Exam 3 Review

What is the depreciation expense per year of a car that cost $6,000, will be used for 5 years and has a salvage value of $1,000?

• $1,200

• $200

• $1,000

• $600

Merchandise Sales totaled $45,000 and is subject to 8% sales tax. What is the sales tax liability? 

• $360,000

• $3,600

• $36,000

• $360

Merchandise sales totaled $42,000 and is subject to 9% sales tax. What is the sales tax expense?

• $3,780

• $37,800

• $4,667

• $0

The net realizable value for receivables is calculated:

• Accounts Receivables - Allowance for Doubtful Accounts

• Accounts Receivable - Bad Debts Expense

• Plant Assets - Accumulated Depreciation

• Accounts Payable - Allowance

Which of the following is a current asset:

• Inventory

• Cash

• Supplies

• All of the above

Which of the following is a current asset?

• Accounts Receivable

• Accounts Payable

• Equipment

• Goodwill

The classified balance sheet...

• is confidential to management.

• classifies current and long-term assets and liabilities.

• shows operating, investing and financing.

• returns all accounts to zero at the start of the year.

Ronald Inc. borrowed $10,000 from the bank at 6% for 6 years. How does this affect Ronald's assets?

• Total assets increased $600

• Total assets increased $60,000

• Total assets did not change

• Total assets increased $10,000

Use the following information:

Current Assets = $5,000                                  Current Liabilities = $2,000
Long-term Assets = $7,000                             Long-term Liabilities = $3,000
Intangible Assets = $2,000                              Stockholders' Equity = $9,000

What is the current ratio?

• 0.17

• 0.4

• 2.5

• 1

Which of the following in an intangible asset?

• Bonds

• Patent

• Common Stock

• Accounts Receivable