A company has 100 of credit card sales with a 2 fee and its

A company has $100 of credit card sales with a 2% fee, and its $98 cash is received immediately on deposit. What journal entry does a company make to record the credit card sale if cash is received immediately on deposit?

Debits Accounts Receivable $98, debits Credit Card Expense $2, and credits Sales $100

Debits Cash $98 and credits Accounts Receivable $98

Debits Cash $98, debits Credit Card Expense $2, and credits Sales $100

Debits Cash $100 and credits Sales $100

4.5 points

Question 2

What two methods do companies use to account for uncollectible accounts receivable (bad debts)?

Allowance and direct write-off

Cost and equity

Periodic and perpetual

Gross profit and retail

4.5 points

Question 3

What type of account is Allowance for Doubtful Accounts and what is its normal balance?

Asset with debit balance

Contra asset with credit balance

Expense with debit balance

Revenue with credit balance

4.5 points

Question 4

What journal entry does a company make to write off a customer\'s uncollectible account under the direct write-off method?

Debits Allowance for Doubtful Accounts and credits Accounts Receivable

Debits Allowance for Doubtful Accounts and credits Bad Debts Expense

Debits Bad Debts Expense and credits Accounts Receivable

Debits Bad Debts Expense and credits Allowance for Doubtful Accounts

4.5 points

Question 5

What adjusting entry does a company make to record estimated bad debts under the allowance method?

Debits Allowance for Doubtful Accounts and credits Accounts Receivable

Debits Allowance for Doubtful Accounts and credits Bad Debts Expense

Debits Bad Debts Expense and credits Accounts Receivable

Debits Bad Debts Expense and credits Allowance for Doubtful Accounts

4.5 points

Question 6

What journal entry does a company make to write off a customer\'s uncollectible account under the allowance method?

Debits Allowance for Doubtful Accounts and credits Accounts Receivable

Debits Allowance for Doubtful Accounts and credits Bad Debts Expense

Debits Bad Debts Expense and credits Accounts Receivable

Debits Bad Debts Expense and credits Allowance for Doubtful Accounts

4.5 points

Question 7

Allowance for Doubtful Accounts has a $700 debit balance before adjustment at year-end. Net sales are $200,000, and bad debts expense is estimated at 1% of net sales. Using percent of sales method, compute estimated bad debts amount to be used in year-end adjusting entry.

$700

$1,300

$2,000

$2,700

4.5 points

Question 8

Allowance for Doubtful Accounts has a credit balance of $1,100 before adjustment at year-end. An aging analysis of accounts receivables indicates uncollectible accounts of $12,900. Using aging of receivables method, compute estimated bad debts amount to be used in year-end adjusting entry.

$1,100

$11,800

$12,900

$14,000

4.5 points

Question 9

A company receives a $10,000, 12%, 60-day note, dated June 15, from a customer to apply on account. Compute the maturity value of the note. (Use a 360-day year.)

$ 9,800

$10,000

$10,200

$11,200

4.5 points

Question 10

What journal entry does a company make to record the collection of an interest-bearing note received and collected in the same accounting period?

Debits Cash, credits Notes Payable, and credits Interest Expense

Debits Cash, credits Notes Receivable, and credits Interest Revenue

Debits Notes Payable, debits Interest Expense, and credits Cash

Debits Notes Receivable, debits Interest Revenue, and credits Cash

4.5 points

Question 11

Which of the following is a characteristic of plant assets? They

Are also called intangible assets

Are held for sale and not used in operations

Are tangible assets used in operations

Have a useful life of less than one year

4.5 points

Question 12

Equipment with a cost of $65,000 has an estimated salvage value of $5,000 and an estimated life of 5 years or 15,000 hours. What is the amount of depreciation for the first full year, assuming the company uses the straight-line method?

$8,000

$12,000

$24,000

$26,000

4.5 points

Question 13

$8,000

$12,000

$24,000

$26,000

4.5 points

Question 14

$8,000

$12,000

$24,000

$26,000

4.5 points

Question 15

Equipment with a cost of $25,000 and accumulated depreciation of $22,500 is sold for $3,500. What amount of gain or loss does the company recognize and record on the sale of the equipment?

$1,000 loss

$1,000 gain

$2,500 loss

$2,500 gain

4.5 points

Question 16

What adjusting entry does a company make to record depreciation of equipment?

Debits Depreciation Expense and credits Equipment

Debits Depreciation Expense and credits Accumulated Depreciation

Debits Accumulated Depreciation and credits Depreciation Expense

Debits Equipment and credits Accumulated Depreciation

4.5 points

Question 17

At what amounts are plant assets ordinarily reported on the balance sheet?

Current market values

Replacement costs

Cost less accumulated depreciation

Lower of cost of market

4.5 points

Question 18

What is the using up of natural resources called?

