Ferg Acctg Bellringer 31 Financial

Which of the following is a benefit of capitalizing a purchase?

• It can make a company look more profitable.

• It can result in an increase in sales.

• It can make a company more attractive to potential buyers.

• It can make a company look less profitable.

How should Post-It notes, which are quickly used up, be treated in accounting?

• They should be expensed.

• They should be referred to as assets.

• They should be capitalized.

• They should be excluded from the statements.

Delineating a purchase as an asset of the company is referred to as _____.

• capitalizing

• taxing

• returning

• expensing

Robert received his payslip for the month of May 2017 and the following are mentioned:

Salary: $2500

Production Bonus: $100

Sick days: $150

Income tax: $500

Which of the following is NOT a type of compensation

• Income tax

• Bonuses

• Sick days

• Salary

The salaries or wages of _____ employees are often grouped under overhead expenses for a business.

• indirect

• direct

• long-term

• short-term

How is an indirect employee different from a direct employee?

• A direct employee can touch the product while an indirect employee does not actually touch the end product.

• A direct employee will receive 5% bonus while an indirect employee receives only 2% bonus.

• A direct employee deals directly with the boss of a company while an indirect employee cannot deal with the boss.

• A direct employee receives compensation while an indirect employee does not receive compensation

Bob owns a bicycle shop. In 2016, Bob sold 75 bicycles. 30 of the bicycles were sold for $150, while 45 of the bicycles were sold for $300. All of the bicycles were subject to 7.5% sales tax. What are Bob's revenue and liabilities for 2016?

• $18,000 in revenue. $1,350 in liabilities.

• $19,350 in revenue. $0 in liabilities.

• $19,000 in revenue. $350 in liabilities.

• $17,500 in revenue. $1,850 in liabilities.

If a company's net sales are $750,000 and its cost of sales is $270,000, what is the company's gross income?

• $480,000

• $500,000

• $1,020,000

• $750,000

A tax refund for a company is a _____ contingency.

• gain

• improved cost

• liability

• cost benefit

Rachel works for an electronics company. She purchases a device for testing the electronics. What should be done with this purchase?

• It should be capitalized.

• It should be expensed.

• It can be capitalized or expensed.

• It should be carried over.