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A debit may signify a(n):

• • A. increase in an asset account.

• B. decrease in an asset account

• C. increase in a liability account.

• • D. increase in the stockholders’ equity (common stock) account.

Under allowance method, Bad Debt Expense is recorded

• A. whenever the customer’s account is determined to be worthless

• B. only at the end of the accounting period by an adjusting entry

• • C. when business receives payment from customer

• D. only at the end of the accounting period by a closing entry

If the equipment account has a balance of $22,500 and its accumulated depreciation accounthas a balance of $14,000, the book value of the equipment is:

• • A. $36,500.

• B. $22,500.

• • C. $14,000.

• D. $8,500.

Souris Co. sold merchandise on account to Jolie Co., list price $4,000, trade discount 30%, terms 2/10, n/30. The cost of the goods sold was $1,125. What entry would be recorded by Souris for the sales?

• A. Debit Accounts Receivable $4,000 and Credit Sales $4,000

• B. Debit Accounts Receivable $2,744 and Credit Sales $2,744

• C. Debit Accounts Receivable $2,800 and Credit Sales $2,800

• D. Debit Accounts Receivable $3,920 and Credit Sales $3,920

Common Stock is likely to have

• A. a. debit entries only

• • B. b. credit entries only

• C. c. both debit and credit entries.

• D. d. None of the above

Cash received in advance from customers the for services to be provided in the future is classified as:

• A. prepaid expense

• B. unearned revenue

• C. accrued revenue,

• D. accrued expense:

What are the two common classifications of receivables?

• • A. Accounts Receivable and Notes Receivable

• B. Accounts Receivable and Interest Receivable

• C. Notes Receivable and Tax Receivable

• D. Interest Receivable and Tax Receivable

What is the maturity value of a 60-day, 5% note for $54,000?

• A. $162,000

• B. $2,700

• C. $54,450

• D. $450

In US Accounting, the fixed asset that is not subject to depreciation is

• A. Land

• B. Equipment

• C. Building

• D. Machine

What entry would be recorded by the buyer when issuing a debit memo $600 for the return of defective inventory

• A. Debit Accounts Payable $600 and Credit Inventory $600

• B. Debit Inventory $600 and Credit Accounts Payable $600

• C. Debit Inventory $600 and Credit Accounts Receivable $600

• D. Debit Accounts Payable $600 and Credit Cash $600