Question :
11) A company signs a note payable for $3,500 at : 1232350
11) 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
12) L & L Construction had sales on account of $28,500 which were subject to state sales tax of 9%. The entry to record the sales would be to:
A) debit Accounts receivable, $28,500; credit Sales revenue, $28,500.
B) debit Accounts receivable, $31,065; credit Sale revenue, $31,065.
C) debit Accounts receivable, $28,500; debit Sales tax payable, $2,565; credit Sales revenue, $31,065.
D) debit Accounts receivable, $31,065; credit Sales revenue, $28,500; credit Sales tax payable, $2,565.
13) Bulldog Fence had sales on account of $7,200 which were subject to state sales tax of 7%. The entry to record the sales would be to:
A) debit Accounts receivable, $7,704; credit Sales revenue, $7,200; credit Sales tax payable, $504.
B) debit Accounts receivable, $7,704; credit Sale revenue, $7,704.
C) debit Accounts receivable, $7,200; credit Sales revenue, $7,200.
D) debit Accounts receivable, $7,200; debit Sales tax payable, $504; credit Sales revenue, $7,704.
14) Budget Auto signed a $45,000 8% 30-year installment note on November 1, 2012. The note requires semiannual payments of $750 plus interest on May 1 and November 1 of each year. How will Budget Auto classify this loan on its December 31, 2012 Balance Sheet?
A) Current Portion of Long-term debt, $0; Long-term debt, $45,000
B) Current Portion of Long-term debt, $45,000; Long-term debt, $0
C) Current Portion of Long-term debt, $750; Long-term debt, $44,250
D) Current Portion of Long-term debt, $1,500; Long-term debt, $43,500
15) Sunrise, Inc. signed a $30,000 10% 15-year installment note on December 1, 2012. The note requires quarterly payments of $500 plus interest on March 1, June 1, September 1, and December 1 of each year. How will Budget Auto classify this loan on its December 31, 2012 Balance Sheet?
A) Current Portion of Long-term debt, $1,000; Long-term debt, $29,000
B) Current Portion of Long-term debt, $2,000; Long-term debt, $28,000
C) Current Portion of Long-term debt, $500; Long-term debt, $29,500
D) Current Portion of Long-term debt, $1,500; Long-term debt, $28,500
16) If a liability is not properly classified, it will have an effect on the:
A) debt ratio.
B) current ratio.
C) both the debt and current ratio.
D) total dollar amount of liabilities.
17) For a liability to exist,:
A) a past transaction or event must have occurred.
B) the exact amount must be known.
C) the identity of the party must be known.
D) an obligation to pay cash in the future must exist.
18) Which of the following would NOT be a liability?
A) The signing of a three-year employment contract at a fixed annual salary
B) An obligation to provide goods or services in the future
C) A note payable with no specified maturity date
D) An obligation that is estimated in amount
