1. The interest accrued on $7,500 at 6% for 60 days is:
A.$75
B. $125
C. $90
D. $112
2. Depreciation is higher and income is lower in the short run when using accelerated versus straight-line methods.
True
False
True
False
3. Highland Co. receives a 8%, 60-day note from a customer for $1,500. Total interest due on maturity date is:
A. $50.00
B. $20.00
C. 75.00
D. $150.00
A. $50.00
B. $20.00
C. 75.00
D. $150.00
4. The account receivable turnover measures:
A. How long it takes to sell accounts receivable to a factor
B. How often, on average, receivables are received and collected during the period
C. The relation of cash sales to credit sales
D. How long it takes to sell merchandise inventory
A. How long it takes to sell accounts receivable to a factor
B. How often, on average, receivables are received and collected during the period
C. The relation of cash sales to credit sales
D. How long it takes to sell merchandise inventory
5.On January 1, 2016, a company disposed of machinery for $16,200 cash that had cost $35,000, a salvage value of $5,000, and a useful life 10 years. The double-declining-balance depreciation method was used. On December 31, 2015, accumulated depreciation was $20,664. Prepare a journal entry to record the disposal of the machinery .
A. Dr Cash $16,200 Dr Gain on Sale of Machinery $1,864 Dr Accumulated Depr-Machinery $20,664 Cr Machinery $38,728
B. Dr Cash $16,200 Dr Loss on Sale of Machinery $18,800 Cr Machinery $35,000
C. Dr Cash $18,064 Dr Loss on Sale of Machinery $1,864 Cr Machinery $19,928
D. Dr Cash $16,200 Dr Accumulated Depreciation $20,664 Cr Machinery $35,000
Cr Gain on Disposal of Machinery $ 1,864
A. Dr Cash $16,200 Dr Gain on Sale of Machinery $1,864 Dr Accumulated Depr-Machinery $20,664 Cr Machinery $38,728
B. Dr Cash $16,200 Dr Loss on Sale of Machinery $18,800 Cr Machinery $35,000
C. Dr Cash $18,064 Dr Loss on Sale of Machinery $1,864 Cr Machinery $19,928
D. Dr Cash $16,200 Dr Accumulated Depreciation $20,664 Cr Machinery $35,000
Cr Gain on Disposal of Machinery $ 1,864
6. The book value of an asset when using double-declining-balance depreciation is always greater than the book value from using straight-line depreciation, except at the beginning and the end of the asset’s useful life, when it is the same.
True
False
True
False
