60. When an asset is sold, a gain occurs when the a. sale price exceeds the book value of the asset sold. b. sale price exceeds the original cost of the asset sold. c. book value exceeds the sale price of the asset sold. d. sale price exceeds the depreciable cost of the asset sold. 61. Liabilities are classified on the balance sheet as current or a. deferred. b. unearned. c. long-term. d. accrued. 62. Most companies pay current liabilities a. out of current assets b. by issuing interest-bearing notes payable C. by issuing stock. d. by creating long-term liabilities. 63. The amount of sales tax collected by a retail store when making sales is a. a miscellaneous revenue for the store. b. a curent liability c. not recorded because it is a tax pald by the customer d. recorded as an operating expense. Which of the following most likely would be classified as a current iability? 64. Dividends payable a. Bonds payable in 5 years b. Mortgoge payable as a single payment in 10 years d. As interest is recorded on an interest-bearing note, the Interest Expense account is a. increased: the Notes Payable account is increased. b increased: the Notes Payable account is decreased. c. increased: the Interest Payable account is increased. d. decreased: the Interest Payable occount is increased. 65. Interest expense on an interest-bearing note is a. always equal to zero. b. accrued over the ife of the note. c. only recorded at the time the note is issued. d. only recorded at maturity when the note is paid 66. Two sisters operate a bed and breakfast on the coast of Maine. As customers make reservations they are required to pay cash in advance equal to one-halt ot the rate for their stay. How should the sisters account for the cash received as reservations are made? 67. a. Cash b. Cash c. Unearned Service Revenue d. Cash Unearned Service Revenue Service Revenue Service Revenue Sales Revenue Page 11 of 14