San Diego State University - ACCTG 201

1)When a company has a current obligation to make a future payment to their supplier due to a shipment of supplies that were received last week, the company would record this transaction with an increase to an asset account and a(n)           account.

2. Which of the following items would be considered a current liability?

Notes payable, due in 3 months Accounts payable, terms n/30 Wages payable

Ace Company borrowed $10,000 from Fair Rates Bank by signing a two-year note payable. Ace's operating cycle is 14 months. This note would be considered a   on the balance sheet.

3. Bryne Co. sells merchandise and collects a 5% state sales tax. The tax is recorded on Bryne's general ledger as a(n)                                              account.

4. Obligations not due to be paid within one year or one operating cycle, whichever is longer, are considered to be:

5. A known liability arises from a situation with little uncertainty, with set agreements, contracts, or laws. These liabilities are measurable. Known liabilities would include all of the following items, except:

6. Spot Co. purchases office supplies from Sally Supplies, Inc.. Spot does not pay cash for the purchase, and now owes the amount to Sally. This transaction would typically be recorded in which account in Spot's books?

7. Damen's Co. sells merchandise with a list price of $500 and collects sales tax of $50. The sales tax would be recorded with a credit to which account?

8. Ace Company borrowed $10,000 from Fair Rates Bank by signing a two-year note payable. Ace's operating cycle is 14 months. This note would be considered a   on the balance sheet.

9.              are amounts owed to suppliers for products or services purchased on credit.

10. A company sells 12-month subscriptions to popular magazines. During the month of May, the company sells $10,000 in magazines, which will start in June. The journal entry to record the sales not yet earned will include a credit to which account?

11. Fortiz Co. receives $85 for the sale of merchandise with a sales price of $80 and sales tax of $5. The entry to record the $5 sales tax would require which of the following?

12. $1,000 60-days from now. As a result of this transaction, Cadie would record a(n)      on her balance sheet.

13. Niwa Co. replaced a $3,000 account payable balance to Fiona Co. with a 60- day, $3,000 note bearing 5% annual interest. Niwa's entry to record this transaction would include which of the following entries?

14. A written promise to pay a specified amount on a stated future date within one year or the company's operating cycle, whichever is longer, is considered a   .