Regarding gross and net pay, which of the following statements is correct?
A) Gross pay minus all deductions such as income tax withheld equals net pay.
B) Net pay represents the total salaries and wages expense to the employer.
C) For most businesses, gross pay equals net pay.
D) Employers are required to deposit net pay into the employee’s bank account.
Maize Corporation pays $532,000 for 100,000 shares to acquire 45% common stock of
Teal Investments, Inc. on January 5, 2017. Maize Corporation sells 20,000 shares for
$40,000 on January 6, 2017. Which of the following is the correct journal entry for the
transaction on January 6, 2017? (Round any intermediate calculations to two decimal
places, and your final answer to the nearest dollar.)A)
B)
C)
D)
The following is a summary of information presented on the financial statements of a
company on December 31, 2017.
With respect to long-term liabilities, a horizontal analysis reveals ________.
A) long-term liabilities decreased by $15,000
B) long-term liabilities decreased by 25.00%
C) long-term liabilities decreased by 11.11%
D) long-term liabilities decreased by $8,000
Which of the following statements is incorrect?
A) The life cycle of a plant asset includes: acquisition, usage, and disposal.
B) Depreciation is recorded on all plant assets.
C) Plant assets not currently being used in business operations are classified as
long-term investments.
D) Plant assets are long-lived tangible assets used in the operations of a business.
A business makes a cash payment of $12,000 to a creditor. Which of the following
accounts is credited?
A) Cash
B) Accounts Payable
C) Bank
D) Accounts Receivable
Refer to the following trial balance.
How much is the net sales revenue?
A) $463,000
B) $479,000
C) $145,000
D) $141,000
At the beginning of 2017, Delicious Drinks, Inc. has the following account
balances:Accounts Receivable $44,000 (debit balance)
Allowance for Bad Debts $6,000 (credit balance)
Bad Debts Expense $0During the year, credit sales amounted to $800,000. Cash
collected on credit sales amounted to $760,000, and $18,000 has been written off. At
the end of the year, the company adjusted for bad debts expense using the
percent-of-sales method and applied a rate, based on past history, of 3.5%. The ending
balance of Accounts Receivable is ________.
A) $44,000
B) $66,000
C) $56,140
D) $18,000
Message Company uses the indirect method to prepare its statement of cash flows.
Refer to the following portion of the comparative balance sheet:Message Company
Comparative Balance Sheet
December 31, 2017 and 2016
Note:
1. There was no retirement of stock during the year.
2. There were no sales of treasury stock during the year.Which of the following
statements is correct?
A) There was zero net cash flow from transactions involving Common Stock.
B) There was a negative cash flow of $5,600 from the issuance of Common Stock.
C) There was a positive cash flow of $5,600 from the issuance of Common Stock.
D) There was positive cash flow of $18,000 from issuance of Common Stock.
A company has four vendors and the accounts payable subsidiary ledger shows the
following balances.
Calculate the accounts payable balance in the general ledger.
A) $436,295
B) $564,425
C) $278,821
D) $285,604
Which of the following is the first step in the purchasing and payment process?
A) The purchaser receives an invoice for the goods shipped by the supplier.
B) The purchaser sends a check to the supplier.
C) The purchaser sends a purchase order to the supplier.
D) The purchase receives the inventory and prepares a receiving report.
Which of the following is the correct formula to calculate the debt ratio?
A) Debt ratio = Total liabilities x Total assets
B) Debt ratio = Total liabilities + Total assets
C) Debt ratio = Total liabilities – Total assets
D) Debt ratio = Total liabilities / Total assets
Which of the following is true of good internal controls over payroll?
A) Accounting for payroll should be separate from hiring and firing of employees.
B) Disbursement of paychecks should not be separate from the function of maintaining
payroll records.
C) Hiring and firing employees should not be separated from accounting and from
disbursing paychecks.
D) Cash receipts from customers should be separated from the accounting for accounts
receivable.
When a company is using the direct write-off method, and an account is written off, the
journal entry consists of a ________.
A) debit to Accounts Receivable and a credit to Cash
B) credit to Accounts Receivable and a debit to Bad Debts Expense
C) debit to the Allowance for Bad Debts and a credit to Accounts Receivable
D) credit to Accounts Receivable and a debit to Interest Expense
Barter, Inc. sold goods for $883,500 on account. The company operates in a state that
imposes a 9% sales tax. What is the amount of the sales tax payable to the state?
A) $79,515
B) $39,758
C) $19,879
D) $159,030