21 secured operating lines of credit normally have lower rates of interest than unse 4300905

 

 

21) Secured operating lines of credit normally have lower rates of interest than unsecured operating lines of credit.

 

22) Long-term debt refers to obligations that have to be paid within a year of the balance sheet date.

 

23) Which of the following liabilities creates no expense on the part of the company?

A) Employment Insurance payable

B) Canada Pension Plan payable

C) GST payable

D) estimated warranty payable

 

24) When a company issues a short-term note payable:

A) the note payable account is credited.

B) the note payable is debited.

C) the interest expense is credited.

D) the interest expense account is debited.

 

25) Unearned revenue represents revenue that has:

A) been earned and collected.

B) been earned but not yet collected.

C) been collected but not yet earned.

D) not been collected nor earned.

26) Sales revenue for Joe's Sporting Goods for the current period amounted to $215,000. Joe's Sporting Goods records GST when merchandise is sold. All sales are on account. The GST rate is 5%. The journal entry would include a debit to:

A) Accounts Receivable for $215,000.

B) Accounts Receivable for $225,750.

C) GST Payable for $10,750.

D) Sales Revenue for $215,000.

 

27) Amounts owed to suppliers for products or services purchased on open accounts are called:

A) notes payable.

B) unearned revenues.

C) accounts payable.

D) accrued expenses.

 

Table 11-1

 

A $10,000, 90-day, 12% note payable was issued on November 1, 2013.

 

28) Referring to Table 11-1, what is the amount of the accrued interest on December 31, 2013?

A) $394.52

B) $95.34

C) $101.92

D) $197.26

 

29) Referring to Table 11-1, what is the amount of interest expense recorded in 2014?

A) $98.63

B) $193.97

C) $101.92

D) $120.00

30) Referring to Table 11-1, the entry on the maturity date would include a:

A) credit to Interest Payable for $98.63.

B) debit to Interest Expense for $98.63.

C) credit to Note Payable for $10,295.89.

D) credit to Cash for $10,000.