MCQs No need for explanation

1) The interest charged on a $110,000 note payable, at the rate of 7%, on a 90-day note would be *

$1,925

$4,444

$1,890

None of the above

2) The interest charged on a $50,000 note payable, at the rate of 6%, on a 3-month note would be *

$1,500

$750

$500

None of the above

3) The maturity date of a 8-month note borrowed on February 10, 2020 is: *

August 10, 2020

September 10, 2019

October 10, 2019

None of the above

4) The maturity date of a 75-day note borrowed on March 15, 2020 is: *

May 28, 2020

May 29, 2020

May 30, 2020

None of the above

5) A cash register tape shows cash sales of $1,500 including sales taxes of $120. The journal entry to record this information is *

Debit cash and credit sales of $1,620

Debit cash of $1,620 and credit sales tax payable $120 and sales $1,500

Debit cash of $1,620 and credit sales tax expense $120 and sales $1,500

None of the above .

5)

Linda's Boutique has total receipts for the month of $29,295 including sales taxes. If the sales tax rate is 5%, what are Linda's cash received for the month? *

$27,831

$27,900

$29,295

None of the above

6) A company receives $174, of which $14 is for sales tax. The journal entry to record the sale would include a *

Debit to Sales Tax Expense for $14

Debit to Sales for $174

Debit to Cash for $174

None of the above

7) Sales taxes remitted to the government are recorded by *

Debiting Sales Taxes Expense

Crediting Sales Taxes Payable

Debiting Sales Taxes Payable

None of the above

8) ARE Company sells 3,000 units of its product for $500 each. The selling price includes a one year warranty on parts. It is expected that 3% of the units will be defective and that repair costs will average $150 per unit. In the year of sale, warranty contracts are honored on 40 units. What amount should ARE Company accrue on December 31 for estimated warranty costs? *

$3,000

$2,000

$1,000

None of the above