1. Entity E does not account for sales taxes separately when making sales. The sales tax rate is 5%. If the total amount collected was $68,250, how much was the sales tax? Round to the nearest dollar if necessary.

   		$3,250
   		$65,000.
   		$3,413.
   		$68,250.

3 points

QUESTION 7

1. Very often, failure to record a liability means failure to record a(n)

   		expense.
   		extraordinary item.
   		revenue.
   		gain.

3 points

QUESTION 8

1. Goodwill can be recorded

   		when customers keep returning because they are satisfied with the company's products.
   		when the company has exceptional management.
   		when the company acquires a good location for its business.
   		only when there is an exchange transaction involving the purchase of an entire business .

3 points

QUESTION 9

1. Entity B purchased an old shopping center to acquire the land on which it sits. Entity B paid $3,000,000. The seller valued the land at $2,000,000, and the old shopping center at $1,000.000. Entity B promptly tore down the shopping center at a cost of $500,000. What was the cost of the land to Entity B?

   		$3,000,000
   		$2,000,000
   		$3,500,000
   		$2,500,000

3 points

QUESTION 10

1. An advantage of issuing bonds payable to finance a plant expansion (rather than common stock) is that:

   		bond interest is tax deductible.
   		earnings per share may be higher
   		common shareholders retain their same percentage of ownership
   		all of the above