A company makes a cash sale to a customer for an item with a selling price of $100, and also collects a $5 (5%) sales tax from the customer. The company will record revenue as:

$100

None of the other answers is correct.

$95

$105

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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

a company's books of account

None of the other answers is correct.

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Question 31 pts

Which of the following could be included in a closing journal entry?

A debit to Wages expense

A debit to Sales Revenue

A credit to Accumulated Depreciation

A debit to Inventory

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Question 41 pts

Which of the following best describes the preferred approach to revenue recognition for a company providing services on a long-term project?

The revenue is recognised over time equal to the payment received.

The revenue is recognised at one time but only after the project is completed.

The revenue is recognised over time as the project progresses.

The revenue is recognised over time but only after the project is completed.

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Question 51 pts

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

Sales revenue - sales discounts

Sales revenue - sales returns and allowances

Sales revenue - sales discounts - sales returns and allowances

Sales revenue only

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Question 61 pts

Why are closing journal entries required?

To calculate net income.

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

All of the other answers are correct.

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

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Question 71 pts

A company sells goods to customers for cash. This transaction affects the statement of cash flows through the ___________________ section.

investing

None of the other answers is correct - this transaction does not affect the cash flow statement.

financing

operating

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Question 81 pts

A company purchases equipment on April 1st, 2016 for $25,000. The equipment is estimated to have a residual (salvage) value of $3,000, and an estimated life of 8 years. The company has a December 31st fiscal year-end, and uses the straight-line method for recording depreciation. What is the company's accumulated depreciation for this equipment at December 31st, 2017.

$2,750

$2,062.50

$4,812.50

None of the other answers is correct.

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Question 91 pts

When revenue is recognised, an income statement account is credited. Which account(s) could be debited in this situation?

Cash

Accounts receivable

All of the other answers are correct.

Customer deposit (liability)

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Question 101 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 $18.

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