A company has a $20,000 bank loan outstanding at December 31st. The loan incurs interest of 6% annually, and interest is paid on September 30 and March 31st each year. What is the amount of interest payable accrued at December 31st?

$600

None of the other answers is correct.

$1,200

$300

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Question 21 pts

Sales and supplier invoices, cheque copies and bank statements can be described as ______________ .

source documents

the general ledger system

None of the other answers is correct.

a company's books of account

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Question 31 pts

'Net sales' on a company's statement of income would reflect ________________________- .

Sales revenue only

Sales revenue - sales discounts - sales returns and allowances

Sales revenue - sales returns and allowances

Sales revenue - sales discounts

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Question 41 pts

At December 31, 2016 a company has $2,250 in a 'Prepaid Insurance' account, representing the value of an insurance policy that is due to expire on March 31, 2018. If the company recognises insurance expense evenly over the term of the policy, what will be the balance in 'Prepaid Insurance' at December 31, 2017?

$ 0

$1,800

Cannot tell from the information provided.

$450

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Question 51 pts

In 2015 a company sells a product to a customer for a cash price of $32. The product had originally been purchased by the company in 2014 for $14. What would appear on the company's 2015 income statement?

Cash of $32 and inventory of $14.

Revenue of $32 and inventory of $14.

Revenue of $32 and cost of goods sold of $14.

Revenue of $18.

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Question 61 pts

A company incurs a total cost of $2 million for rent during 2015. If the company were to include $1.5 million of the rent in cost of goods sold expense (factory rent) and $0.5 million in administrative expense (head office rent), this would be described as presenting rent expense ____________ .

by nature.

by function.

incorrectly (such presentation would not be permitted under generally accepted accounting principles).

by allocation.

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Question 71 pts

Which of the following does NOT have to occur before revenue can be recognised?

The risks and rewards of ownership of the goods have been transferred to the customer.

None of the other answers is correct - all of these events must occur before revenue can be recognised.

The amount of revenue can be reasonably measured.

Collection of payment is judged to be probable.

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Question 81 pts

Why are closing journal entries required?

To calculate net income.

To reduce revenues and expenses to zero, before the start of the next fiscal year.

So that the balances of permanent accounts do not carry forward to the next fiscal year.

All of the other answers are correct.

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Question 91 pts

Which of the following is/are true regarding the Statement of Comprehensive Income?

It always results in a monetary total larger than net income.

All of the other answers are correct.

It is just another name for the Income Statement or Statement of Earnings.

It includes net income.

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Question 101 pts

A company such as Canadian Tire permits customers to return goods for a refund. An excerpt from Canadian Tire's accounting policy for sales returns, used as an example in Ch 4 of the text, explains that Canadian Tire accrues an estimate for sales returns ___________________________ .

equal to the actual cost of returns and recorded at the time the goods are returned.

on the basis of historical returns and recorded at the time the goods are returned.

on the basis of historical returns and recorded in the same period as the original sale.

equal to the actual cost of returns and recorded in the same period as the original sale.