Question : 71. In December, 2014, Quebecor Printing received magazine subscriptions for : 1256007

 

 

71. In December, 2014, Quebecor Printing received magazine subscriptions for 2015 from a customer, who paid $500 in cash. What would be the appropriate journal entry for this event?

a.

Debit Cash, $500; credit Subscription Revenue, $500.

b.

Debit Cash, $500; credit Unearned Revenue, $500.

c.

Debit Subscription Revenue, $200; credit Cash, $200.

d.

No journal entry is necessary.

 

 

 

72. At times, businesses require advance payments from customers that will be applied to the purchase price when goods are delivered or services provided. These customer advances represent:

a.Liabilities until the product or service is provided.

b.A component of stockholders’ equity.

c.Long-term assets until the product or service is provided.

dRevenue upon receipt of the advance payment.

 

 

73. The sale of gift cards by a company is a direct example of:

a.Unearned revenues.

b.Sales tax payable.

c.Current portion of long-term debt.

dContingencies.

 

 

74. When a company delivers a product or service for which a customer has previously paid, the company records the following:

a.A debit to a revenue account and a credit to a liability account.

b.A debit to a revenue account and a credit to an asset account.

c.A debit to an asset account and a credit to a revenue account.

d.A debit to a liability account and a credit to a revenue account.

 

 

75. Sales taxes collected by a company on behalf of the state and local government are recorded by:

a.A debit to an expense account.

b.A credit to a revenue account.

c.A debit to a revenue account. 

d.A credit to a liability account. 

 

 

76. When a company collects sales tax from a customer, the event is recorded by:

a.A debit to Sales Tax Expense and a credit to Sales Tax Payable.

b.A debit to Cash and a credit to Sales Tax Payable. 

c.A debit to Sales Tax Payable and a credit to Sales Tax Expense. 

d.A debit to Sales Tax Payable and a credit to Cash. 

 

 

77. Suppose you buy lunch for $8.39 that includes a 5% sales tax. How much did the restaurant charge you for the lunch (excluding any tax) and how much do they owe for sales tax?

a.$8.39 for lunch and $0.42 for sales tax.

b.$8.39 for lunch and no sales tax. 

c.$8.81 for lunch and $0.42 for sales tax. 

d.$7.99 for lunch and $0.40 for sales tax. 

 

 

78. Suppose you buy dinner for $23.75 that includes an 8% sales tax. How much did the restaurant charge you for the dinner (excluding any tax) and how much do they owe for sales tax?

a.$23.75 for dinner and $1.90 for sales tax.

b.$23.75 for dinner and no sales tax. 

c.$21.85 for dinner and $1.90 for sales tax. 

d.$21.99 for dinner and $1.76 for sales tax. 

 

 

79. Union Apparel has sales including sales taxes for the month of $551,200. If the sales tax rate is 6%, what are Union Apparel’s sales for the month?

a.$500,000.

b.$518,128.

c.$520,000.

d.$551,200.

 

 

80. The current portion of long-term debt should be

a.Reported as a current liability on the balance sheet.

b.Reported as a long-term liability on the balance sheet.

c.Combined with the rest of the long-term debt on the balance sheet.

d.Paid immediately.