A company has a three month, $6,000 bank loan payable, signed on January 01 at an interest rate of 4% per year. Interest is due at maturity. What adjusting entry should the company make at the end of January if it prepares adjusting entries monthly? O a. Interest expense 60 Interest Payable 60 b. Interest expense 20 Interest Payable 20 O c. Interest expense 20 Cash 20 O d. Interest Receivable 20 Interest Revenue 20 ABC Company sold $1000 worth of merchandise on April 20 to DEF Company. The terms were 2/10, n/30. On April 25 DEF Company returned $300 worth of merchandise. On April 29 ABC Company receives payment in full from DEF Company for the balance due. What amount will be credited to the Accounts Receivable account when the collection of this account is recorded on April 29? O a a. $1000 O b. $700 O c. $680 O d. $686 Which of the following situations would be the most likely indicator Profitability? O a. Increasing return on assets, asset turnover, and profit margin ratios. O b. Increasing price earnings ratio and decreasing earnings per share. o O c. Decreasing return on common shareholder's equity and increasing asset turnover. O d. Decreasing gross profit margin and increasing profit margins. A company gave a price quote to a client for services in February, performed the services in March, sent the client an invoice in April and got paid in May. In which month should the revenue be recognized? O a February O b. May Oc. April O d. March ABC Company purchased a truck for $32,000 on July 1, 2015. The truck has an estimated residual value of $2,000, An estimated life expectancy of 5 years, and it is estimated that the truck will travel 300,000 km. If 50,000 km are driven in 2015, what amount of depreciation expense would ABC Company record at Dec. 31, 2015, assuming the company uses the units of production method? O a $5,000 O . ob. O b. $3,000 O c. $2,500 O c O d. $5,333 ABC Company has $4,515 of pre tax sales. If the company collects 13% HST with each sale, what is the amount to be credited to the sales account? O a. $4,515 O b. $587 O c. $3,996 O O d. $5,102 The cost basis of accounting states that: O a. The benefits should exceed the cost of providing information O b. Assets should be reported at their historical cost . Assets should be reported at their fair value O d. Cost is more relevant than fair value Given Net sales are $500,000, cost of goods sold is $325,000, selling expenses are $10,000, Administrative expenses are $40,000, other revenues are $15,000, and income tax expense is $8,000. What is the gross profit? O a. $140,000 a O b. $125,000 O c. $132,000 O d. $175,000 A trial balance: O a. Proves that all transactions have been recorded O b. Proves that transactions have been correctly journalized . Is a list of accounts with their balances at a specific time O d. Will not balance if a correct journal entry is posted twice The unadjusted trial balance shows supplies of $1,200 and supplies expense of $0. If there are $500 of supplies on hand at the end of the period, the adjusting entry would be: . Supplies $500 Supplies expense $500 O b. Supplies expense $700 Supplies $700 O c. Supplies $700 Supplies expense $700 O d. Supplies expense $500 Supplies $500