Question 1

Which of the following transactions will decrease the accounts payable turnover ratio?

Accepted Answer

A) Using cash to pay an accounts payable balance. 
B) Selling inventory on account. 
C) Selling inventory for cash. 
D) A customer returning inventory sold on account. 
A) Using cash to pay an accounts payable balance. 
B) Selling inventory on account. 
C) Selling inventory for cash. 
D) A customer returning inventory sold on account.

Question 2

A company's income statement reported net income of $80,000 during 2019.The income tax return excluded a revenue item of $10,000 (reported on the income statement)because under the tax laws the $10,000 would not be reported for tax purposes until 2020.
Prepare the journal entry to record the 2019 income tax expense assuming a 21% tax rate.

Accepted Answer

The answer of A company's income statement reported net income...

Question 3

Rusty Corporation purchased a rust-inhibiting machine by paying $50,000 cash on the purchase date and agreeing to pay $10,000 every three months during the next two years.The first payment is due three months after the purchase date.Rusty's incremental borrowing rate is 8%.(FV of $1,PV of $1,FVA of $1,and PVA of $1)(Use the appropriate factor(s)from the tables provided. ) 
-The machine reported on the balance sheet as of the purchase date is closest to:

Accepted Answer

A) $123,255. 
B) $130,000. 
C) $80,000. 
D) $73,255. 
A) $123,255. 
B) $130,000. 
C) $80,000. 
D) $73,255.

Question 4

Young Company is involved in a lawsuit.When would the lawsuit be recorded as a liability on the balance sheet?

Accepted Answer

A) When the loss probability is remote and the amount can be reasonably estimated. 
B) When the loss is probable and the amount can be reasonably estimated. 
C) When the loss probability is reasonably possible and the amount can be reasonably estimated. 
D) When the loss is probable regardless of whether the loss can be reasonably estimated. 
A) When the loss probability is remote and the amount can be reasonably estimated. 
B) When the loss is probable and the amount can be reasonably estimated. 
C) When the loss probability is reasonably possible and the amount can be reasonably estimated. 
D) When the loss is probable regardless of whether the loss can be reasonably estimated.

Question 5

Answer the following four questions.
A.What is a contingent liability?
B.When must a contingent liability be recorded through a journal entry?
C.When should a contingent liability be disclosed in the footnotes to the financial statements?
D.When is disclosure of a contingent liability not required?

Accepted Answer

A.Contingent liabilities are potential l

Question 6

Your goal is to be able to withdraw $5,000 for each of the next ten years beginning one year from today.The return on the investment is expected to be 12%.The amount that needs to be invested today is closest to: (FV of $1,PV of $1,FVA of $1,and PVA of $1)(Use the appropriate factor(s)from the tables provided. )

Accepted Answer

A) $44,645. 
B) $36,291. 
C) $28,251. 
D) $50,000. 
A) $44,645. 
B) $36,291. 
C) $28,251. 
D) $50,000.

Question 7

A loan supported by an agreement to transfer ownership of assets if the loan is not repaid is called a:

Accepted Answer

A) Private placement of debt 
B) Publicly traded debt 
C) Secured debt 
D) Capital lease 
A) Private placement of debt 
B) Publicly traded debt 
C) Secured debt 
D) Capital lease

Question 8

Melanie Corp.borrowed $100,000 cash on September 1,2019,and signed a one-year 6%,interest-bearing note payable.The interest and principal are both due on August 31,2020.Assume that the appropriate adjusting entry was made on December 31,2019 and that no adjusting entries have been made during 2020.Which of the following would be the required journal entry to pay the note on August 31,2020?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 9

Rudy Corporation is looking to purchase a building costing $500,000 by paying $100,000 cash on the purchase date,and agreeing to make annual payments for the next ten years.The first payment is due one year after the purchase date.Rudy's incremental borrowing rate is 10%.Each of the annual payments is closest to: (FV of $1,PV of $1,FVA of $1,and PVA of $1)(Use the appropriate factor(s)from the tables provided. )

Accepted Answer

A) $65,098. 
B) $86,821. 
C) $55,098. 
D) $44,000. 
A) $65,098. 
B) $86,821. 
C) $55,098. 
D) $44,000.

Which of the following transactions will decrease the accounts payable turnover ratio?

Young Company is involved in a lawsuit.When would the lawsuit be recorded as a liability on the balance sheet?

Answer the following four questions. A.What is a contingent liability? B.When must a contingent liability be recorded through a journal entry? C.When should a contingent liability be disclosed in the footnotes to the financial statements? D.When is disclosure of a contingent liability not required?

A loan supported by an agreement to transfer ownership of assets if the loan is not repaid is called a:

Financial Statements and Business Decisions

Investing and Financing Decisions and the Accounting System

Operating Decisions and the Accounting System

Adjustments,financial Statements,and the Quality of Earnings

Communicating and Interpreting Accounting Information

Reporting and Interpreting Sales Revenue,receivables,and Cash

Reporting and Interpreting Cost of Goods Sold and Inventory

Reporting and Interpreting Property,plant,and Equipment;intangibles;and Natural Resources

Reporting and Interpreting Bond Securities

Reporting and Interpreting Stockholders Equity

Statement of Cash Flows

Analyzing Financial Statements

Reporting and Interpreting Investments in Other Corporations

Filters

Exam 9: Reporting and Interpreting Liabilities

Which of the following transactions will decrease the accounts payable turnover ratio?

Young Company is involved in a lawsuit.When would the lawsuit be recorded as a liability on the balance sheet?

Answer the following four questions. A.What is a contingent liability? B.When must a contingent liability be recorded through a journal entry? C.When should a contingent liability be disclosed in the footnotes to the financial statements? D.When is disclosure of a contingent liability not required?

A loan supported by an agreement to transfer ownership of assets if the loan is not repaid is called a:

Financial Statements and Business Decisions

Investing and Financing Decisions and the Accounting System

Operating Decisions and the Accounting System

Adjustments,financial Statements,and the Quality of Earnings

Communicating and Interpreting Accounting Information

Reporting and Interpreting Sales Revenue,receivables,and Cash

Reporting and Interpreting Cost of Goods Sold and Inventory

Reporting and Interpreting Property,plant,and Equipment;intangibles;and Natural Resources

Reporting and Interpreting Bond Securities

Reporting and Interpreting Stockholders Equity

Statement of Cash Flows

Analyzing Financial Statements

Reporting and Interpreting Investments in Other Corporations

Filters