51. SALAM Company purchased equipment having an invoice price of $11,500. The terms of sale were 2/10, n/30, and SALAM paid within the discount period. In addition, SALAM paid a $160 delivery charge, $185 installation charge, and $931 sales tax. The amount recorded as the cost of this equipment is: 52.In developing the cash flows from operating activities, most companies in the U. S. use the direct method. use the indirect method. present both the indirect and direct methods in their financial reports. prepare the operating activities section on the accrual basis.53."I was just following orders" is an acceptable defense if you committed an unethical action during an audit. True False54.Which of the following is/are true about the sole trader form of business? (a) A sole trader is liable to pay income tax on his/her earnings (b) Sole traders must register the name of their business with the registrar of companies (c) Sole traders do not need to consult accountants (d) All of the given options55.Videobusters, Inc. offered books of video rental coupons to its patrons at $40 per book. Each book contained a certain number of coupons for video rentals. During the current period 500 books were sold for $20,000, and this amount was credited to Unearned Rental Revenue. At the end of the period, it was determined that $15,000 worth of coupons had been used by customers to rent videos. The appropriate adjusting entry at the end of the period would be: Debit Rental Revenue $5,000 and credit Unearned Rental Revenue $5,000. Debit Rental Revenue $15,000 and credit Unearned Rental Revenue $15,000. Debit Unearned Rental Revenue $5,000 and credit Rental Revenue $5,000. Debit Unearned Rental Revenue $15,000 and credit Rental Revenue $15,000.56.Adama Company reported a net loss of $6,000 for the year ended December 31, 2014. During the year, accounts receivable increased $15,000, merchandise inventory decreased $12,000, accounts payable decreased by $20,000, and depreciation expense of $12,000 was recorded. During 2014, operating activities used net cash of $17,000. used net cash of $29,000. provided net cash of $24,000. provided net cash of $21,000.57.The journal entry to record a particular business transaction includes a credit to the Cash account. This transaction is most likely also to include: Issuance of new capital stock. The purchase of an asset on account. Payment of an outstanding note payable. A credit to Accounts Receivable.58.The cost of insurance is considered an expense: Only when the entire policy period has passed. Only when the policy is purchased. Only when the premium is paid. Evenly over the term of the policy.59.Recording depreciation expense is an example of an adjusting entry to accrue unpaid expenses resulting from expenses being incurred before cash is paid. True False60."When a Liability is reduced or decrease, it is recorded on the __________" Left or Credit side of the account Right or Debit side of the account Right or Credit side of the account Left or Debit side of the account

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Answered: 51. SALAM Company purchased equipment…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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51. SALAM Company purchased equipment having an invoice price of $11,500. The terms of sale were 2/10, n/30, and SALAM paid within the discount period. In addition, SALAM paid a $160 delivery charge, $185 installation charge, and $931 sales tax. The amount recorded as the cost of this equipment is:

52.

In developing the cash flows from operating activities, most companies in the U. S.

		use the direct method.
		use the indirect method.
		present both the indirect and direct methods in their financial reports.
		prepare the operating activities section on the accrual basis.

53.

"I was just following orders" is an acceptable defense if you committed an unethical action during an audit.

True

False

54.

Which of the following is/are true about the sole trader form of business?

		(a) A sole trader is liable to pay income tax on his/her earnings
		(b) Sole traders must register the name of their business with the registrar of companies
		(c) Sole traders do not need to consult accountants
		(d) All of the given options

55.

Videobusters, Inc. offered books of video rental coupons to its patrons at $40 per book. Each book contained a certain number of coupons for video rentals. During the current period 500 books were sold for $20,000, and this amount was credited to Unearned Rental Revenue. At the end of the period, it was determined that $15,000 worth of coupons had been used by customers to rent videos. The appropriate adjusting entry at the end of the period would be:

		Debit Rental Revenue $5,000 and credit Unearned Rental Revenue $5,000.
		Debit Rental Revenue $15,000 and credit Unearned Rental Revenue $15,000.
		Debit Unearned Rental Revenue $5,000 and credit Rental Revenue $5,000.
		Debit Unearned Rental Revenue $15,000 and credit Rental Revenue $15,000.

56.

Adama Company reported a net loss of $6,000 for the year ended December 31, 2014. During the year, accounts receivable increased $15,000, merchandise inventory decreased $12,000, accounts payable decreased by $20,000, and depreciation expense of $12,000 was recorded. During 2014, operating activities

		used net cash of $17,000.
		used net cash of $29,000.
		provided net cash of $24,000.
		provided net cash of $21,000.

57.

The journal entry to record a particular business transaction includes a credit to the Cash account. This transaction is most likely also to include:

		Issuance of new capital stock.
		The purchase of an asset on account.
		Payment of an outstanding note payable.
		A credit to Accounts Receivable.

58.

The cost of insurance is considered an expense:

		Only when the entire policy period has passed.
		Only when the policy is purchased.
		Only when the premium is paid.
		Evenly over the term of the policy.

59.

Recording depreciation expense is an example of an adjusting entry to accrue unpaid expenses resulting from expenses being incurred before cash is paid.

True

False

60.

"When a Liability is reduced or decrease, it is recorded on the __________"

		Left or Credit side of the account
		Right or Debit side of the account
		Right or Credit side of the account
		Left or Debit side of the account

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