Author: Anonymous

The business entity assumption:

Venables, Inc. purchases office equipment at the beginning of the year at a cost of $15,000. The machine is depreciated using the straight-line method. The machine’s useful life is estimated to be 7 years with a $1,000 salvage value. The journal entry to record the first year’s depreciation is:

Two common subgroups for liabilities on a classified balance sheet are:

Bicycles Unlimited is required by law to collect and remit sales taxes to the state. If Bicycles Unlimited has $78,000 of cash sales that are subject to a 6% sales tax, what is the journal entry to record the cash sales?

The Income Summary account is used to:

Identify the statement below that is true.

Swallow Rentals purchased office supplies on credit. The general journal entry made by Swallow Rentals will include a:

Donavan, Inc.’s most recent balance sheet reports total assets of $42,000,000, total liabilities of $16,000,000 and stockholders’ equity of $26,000,000. Management is considering using $3,000,000 of excess cash to prepay $3,000,000 of outstanding bonds. What effect, if any, would prepaying the bonds have on the company’s debt-to-equity ratio?

Temporary accounts include all of the following except:

The business entity assumption means that a business is accounted for separately from other business entities, including its owner or owners.