Chicago Company sold merchandise to a customer for $1,500 cash in a state with a 6% sales
Question:
$558.
$600.
$642.
$636.
Nevada Company paid to the state $1,800 in sales tax that it had previously collected from customers. What type of transaction was this?
Asset source
Asset use
Asset exchange
Claims exchange
How does the amortization of the principal balance affect the amount of interest expense recorded each succeeding year?
Has no effect on interest expense each succeeding year
Increases the amount of interest expense each succeeding year
Reduces the amount of interest expense each succeeding year
The effect depends on the interest rate.
Long-term debt would likely be used for which of the following?
acquisition of inventory
paying premiums for insurance
purchasing a building
paying salaries
Bonds payable are usually classified on the balance sheet as:
long-term liabilities.
current liabilities.
investments and funds.
other assets.
When does warranty cost appear on the statement of cash flows?
When there is a settlement of a warranty claim made by a customer.
When the warranty obligation is recognized.
When merchandise is sold.
Expert Answer:
1 D 636 In the case of a cash sale the entry is debit Cash Cash is increased since the customer pays in cash at the point of sale debit Cost of goods sold For a merchandising company Merchandise Inven... View the full answer
