Which of the following happens as a result of selling $130 of merchandise to a customer for $200 cash in a state where the sales tax rate is 4%?

a.All of these answer choices are correct.

b.Total assets increase by $78.

c.Stockholders equity increases by $70

d. The cash flow from operating activitiesincreases by $208.

19)Which of the following is a true statement about a company that uses the allowance method?

a.The net realizable value of its accounts receivable is shown on the balance sheet.

bUncollectible Accounts Expense is recorded when a receivable is written off

c.Uncollectible accounts are not recorded until the amount becomes significant.

d. None of these answer choices are correct.

22) Which of the following best describes the percent of receivables method?

a. Credit sales approach

b. Income statement approach

c. Direct write-off approach

d. Balance sheet approach

23) A company uses the effective interest method to amortize a bond discount. Which of the following statements is true regarding the interest expense that is recognized each year?

a. It will be greater than the interest payment and it will also increase from year to year.

b.It will remain the same from year to year.

c.It will increase from year to year.

d It will be greater than the interest payment.

24) How will an impairment loss of $15,000 relating to goodwill affect the elements of the financial statements?

a.Retained earnings decreases

b.All of these answer choices are correct.

c. Goodwill decreases

d. Impairment loss increases

30) Which of the following would not be presented in the financing section of the statement of cash flows?

a.Repayment of long-term bonds payable

b.Purchased treasury stock

c.Purchased a new office building by issuing a note payable

d. Issuing of preferred stock

37) Which of the following is a cost of extending credit to customers?

a.Fees paid to credit card companies

b.Lost sales

c.Explicit interest

d. Uncollectible accounts expense

38) Which of the following is (are) the term(s) used to describe the person responsible for making payment on the due date of a promissory note

a.Borrower or maker or debtor

b.Borrower

c.Lender or maker

d. Maker or debtor

51) Which of the following transactions would be disclosed on a schedule of noncash investing and financing activities?

a.The issuance of bonds for cash

b.Recording depreciation expense

c.A building acquired by issuing mortgage note

d.All of these answer choices are correct

55) What does the accounts receivable turnover ratio measure?

a.Average balance of accounts receivables

b.How quickly inventory turns into accounts receivable

c. How quickly the accounts receivable balance increases

d.How quickly accounts receivable turn into cash