amount to a known creditor but not know when it must be paid.

c)            A company only records liabilities when it knows whom to pay, when to pay, and how much to pay.

d)            Liabilities can involve uncertainty in whom to pay.

e)            A company can create a known amount when issuing a note even though the holder of the note may not be known until the maturity date.

 

A company had net sales of $650,000, total sales of $800,000, and an average accounts receivable of $77,500. Its accounts receivable turnover equals (Round your final answer to two decimal places):

a)            0.12

b)            0.81

c)            10.32

d)            8.39

e)            0.10

 

On March 17, Grady Company agrees to accept a 60-day, 8%, $5,700 note from Alert Company to extend the due date on an overdue account. What is the journal entry needed to record the payment of the note by Alert Company on the maturity date?

 

a)            Debit Cash $5,776; credit Interest Revenue $76; credit Notes Receivable $5,700.

b)            Debit Notes Payable $5,700; credit Interest Expense $76, credit Cash $5,624.

c)            Debit Cash $5,776; credit Interest Revenue $76; credit Notes Payable $5,700.

d)            Debit Notes Payable $5,700; debit Interest Expense $114; credit Cash $5,814.

e)            Debit Notes Payable $5,700; debit Interest Expense $76; credit Cash $5,776.

 

Teller purchased merchandise from TechCom on October 17 of the current year and TechCom accepted Teller's $7,200, 90-day, 7% note. What entry should TechCom make on January 15 of the next year when the note is paid? (Use 360 days a year. Do not round intermediate calculations.)

a)            Debit Cash $7,326; credit Interest Revenue $126; credit Notes Receivable $7,200.

b)            Debit Cash $4,920; credit Interest Revenue $100; credit Interest Receivable $20; credit Notes Receivable $4,800.

c)            Debit Cash $7,326; credit Notes Receivable $7,326.

d)            Debit Notes Receivable $7,200; debit Interest Receivable $126; credit Sales $7,326.

e)            Debit Cash $7,326; credit Interest Revenue $21; credit Interest Receivable $105; credit Notes Receivable $7,200.

 

On December 31 of the current year, a company's unadjusted trial balance included the following: Accounts Receivable, debit balance of $98,900; Allowance for Doubtful Accounts, credit balance of $1,131. What amount should be debited to Bad Debts Expense, assuming 4% of outstanding accounts receivable at the end of the current year will be uncollectible?

a)            $3,956.

b)            $2,825.

c)            $1,131.

d)            $1,933.

e)            $5,087.

 

An employee earned $46,000 during the year working for an employer. The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%. The employee's annual FICA taxes amount is:

a)            $3,519.00.

b)            $667.00.

c)            Zero, since the employee's pay exceeds the FICA limit.

d)            $7,038.00.

e)            $2,852.00.

 

Cambria owns equipment that cost $100,700 with accumulated depreciation of $68,800. Cambria asks $36,800 for the equipment but sells the equipment for $34,200. Compute the amount of gain or loss on the sale.

a)            $4,900 loss.

b)            $4,900 gain.

c)            $2,300 gain.

d)            $2,600 gain.

e)            $2,300 loss.

 

In the accounting records of a defendant, lawsuits:

a)            Should always be disclosed.

b)            Should never be recorded.

c)            Should always be recorded.

d)            Are estimated liabilities.

e)            Should be recorded if payment for damages is probable and the amount can be reasonably estimated.

 

Find Similar Answers by Subject


Student Reviews

Rate and review your solution! (Please rate on a Scale of 1 - 5. Top Rating is 5.)


Expert's Answer
Download Solution:
$2.00

This solution includes:

  • Plain text
  • Cited sources when necessary
  • Attached file(s)
  • Solution Document(s)



Reach Us

408-538-8534

20-3582-4059

39-008-4233

+1-408-904-6494