Houston Co. borrowed $20,000 from Dallas Co. on March 1, 2016. Houston is to repay the principal and interest on March 1, 2017. The interest rate is 8%. If the year-end adjustment is properly recorded, what will be the effects of the accrual on Houston's 2016 financial statements?

a) Increase liabilities and increase expenses b) Increase assets and increase revenues c) Increase assets and increase liabilities d) No effect

What factor distinguishes an employee from an independent contractor?

a) The amount of the pay. b) Whether or not the company supervises and controls the work. c) Whether or not the work is performed on company property. d) Whether the individual chooses to be treated as an independent contractor.

West Company borrowed $60,000 on September 1, 2016 from the Valley Bank. West agreed to pay interest annually at the rate of 6% per year. The note issued by West carried an 18-month term. Based on this information the amount of interest expense appearing on West's 2016 income statement would be: a) $0. b) $1,200. c) $360. d) $900.

Greer Company pays Jamal Perry a salary of $2,800 per week. How much FICA tax must Greer pay on Jamal's behalf, including both the employee and employer portions? a) $210. b) $420. c) $0.00. d) $336.