Author: Anonymous

A company issued 5-year, 7% bonds with a par value of $100,000. The market rate when the bonds were issued was 6.5%. The company received $102,105 cash for the bonds. Using the straight-line method, the amount of recorded interest expense for the first semiannual interest period is:

Use the following information about the current year’s operations of a company to calculate the cash paid for merchandise.           Cost of goods sold $ 500,000   Merchandise inventory, January 1   85,000   Merchandise inventory, December 31   97,000   Accounts payable, January 1   68,000   Accounts payable, December 31   60,000  

The adjusting entry to reflect inventory shrinkage is a debit to Income Summary and a credit to Inventory Shrinkage Expense.

The financial statement that shows the beginning balance of retained earnings; the changes in equity that resulted from net income (or net loss); dividends; and the ending retained earnings balance, is the:

 An income statement is also called an earnings statement, a statement of operations or a profit and loss statement. 

When a voucher system is used, an invoice approval is not needed as long as the purchase is evidenced by an invoice and purchase order.

The greater the times interest earned ratio, the greater the risk a company is exposed to.

The accrual basis of accounting requires adjustments to recognize revenues in the periods they are earned and to match expenses with revenues.

Which of the following statements is not  true:

Dividing Accounts receivable, net by Net sales and multiplying the result by 365 is the: