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Financial Accounting Quiz

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Question

1);Which of the following would be considered an estimated liability?;A) Notes payable;B) Warranties payable;C) Pending litigation;D) Sales tax payable;2);Current liabilities are expected to be settled within;A) 3 months.;B) 6 months.;C) 1 year.;D) more than 1 year.;3);A company signs a note payable for $3,500 at 9% for 45 days. How much interest (to the nearest cent) will the company owe using a 360-day year?;A) $354.38;B) $315.00;C) $ 39.38;D) $ 38.84;4);Utilize the ________ principle to estimate warranty liabilities.;A) matching;B) entity;C) conservatism;D) objectivity;5);Which of the following would NOT be considered a contingent liability?;A) Pending legal action;B) Potential fines from the EPA;C) Mortgage payable;D) Cosigning a loan;6);a 3 month, 7% note for $14,000 is signed on Nevmber 1. What is the entr to accrue interest on December 31?;a) debit to interest expense for $245, creit to interest payable for $245.;b) debit to interest expense for $245, credit to cash for $245.;c) debit to interest expense for $163.33, credit to interest payable for $163.33;d) debit to interest expense for $163.33, credit to cash for $163.33;7);if cash sales are made of $100,000, and a state-imposed sales tax of 5% is collected, which of the following will occur in the journal entry to record the sale?;a) debit to cash for 100,000;b) credit to sales tax expense for 5,000;c) credit to sales revenue of 100,000;d) credit to sales revenue of 105,000;8);which of the following will be reported in the balance sheet as current liability?;a) income tax payable due in 4 month;b) mortgage payable due in 18 months;c) current portion of long-term payable;d) both a and c will be reported in the balance sheet as current liabilities;9);How should contingent liabilities be treated if the outcome is probable and the amount can be reasonably estimated?;a) journalize the entry for the estimated amount, recognizing it on the balance sheet only;b) create a note to the financial statements sharing the probability of the contingency loss only.;c) do both a and b;d) do neither. we don?t record loss contingencies until we are required to pay under any circumstances.;10);If sales of 15,000 are made for the month, and estimated warranty costs are 3%, how do we recognize the warranty expense for the month?;a) debit warranty payable for 450, credit warranty expense for 450.;b) debit warranty expense for 450, credit cash for 450;c) debit warranty expense for 450, credit warranty payable for 450;d) no entry is made to estimae the warranty cost.

 

Paper#76432 | Written in 18-Jul-2015

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