1) Issuing a note payable is a(n)

A) asset source transaction.

B) asset exchange transaction.

C) asset use transaction.

D) claims exchange transaction.

2)Riley Company borrowed $36,000 on April 1, 2016 from the Titan Bank. The note issued by Riley carried a one-year term and a 7% annual interest rate. Riley earned cash

revenue of $1,700 in 2016 and $1,400 in 2017. Assume no other transactions.

The amount of net income on the 2017 income statement would be:

A) $630.

B) $1,890.

C) $770.

D) ($190).

3) Which of the following represents the correct journal entry to record a taxable cash sale of $400 if the sales tax rate is 5%?

A) A debit to cash for $420, a credit to sales tax payable for $20, and a credit to sales revenue for $400.

B) A debit to cash for $420, a debit to sales tax expense for $20, and a credit to sales

revenue for $400.

C) A debit to cash for $400, a credit to sales tax payable for $20, and a credit to sales revenue for $380.

D) None of these answer choices is correct.

4) Under what condition should a pending lawsuit be recognized as a liability on a company's balance sheet?

A) The outcome is reasonably possible.

B) The outcome is probable and can be reasonably estimated.

C) The outcome is probable.

D) The amount can be reasonably estimated.

5) When do the effects of product warranties appear on the statement of cash flows?

A) When the warranty obligation is recognized.

B) When there is a settlement of a warranty claim made by a customer.

C) When the sale of merchandise is made.

D) None of these answer choices is correct.

6) Greer Company pays Jamal Perry a salary of $3,000 per week. How much FICA tax must Greer pay on Jamal's behalf, including both the employee and employer portions?

A) $0.00 Jamal is responsible for making his own payments.

B) $450.

C) $360.

D) $225.

7)What factor distinguishes an employee from an independent contractor?

A) Whether or not the company supervises and controls the work.

B) The amount of the pay.

C) Whether or not the work is performed on company property.

D) Whether the individual chooses to be treated as an independent contractor.

8)Which of the following is not an item deducted from salary expense to arrive at net pay?

A) Federal unemployment tax.

B) FICA tax for Social Security.

C) FICA tax for Medicare.

D) These answer choices are all deducted from salary expense to arrive at net pay.

9) Hartford Company borrowed $20,000 on October 1, 2016. Hartford issued a one year 6% discount note payable. The adjusting entry necessary to record accrued interest on December 31, 2016 would include a:

A) debit to Interest Expense for $300.

B) debit to Discount on Notes Payable of $300.

C) credit to Interest Payable for $300.

D) none of these answer choices is correct.

10)

The following information is taken from the balance sheet of Atlanta Company:

Current assets $ 960

Current liabilities $ 600

Property, Plant & Equip 1,450

Noncurrent liabilities 770

Total assets $ 2,410

Total liabilities $ 1,370

Atlanta Company's current ratio is:

A) .66 to 1

B) 1.76 to 1

C) 2.5 to 1

D) 1.6 to 1