ACCT 101

1). On July 31, 2020, Able Co. has a $500,000 15-year mortgage outstanding. Over the next year the company will make 12 monthly payments of $5,000 representing $33,500 of interest and $26,500 of principal repayment. Which of the following best represents how the mortgage will be reported on the July 31, 2020 statement of financial position?

Current Liabilities Non-Current Liabilities

a) $26,500 $473,500

b) $26,500 $440,000

c) $60,000 $440,000

d) $60,000 $473,500

2). Typically acquisition costs for inventory can be financed through the use of

a) overdraft protection.

b) accounts payable.

c) working capital.

d) notes payable.

3). Which of the following companies would be most likely to have an unearned revenue account?

a) grocery store

b) department store

c) hotel chain

d) car dealership

4). Lokus Lofts is a rental company that requires its tenants to pay rent one month in advance. Lokus should record the cash received as

a) Prepaid Rent.

b) Rent Revenue.

c) Unearned Revenue.

d) Accounts Payable.

5). When the board declares dividends, the correct journal will be

a) Dividends Expense

Dividends Payable

b) Dividend Declared

Cash

c) Dividends Declared

Dividends Payable

d) Dividends Receivable

Dividends Revenue

6). The accounts payable turnover ratio measures

a) number of times the company settles its trade payable.

b) average accounts payable balance.

c) the average number of times the industry settles their trade payable.

d) the average balance of accounts payable to current assets.