A current liability is a debt that can reasonably be expected tobe paid a within one year
Question:
A current liability is a debt that can reasonably be expected tobe paid
a within one year or the operating cycle, whichever islonger.
b between 6 months and 18 months.
c out of currently recognized revenues.
d out of cash currently on hand.
Assume a 360-day year for calculating interest. Theinterest charged on a $200,000 note payable, at the rate of 8%, ona 90-day note would be
a. $16,000.
b $8,888.
c $4,000.
d $1,333.
On September 1, Joe's Painting Service borrows $100,000 fromNational Bank on a 4-month, $100,000, 6% note. What entrymust Joe's Painting Service make on December 31 before financialstatements are prepared?
a Interest Payable...................................................................... 2,000
Interest Expense............................................................ 2,000
b Interest Expense..................................................................... 6,000
Interest Payable............................................................. 6,000
c Interest Expense..................................................................... 2,000
Interest Payable............................................................. 2,000
d Interest Expense..................................................................... 2,000
NotesPayable................................................................ 2,000
Crawford Company has total proceeds (before segregation of salestaxes) from sales of $4,770. If the sales tax is 6%, theamount to be credited to the account Sales Revenue is:
a. $4,770.
b $4,484.
c $5,056.
d $4,500.
Sales taxes collected by the retailer are recorded as a(n)
a revenue.
b liability.
c expense.
d asset.
Intermediate Accounting
ISBN: 978-1260481952
10th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas