QUESTION 1

1. Which of the following accounts is credited by the seller when tax is collected on retail sales?

		Accounts Payable
		Payroll Tax
		Sales Tax Payable
		Unearned Revenue

5 points   

QUESTION 2

1. Which of the following is the amount the borrower must pay back to the bondholders at maturity?

		Market value
		Present value
		Stated interest value
		Principal amount

5 points   

QUESTION 3

1. Which of the following describes a serial bond?

		A bond that matures in installments at regular intervals
		A bond that gives the bondholder a claim for specific assets
		A bond that matures at one specified time
		A bond that is not backed by specific assets

5 points   

QUESTION 4

1. If bonds with a face value of $205,000 are issued at par, the amount of cash proceeds is __________.

		$204,895
		$205,000
		$215,250
		$225,500

5 points   

QUESTION 5

1. Which of the following is a liability account?

		Prepaid Advertising
		Cash
		Building
		Unearned Rent

5 points   

QUESTION 6

1. Which of the following would be included in the journal entry to record the payment of sales tax payable?

		A debit to Sales Tax Payable
		A credit to Sales Tax Expense
		A debit to Sales Tax Expense
		A credit to Sales Tax Payable

5 points   

QUESTION 7

1. Pluto Corp. sold goods, with a selling price of $9,021, for cash. The state sales tax rate is 10%. What amount is credited to the Sales Revenue account?

		$9,021
		$9,923
		$902
		$8,119

5 points   

QUESTION 8

1. Barter, Inc. sold goods for $894,500 on account. The company operates in a state that imposes a 6% sales tax. What is the amount of the sales tax payable to the state?

		$53,670
		$26,835
		$13,418
		$107,340

5 points   

QUESTION 9

1. Amounts owed for products or services purchased on account are called __________.

		accounts payable
		unearned revenue
		accrued expense
		warranty payable

5 points   

QUESTION 10

1. Which of the following is a characteristic of a current liability?

		It creates a present obligation for future payment of cash or services.
		It cannot be settled with services.
		It is an avoidable obligation.
		It occurs because of a future transaction or event.

5 points   

QUESTION 11

1. Which term refers to the process by which businesses prepare their financial statements?

		Post-closing balance journaling
		Trial balance calculation
		The accounting cycle
		Tax preparation

5 points   

QUESTION 12

1. Justice Company purchased a machine for $50,000 two years ago. The machine had no residual value and had an estimated useful life of 10 years. If the company uses the straight-line depreciation method, calculate the current book value of the machine.

		$30,000
		$40,000
		$35,000
		$45,000

5 points   

QUESTION 13

1. Which of the following is recorded on the left side of a T-account?

		Residual value
		Book value
		Credits
		Debits

5 points   

QUESTION 14

1. Dynamic Production Services started the year with total assets of $180,000 and total liabilities of $80,000. The company is a sole proprietorship. The revenues and the expenses for the year amounted to $150,000 and $75,000, respectively. During the year, there were no new capital contributions and the owner withdrew $60,000. Calculate Dynamic’s net income for the year.

		$80,000
		$100,000
		$60,000
		$75,000

5 points   

QUESTION 15

1. What are the two types of inventory accounting systems used by businesses?

		FIFO and LIFO
		Perpetual and periodic
		Wholesale and retail
		Manufacturer and producer

5 points   

QUESTION 16

1. The goal of reporting realistic figures and never overstating assets or net income applies to the __________.

		conservatism principle
		materiality concept
		disclosure principle
		consistency principle

5 points   

QUESTION 17

1. Which of the following keeps accountants from having to report every item in strict accordance with the accounting principles?

		Conservatism
		Materiality concept
		Disclosure principle
		Consistency principle

5 points   

QUESTION 18

1. The equity of Capital Company is $200,000 and the total liabilities are $30,000. The total assets are ___________.

		$170,000
		$200,000
		$30,000
		$230,000

5 points   

QUESTION 19

1. The expected value of a depreciable asset at the end of its useful life is called __________.

		residual value
		book value
		accrued revenue
		depreciation

5 points   

QUESTION 20

1. Which of the following organizations published standards that serve as global accounting guidelines used by over 120 countries?

		International Accounting Standards Board (IASB)
		Public Company Accounting Oversight Board (PCAOB)
		Financial Accounting Standards Board (FASB)
		American Institute of Certified Public Accountants (AICPA)