Question

gased on the following data for the current year, what is the acounts receivable turnover? Sales on account during year Cost of merchandise sold during year Accounts receivable, beginning of year Accounts receivable, end of year Inventory, beginning of year Inventory, end of year $584,000 300,000 45,000 35,000 90,000 110,000 a) 7.3 b) 2.5 c) 25 d) 14.6 41) Current liabilities are a) Due and receivable within one year b) Due, but not payable for more than one year c) Due within one year and must be paid out of current assets d) None of the above 42) Receiving payment prior to delivering goods or services creates a) b) c) d) A current liability called Accounts Payable An asset called Accounts Receivable A revenue called Sales A current liability called Unearned Revenue 43) The journal entry a company uses to record the issuance of a note for the purpose of borrowing funds for the business is a) Debit Accounts Payable: Credit Notes Payable b) Debit Cash; Credit Notes Payable c) Debit Notes Payable; Credit Cash d) Debit Cash and Interest Expense; Credit Notes Payable 44) The journal entry to record the payroll for a period will include a a) Credit to Wages Payable for gross earnings b) Credit to Wages Payable for gross earnings less taxes payable c) Credit to Wages Payable for gross earnings less all payroll deductions d) Credit to Wages Payable for gross earnings less voluntary deductions 45) The journal entry to record the payroll for a period will include a a) Debit to Wages Expense for gross earnings b) Debit to Wages Expense for gross earnings less taxes payable c) Debit to Wages Expense for gross earnings less all payroll deductions d) Debit to Wages Expense for gross earnings less voluntary deductions 46) Which one of the following payroll taxes does not result in a payroll tax expense for the employer? a) Social security tax b) Federal income tax withholding c) Federal unemployment tax d) State unemployment tax

Answer 1

Answer40 is d Average Accounts Receivable ($45,000 $35,000) /2 Average Accounts Receivable $40,000 Accounts Receivable Turnover Sales/ Average Accounts Receivable Accounts Receivable Turnover $584,000 $40,000 Accounts Receivable Turnover 14.6 Answer41 is c. Current Liabilities are those liabilities which are paid within 1 year. Generally, current liabilities are paid out of current assets. Answer42 is d Receiving payment prior to delivering goods or services creates a current liability called unearned revenue Answer43 is b Issuance of a note for the purpose of borrowingfunds for the business will increase cash and liability (Notes payable) Journal entry to record issuance will be: Debit Credit Cash Notes Payable