1. Current liabilities are expected to be paid within one year.

Select one:

True

False

2.

2. In 20X3, Toys 4 U reported inventory of $1,902 million and trade payables of $1,415 million. In 20X2, the company reported inventory of $2,464 million and trade payables of $1,280 million. What was the effect on the 20X3 cash flow from operating activities?

Select one:

a.A decrease in cash of $427 million.

b.A decrease in cash of $697 million.

c.An increase in cash of $427 million.

d.An increase in cash of $697 million.

3. The amount of sales tax collected by a retail store when making sales is

Select one:

a.a current liability.

b.miscellaneous revenue for the store.

c.not recorded because it is a tax paid by the customer.

d.recorded as an operating expense.

4. On January 1, 20X3, Osler Limited, a calendar-year company, issued $160,000 of notes payable, of which $40,000 is due on January 1 for each of the next four years. The proper balance sheet presentation on December 31, 20X3, is

Select one:

a.Current Liabilities, $120,000; Long-term Debt, $40,000.

b.Current Liabilities, $40,000; Long-term Debt, $120,000.

c.Current Liabilities, $160,000.

d.Long-term Debt, $160,000.

5. Time value of money is based on the concept that money received today is worth more than money to be received a year from today.

Select one:

True

False

6. Future income tax obligations should be reported on which of the following?

Select one:

a.A corporation's statement of financial position.

b.A corporation's income tax return.

c.Statement of changes in equity.

d.A corporation's income statement.

7. An annuity is a series of consecutive payments, each one increasing by a fixed dollar amount over the payment amount of the prior year.

Select one:

True

False

8. Armadillo Appliances sells new and reconditioned kitchen and laundry appliances. Armadillo sold a reconditioned refrigerator for $1,100 on Oct 25, 20X4, with a one-year warranty covering parts and labour. Warranty expense is estimated at 5% of the selling price, and the appropriate adjusting entry is recorded at Dec 31, 20X4. On January 6, 20X5, the refrigerator is returned for warranty repairs. This cost Armadillo $25 in parts and $20 in labour. When recording the January 6, 20X5 transaction, Armadillo would debit warranty expense with

Select one:

a.$0

b.$25

c.$45

d.$55

9. A company that sells primarily on a cash basis could support a lower quick ratio because their cash inflow is faster than a company selling on credit.

Select one:

True

False

10. A company receives $111, of which $11 is for PST (provincial sales tax). The journal entry to record the sale would include a

Select one:

a. debit to PST Expense for $11.

b. credit to PST Payable for $11.

c. debit to Cash for $90.

d. debit to Sales for $111.