Worksheet Questions Extraction

On November 1, Noah Company signed a 120-day, 6% note payable, with a face value of $19,000. What is the adjusting entry for the accrued interest at December 31 on the note?

On September 1, Deck Company signed a $50,000, 90-day, 8% note payable. What is the journal entry that should be recorded by Deck upon maturity of the note?

On December 1, Jane signed a $25,000, 60-day, 4% note payable as replacement of an account payable. What is the journal entry that should be recorded upon signing the note?

Amounts received in advance from customers for future products or services:

• Are revenues.

• Increase income.

• Are Unearned revenues.

• Are not allowed under GAAP.

• Require an outlay of cash in the future.

• Withdraw cash from the business by owner or paid cash for an expense

• Withdraw cash from the business by owner

• paid cash for an expense

• Collected cash from customers

• None of these

The buyer is responsible for the cost of shipping when goods are sold with the terms FOB:

• Shipping board

• Shipping point

• Destination

• On board

• None of these

A corporation’s minimum legal capital is established by recording the par or stated value of the number of shares:

• Issued.

• Authorized.

• Subscribed.

• Outstanding.

• In treasury.

Items used in business operations, such as office pens and paper are several samples of:

• Office expense

• Office supplies

• Office equipment

• Prepayment

• None of these

All of the following statements regarding uncertainty in liabilities are true except:

• Liabilities can involve uncertainty in whom to pay.

• A company can create a liability with a known amount even when the holder of the note may not be known until the maturity date.

• A company can have an obligation of a known amount to a known creditor but not know when it must be paid.

• A company only records liabilities when it knows whom to pay, when to pay, and how much to pay.

• A company can be aware of an obligation but not know how much will be required to settle it.

When applying the lower of cost or market (LCM) rule, which of the following is considered the "market" value?

• Replacement cost

• Sales price

• Cost of production

• Original purchase price

• Future sales value