College Acct 1- Chapter 9

What type of account is Unearned Revenue?

• Asset

• Revenue

• Expense

• Liability

• None of the above

On December 1, Intrepid Company signed a 120-day, 4% note payable, with a face value of $15,000. What amount of interest expense is accrued at December 31 on the note? (Use 360 days a year.)

• $200

• $50

• $300

• $0

• $600

The difference between the amount received from issuing a note payable and the amount repaid at maturity is referred to as:

• Principal

• Accounts Payable

• Cash

• Interest

• Face Value

On November 1, Collin Co. signed a 120-day, 6% note payable, with a face value of $7,000. What is the maturity value of the note on March 1? (Use 360 days a year.)

• $140

• $0

• $7,140

• $7,000

• $7,420

Contingent liabilities must be recorded if:

• The future event is probable and the amount owed can be reasonably estimated

• The future event is probable but not estimable

• The future event is remote

• The amount owed cannot be reasonable estimated

• The future event is reasonably possible but not estimable

If a professional sports team has advance ticket sales totaling $1,250,000 for the upcoming basketball season, the receipt of Cash would be journalized as:

• Debit Cash; Credit Unearned Revenue

• Debit Sales; Credit Unearned Revenue

• Debit Cash; Credit Ticket Sales Payable

• Debit Cash; Credit Sales

• Debit Unearned Revenue; Credit Sales

A contingent liability is:

• An obligation arising from a future event

• An obligation arising from the purchase of goods or services on credit

• An obligation not requiring future payment

• A potential obligation that depends on a future event arising from a past transaction or event

• Always of a specific amount

Which of the following best describes Accounts Payable?

• Amounts owed to suppliers for goods and services received

• Short-term liabilities

• Always due within 60 days

• Contingent liabilities

• Not typically associated with specific due dates

Contingent liabilities are recorded or disclosed UNLESS they are:

• Remote

• Reasonably possible

• Probable and not estimable

• Probable and estimable

• Possible and estimable

Sales Taxes Payable is a(n) _____________ account with a ____________ balance.

• expense, debit

• asset, credit

• liability, credit

• liability, debit

• revenue, credit