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ACC111: Financial Accounting II Chapter 8 Quiz Name Nathan Huerta Circle the letter of the best response. 1 . Ridgepointe Corporation made sales of $300,000 subject to warranties that are estimated to be at 4% of the sales made. The entry to accrue warranty expense would include which of these? A. Credit to Inventory, $12,000 B. Debit to Warranty Payable, $12,000 C. Credit to Warranty Expense, $12,000 D. Credit to Accrued Warranties Payable, $12,000 2. Refer to Question #1. Defects totaled $8,000. Ridgepointe's entry to replace the defective products will include which of these? A. Credit to Accrued Warranties Payable. B. Credit to Inventory. C. Debit to Warranty Expense. D. Debit to Inventory. 3. Which of the following is not a current liability? A. Accounts Payable B. Notes Payable due in 90 days C. Bonds Payable D. Accrued Payroll Liabilities 4 . Fowler Inc. reports purchases from suppliers of $130,000 and average accounts payable of $50,000. What is the days' payable outstanding for Fowler Inc.? A. 140 days B. 3 days C. 7 days D. 50 days 5 . On November 1, Coker Company received $6,000 from a customer for legal services to be performed over the next three months. On December 31, after all adjusting entries are made, the balance sheet should report what amount of unearned revenue? A. $6,000 B. $2,000 C. $4,000 D. $- 0 -ACC111: Financial Accounting II Chapter 8 Quiz Name 6. A contingent liability should be reported on the balance sheet if: A. it is less than possible but more than remote that a loss will occur. B. it is the result of a lawsuit that is not yet settled. C. it is probable that the loss will occur and the amount can be reasonably estimated. D. Contingent liabilities will never be reported on the balance sheet. 7. Bell Corporation purchases inventory on February 1, 2019 for $80,000 in exchange for a includes a: short-term note payable, due in one year, with interest at 8%. The entry on February 1, 2019 A. debit to Inventory, $80,000. B. credit to Interest Payable, $6,400. C. credit to Notes Payable, Short-term, $80,000. D. Both A and C. 8. Refer to Question #7. On December 31, 2019, the corporation's year end, the amount of accrued interest payable will be: A. $6,400 B. $5,867 C. $533 D. There is no interest accrued until the due date. 9 Refer to Question #7 and #8. On February 1, 2020, the amount of interest expense at maturity will be: A. $6,400 B. $5,867 C. $533 D. There will not be any interest expense recorded at maturity. 10 . From the following list, calculate total current liabilities (amounts in millions): Accumulated depreciation $ 28 Sales tax payable Accrued warranties payable 2 Bonds payable 35 Current portion of long-term debt 10 Long-term debt 100 Accounts receivable 15 Accounts payable 13 Interest payable 3 Interest expense 14 Unearned revenue 6 Accrued liabilities payable UIC A. $123 B. $238 C. $95 D. $46 Page 2 of 2
