Text maxwell company sells goods and services gross

This preview shows page 16 - 20 out of 55 pages.

Question 10Question textMaxwell Company sells goods and services gross of sales taxes. In other words, the sales taxes are included in the sales price. The sales tax rate is 6 percent. At the end of the current period, the Revenue account has a balance of $265,000. The amount of sales tax payable is:Select one:a. $15,000. Correct. $265,000/1.06 = $250,000. $265,000 - $250,000 = $15,000.b. $15,900. c. $12,000. d. $18,000. FeedbackThe correct answer is: $15,000.
Question 11Question text(T / F) Credit cards are of two types — nonbank credit cards (such as American Express) and bank credit cards (such as VISA).
statement items or totals. Use of this analysis helps detect changes in a company's performance and highlights trends.Select one:
FeedbackCorrect.Question 2Question text(T / F) Vertical analysis consists of a study of a single financial statement in which each item is expressed as a percentage of a significant total.
FeedbackCorrect.Question 3Question text(T / F) Equity, or long-term solvency, ratios show the relationship between debt and equity financing in a company. These ratios include (1) equity (stockholders' equity) ratio and (2) stockholders' equity to debt ratio.Select one:True False
FeedbackCorrect.Question 4Question text(T / F) An objective of financial statement analysis is to provide information about the company's past performance and current financial position.
Question 5Question text(T / F) Vertical analysis helps detect changes in a company's performance over several periods and highlights trends.
Question 6Question text(T / F) Common-size statements provide information about changes in dollar amounts relative to the previous periods.

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture