Question : Multiple Choice Questions 29.How does the going concern assumption affect accounting : 1254542

 

Multiple Choice Questions 

29.How does the going concern assumption affect accounting for notes payable?   

A. It dictates that interest expense be accrued at the end of the accounting period.

B. It dictates that notes payable be reported at their face value.

C. It dictates that notes payable be reported at their net realizable value.

D. It dictates that interest expense be paid when the note matures.

30.Receivables are normally reported on the balance sheet at net realizable value. In contrast, payables are carried at face value. Which accounting principle requires this treatment of payables?   

A. Materiality concept.

B. Going concern assumption.

C. Monetary unit assumption.

D. Matching concept.

31.The party who borrows money in a note payable is known as the   

A. Maker.

B. Issuer.

C. Payee.

D. Both A and B.

32.Hamm Co. borrowed $10,000 from Townsend Co. on March 1, 2013. Hamm is to repay the principal and interest on March 1, 2014. The interest rate is 8%. If the year-end adjustment is properly recorded, what will be the effects of the accrual on Hamm’s 2013 financial statements?   

A. Increase assets and increase liabilities

B. Increase assets and increase revenues

C. Increase liabilities and increase expenses

D. No effect

33.Fallon Company issued a $20,000 note to the Capital Bank on August 1, 2013. The note carried a one-year term and a 12% rate of interest. The adjusting entry on Fallon’s books to record accrued interest expense on December 31, 2013 will   

A. Decrease assets and decrease retained earnings by $1,000.

B. Increase liabilities and decrease equity by $800.

C. Increase liabilities and decrease equity by $1,000.

D. Decrease equity and increase liabilities by $2,400.

34.Warren Company borrowed $20,000 on September 1, 2013 from the National Bank. Warren agreed to pay interest annually at the rate of 6% per year. The note issued by Warren carried an 18-month term. Based on this information the amount of interest expense appearing on Warren’s 2013 income statement would be   

A. $-0-.

B. $400.

C. $120.

D. $300.

Munson Company issued an interest-bearing note payable with a face amount of $6,000 and a stated interest rate of 8% to the Capital Bank on August 1, 2013. The note carried a one-year term.

 

35.The amount of cash flow from operating activities on the 2013 statement of cash flows would be:   

A. $480.

B. $200.

C. $6,000.

D. zero.

36.Based on this information alone, the amount of total liabilities appearing on Munson’s 2013 balance sheet would be:   

A. $6,180

B. $6,200

C. $6,480

D. $6,000

 

Ramon Company borrowed $18,000 on April 1, 2013 from the Lone Star Bank. The note issued by Ramon carried a one year term and a 7% annual interest rate. Ramon earned cash revenue of $850 in 2013 and $700 in 2014. Assume no other transactions.

 

37.The amount of net income on the 2014 income statement would be:   

A. $315.

 

B. $385.

C. $(95).

D. $945.

 

 

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more