Allocation

Amortization

Depletion

Depreciation

4.5 points

Question 19

What journal entry does a company make to record the using up of natural resources?

Debits Accumulated Depreciation and credits Amortization Expense

Debits Amortization Expense and credits Accumulated Amortization

Debits Depletion Expense and credits Accumulated Depletion

Debits Depreciation Expense and credits Accumulated Depreciation

4.5 points

Question 20

What is the using up of intangible assets called?

Allocation

Amortization

Depletion

Depreciation

4.5 points

Question 21

Obligations due to be paid within one year or the company\'s operating cycle, whichever is longer, are reported as

Current assets

Current liabilities

Long-term assets

Long-term liabilities

4.5 points

Question 22

Our company needs money for a project and decides to borrow it from a bank. What journal entry does our company make to record the promissory note given to the bank to borrow this money?

Debits Accounts Payable and credits Cash

Debits Accounts Payable and credits Notes Payable

Debits Cash and credits Notes Payable

Debits Notes Payable and credits Cash

4.5 points

Question 23

A company borrows $10,000 from First Bank on March 1 by signing a $10,000, 6%, 30-day interest-bearing note. What journal entry does the company record when it pays the note on March 31, assuming no previous accrual of interest?

Debits Accounts Payable $10,000; debits Interest Expense $50; and credits Notes Payable $10,050

Debits Cash $10,050; credits Notes Receivable $10,000; and credits Interest Revenue $50

Debits Notes Payable $10,050 and credits Cash $10,050

Debits Notes Payable $10,000; debits Interest Expense $50; and credits Cash $10,050

4.5 points

Question 24

An employer has one employee who earned $2,000 the first month of employment. The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%. The employee has $213 in federal income taxes withheld and voluntary monthly deductions of $85 for health insurance and $25 for union dues. Calculate the employee\'s net pay for the first month.

$1,524

$1,677

$1,847

$2,000

4.5 points

Question 25

An employer has one employee who earned $2,000 his first month of employment. The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%. The employer\'s FUTA tax rate is 0.8% and the SUTA tax rate is 5.4%. Calculate the employer\'s payroll tax expense for the first month.

$124

$153

$277

$446

4.5 points

Question 26

What journal entry does a company make to record the accrued payroll expenses and liabilities for its employees?

Debits Cash for gross pay, debits payroll deductions to liability accounts, and credits Salaries Payable for net pay

Debits Salaries Expense for gross pay, credits payroll deductions to liability accounts, and credits Salaries Payable for net pay

Debits Salaries Expense for gross pay, credits payroll deductions to liability accounts, and credits Cash for net pay

Debits Salaries Payable for gross pay, debits payroll deductions to expense accounts, and credits Salaries Expense for net pay

4.5 points

Question 27

What journal entry does a company make to pay the payroll (net pay to employees)?

Debits Cash and credits Salaries Payable

Debits Salaries Expense and credits Cash

Debits Salaries Expense and credits Salaries Payable

Debits Salary Payable and credits Cash

4.5 points

Question 28

An employer\'s payroll taxes are as follows: FICA—Social Security of $124, FICA—Medicare of $29, State Unemployment Taxes of $108, and Federal Unemployment Taxes of $16. What journal entry does a company make to record the employer\'s payroll taxes?

Debits FICA—Social Security Taxes Payable for $124, debits FICA—Medicare Taxes Payable for $29, debits State Unemployment Taxes Payable for $108, debits Federal Unemployment Taxes Payable for $16, and credits Payroll Taxes Expense for $277

Debits Payroll Taxes Expense for $277, credits FICA—Social Security Taxes Payable for $124, credits FICA—Medicare Taxes Payable for $29, credits State Unemployment Taxes Payable for $108, and credits Federal Unemployment Taxes Payable for $16

Debits Payroll Taxes Expense for $277 an credits Cash for $277

Debits Taxes Payable for $277 and credits Payroll Taxes Expense for $277

4.5 points

Question 29

What journal entry does a company make to record estimated warranty expense at year-end?

Debits Estimated Warranty Liability and credits Cash

Debits Estimated Warranty Liability and credits Warranty Expense

Debits Warranty Expense and credits Cash

Debits Warranty Expense and credits Estimated Warranty Liability

4.5 points

Question 30

Which of the following is an advantage of bond financing?

Interest paid on bonds is tax deductible.

Bonds require payment of both periodic interest and par value at maturity.

Bonds can decrease return on equity.

Bonds affect owner control.

		Debits Accounts Receivable $98, debits Credit Card Expense $2, and credits Sales $100
		Debits Cash $98 and credits Accounts Receivable $98
		Debits Cash $98, debits Credit Card Expense $2, and credits Sales $100
		Debits Cash $100 and credits Sales $100