1. A retail store increased the Sales Revenue account for the sales price and the amount of sales tax on sales. If the sales tax rate is 5% and the total receipts amounted to $630,000, what is the amount of the sales taxes owed to the taxing agency?

Select one:

a. $30,000

b. $630,000

c. $600,000

d. $31,500

2. Moss County Bank agrees to lend the Sadowski Brick Company $500,000 on January 1. Sadowski Brick Company signs a $500,000, 6%, 9-month note. The adjustment required if Sadowski Brick Company prepares financial statements on June 30 includes a(n)

Select one:

a. Increase to Interest Expense and a decrease to Cash for$15,000

b. Increase to Interest Expense and to Interest Payable for$15,000

c. Decrease to Interest Payable and to Cash for $15,000

d. Decrease to Interest Payable and to Interest Expense for $15,000

3. If bonds are issued at a discount, it means that the

Select one:

a. market interest rate is higher than the contractual interest rate

b. financial strength of the issuer is suspect

c. market interest rate is lower than the contractual interest rate

d. bondholder will receive effectively less interest than the contractual rate of interest

4. If bonds are issued at a premium, the stated interest rate is

Select one:

a. too low to attract investors

b. higher than the market rate of interest

c. adjusted to a higher rate of interest

d. lower than the market rate of interest

5. Bond discount should be amortized to comply with

Select one:

a. the revenue recognition principle

b. conservatism

c. the expense recognition principle

d. the historical cost principle

6. Liabilities are classified as current or long-term based on their

Select one:

a. description

b. payment terms

c. due date

d. amount

7.Treasury shares plus outstanding shares equal

Select one:

a. authorized stock

b. issued stock

c. distributable stock

d. unissued stock

8. Which of the following statements about treasury stock is true?

Select one:

a. Companies acquire treasury stock to increase the number of shares outstanding

b. Purchasing treasury stock is done to eliminate hostile shareholder buyouts

c. Companies acquire treasury stock to decrease earnings per share

d. Few corporations have treasury stock

9. The carrying value of bonds will equal the market price

Select one:

a. at the end of the fiscal period

b. on the date of issuance

c. at the close of every trading day

d. every six months on the date interest is paid

10.The net effects on the corporation of the declaration and payment of a cash dividend are to

Select one:

a. decrease assets and decrease stockholders' equity

b. increase stockholders' equity and decrease liabilities

c. decrease liabilities and decrease stockholders' equity

d. increase assets and increase stockholders' equity