true or false

26. Which of the following accounts is credited by the seller when tax is collected on retail sales?

A) Accounts Payable

B) Payroll Tax

C) Sales Tax Payable

D) Unearned Revenue

27. A $45,000, two-month, 9% note payable was issued on December 1, 2018. What is the amount of interest expense recorded in the year 2019? (Round the final calculation to the nearest dollar.)

A) $4050

B) $338

C) $675

D) $45,675

28. Which of the following accounts will be credited by the borrower when a promissory note is issued?

A) Note Payable

B) Note Receivable

C) Interest Payable

D) Cash

29. If a long-term debt is paid in installments, the business will report the current portion of the note payable as a current liability.

30. The current portion of notes payable is the amount of the principal that is payable more than one year from the balance sheet date.

31. On December 31, 2018, Globe Company borrowed $500,000 by signing a five-year, 8% note payable. The note is payable in five yearly installments of $100,000 plus interest, due at the end of every year beginning on December 31, 2019. Which portion is classified as the long-term portion of Notes Payable at December 31, 2018?

32. A corporation is a business organized under federal law that is a separate legal entity.

33. Which of the following statements regarding corporations is incorrect?

A) Corporations dominate business activity in the United States.

B) Corporations are businesses organized under state law and do not have an existence that is separate from their owners.

C) Most well-known corporations tend to be large multinational businesses.

D) Corporations are separate legal entities.

34. The current portion of notes payable is the principal amount that will be paid within two years of the balance sheet date, and the remaining portion is long term.

35. Double taxation occurs when corporations make dividend payments to stockholders.

36. Higher start-up costs and expensive government regulations are disadvantages of corporations.

37. Which of the following corporate characteristics is a disadvantage of a corporation?

A) Stockholders have limited liability.

B) A corporation has a continuous life.

C) There is no mutual agency between the stockholders and the corporation.

D) Earnings of a corporation may be subject to double taxation.