Midterm 1 quiz 4

Question 1

Which of the following is an example of an implicit transaction?

Answer 1

c. Recording monthly depreciation on equipment

d. Expiration of prepaid rent.

Question 2

Which of the following is not an application of an accrual accounting?

Answer 2

Recording expenses when paid

Question 3

A company recorded cash purchases of supplies as a debit to what account?

Answer 3

Office Supplies Inventory

Question 4

The Wages Payable account is an example of

Answer 4

a liability

Question 5

ABC Engineering completed a survey for York, Corp., on July 30 and billed the company on
August 1. For ABC, this is an example of

Answer 5

an accrued revenue.

Question 6

The journal entry to record the receipt of revenue received in advance requires a

Answer 6

debit to Cash.

Question 7

The journal entry to record the accrual of interest expense on a one-year note requires a credit to

Answer 7

interest payable

Question 8

Which of the following accounts is a current asset?

Answer 8

Accounts Receivable

Question 9

Which of the following accounts is a current liability?

Answer 9

Wages payable + sales taxes payable

Question 10

Which of the following is used in liquidity determination?

Answer 10

current ratio

Question 11

Donald, Corp.’s balance sheet as of Dec. 31, 20X2 includes the following:
Current assets Current liabilities Total assets Total liabilities
$ 60,000
$ 15,000
$ 90,000
$ 45,000

What is Donald’s current ratio?

Answer 11

4.0

Question 12

Morton, Corp., has the following income statement items for the year 20X2:
Sales 100k
Gross profit 72k 
Operating expenses 47k
Net income 25k

What is Morton’s return on sales?

Answer 12

25%