Question 18

2pts

If the market rate is 8% and the contract rate on a bond is 6% then the bond will sell at a premium.

Group of answer choices

False

True

Flag this Question

Question 19

2pts

Short-term obligations that will be paid with current assets within one year should be reported as:

Group of answer choices

Owner's equity.

Long-term liabilities.

Current liabilities.

Current assets.

Flag this Question

Question 20

2pts

A financial measure used to evaluate a company's ability to pay its current liabilities:

Group of answer choices

Current ratio.

Liquidity ratio.

Payment ratio.

Gross profit ratio.

Flag this Question

Question 21

2pts

The current ratio is calculated as:

Group of answer choices

Current assets divided by accounts payable.

Current assets divided by current liabilities.

Cash and accounts receivable divided by current liabilities.

Total assets divided by total liabilities.

Flag this Question

Question 22

2pts

A company has current assets of $23,000 and current liabilities of $16,500. The current ratio is:

Group of answer choices

1.40

0.72

7.2

0.40

Flag this Question

Question 23

2pts

On November 1, Lexi Inc. signed a $10,000, 1-year promissory note at 8% interest. What journal entry should be made on the date of issuance?

Group of answer choices

Debit Cash 10,200; Credit Notes Payable 10,200

Debit Notes Payable 10,000; Credit Cash 10,000

Debit Cash 10,000; Credit Accounts Payable 10,000

Debit Cash 10,000; Credit Notes Payable 10,000

Flag this Question

Question 24

2pts

On November 1, Lexi Inc. signed a $10,000, 2-month promissory note at 8% interest. What is the appropriate journal entry to record the payment of the note?

Group of answer choices

Debit Note payable 10,000and Debit Interest expense 133; Credit Cash 10,133

Debit Interest expense 133; Credit Cash 133

Debit Interest expense 10,133; Credit Note payable 10,133

Debit Cash 133; Credit Interest payable 133

Flag this Question

Question 25

2pts

Madison Company has the following account balances:Cash $1,000; Accounts receivable $17,000; Inventory $8,000; Plant assets $100,000; Land $80,000; Accumulated Depreciation ($50,000); Accounts' payable $12,000; Payroll taxes payable $3,000; Long-term notes payable

$85,000.What are Madison's total current liabilities?

Group of answer choices

$100,000

$12,000

$15,000

$14,000

Flag this Question

Question 26

2pts

Product warranty payable is initially recorded with a:

Group of answer choices

Debit to unearned revenue.

Debit to revenue payable.

Debit to product warranty expense.

Credit to product warranty expense.

Flag this Question

Question 27

2pts

Accrued vacation pay is recorded as:

Group of answer choices

Debit cash; credit vacation pay payable.

Debit vacation pay payable; credit vacation pay expense.

Debit vacation pay expense; credit vacation pay payable.

Debit vacation pay payable; credit cash.

Flag this Question

Question 28

2pts

Warranty costs should be recorded as an expense when:

Group of answer choices

expenses for warranty repairs and replacements are paid.

the sale is recorded.

when the warranty has expired.

when the sale proceeds are received.

Flag this Question

Question 29

2pts

At the time of sale, warranty costs should be:

Group of answer choices

ignored.

recorded when paid.

recorded at 2% of sales.

estimated based on the company's history of product repairs.

Flag this Question

Question 30

2pts

Mason Company sold 1,000 flat screen televisions at a price of $900 each. Mason offers a 3-year warranty on all electronics. Estimated repair expense based on prior year's experience is 2% of sales. What is the appropriate adjusting journal entry that Mason should make to record warranty expense?

Group of answer choices

Debit Warranty expense 6,000; Credit Warranty liability 6,000

Debit Warranty expense 18,000; Credit Cash 18,000

Debit Warranty expense 18,000; Credit Warranty liability 18,000

Debit Warranty expense 6,000; Credit Cash 6,000