year-end_xtra_credit - MULTIPLE CHOICE QUESTIONS 1....

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Unformatted text preview: MULTIPLE CHOICE QUESTIONS 1. Liabilities are classified on the balance sheet as current or a. deferred. b. unearned. c. long-term. d. accrued. 2. Most companies pay current liabilities a. out of current assets. b. by issuing interest-bearing notes payable. c. by issuing stock. d. by creating long-term liabilities. 3. A current liability is a debt that can reasonably be expected to be paid a. within one year, or the operating cycle, whichever is longer. b. between 6 months and 18 months. c. out of currently recognized revenues. d. out of cash currently on hand. 4. Which of the following most likely would be classified as a current liability? a. Dividends payable b. Bonds payable in 5 years c. Three-year notes payable d. Mortgage payable as a single payment in 10 years 5. Failure to record a liability will probably a. result in an overstated net income. b. result in overstated total liabilities and owners equity. c. have no effect on net income. d. result in understated total assets. 6. Very often, failure to record a liability means failure to record a(n) a. revenue. b. asset conversion. c. footnote. d. expense. 7. Current liabilities are due a. but not receivable for more than one year. b. but not payable for more than one year. c. and receivable within one year. d. and payable within one year. 8. With an interest-bearing note, the amount of assets received upon issuance of the note is generally a. equal to the note's face value. b. greater than the note's face value. c. less than the note's face value. d. equal to the note's maturity value. 9. The interest charged on a $100,000 note payable, at the rate of 6%, on a 90-day note would be a. $6,000. b. $3,333. c. $1,500. d. $500. 10. The interest charged on a $100,000 note payable, at the rate of 6%, on a 60-day note would be a. $6,000. b. $3,333. c. $1,500. d. $1,000. 11. The interest charged on a $100,000 note payable, at the rate of 6%, for a year would be a. $6,000. b. $3,333. c. $1,500. d. $500. 12. The interest charged on a $50,000 note payable, at the rate of 6%, on a 90-day note would be a. $3,000. b. $1,500. c. $750. d. $500. 13. The interest charged on a $50,000 note payable, at the rate of 6%, on a 60-day note would be a. $3,000. b. $1,500. c. $750. d. $500. 14. Interest expense on an interest-bearing note is a. always equal to zero. b. accrued over the life of the note. c. only recorded at the time the note is issued. d. only recorded at maturity when the note is paid. 15. Sales taxes collected by a retailer are recorded by a. crediting Sales Taxes Revenue. b. debiting Sales Taxes Expense. c. crediting Sales Taxes Payable. d. debiting Sales Taxes Payable. 16. Unearned Rental Revenue is a. a contra account to Rental Revenue....
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year-end_xtra_credit - MULTIPLE CHOICE QUESTIONS 1....

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