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Harding Company borrowed $10,000 on October 1, 2013. Harding issued a one year 6% discount note payable. The adjusting entry necessary to record accrued interest on December 31, 2013 would include a:


A) debit to Discount on Notes Payable of $150.
B) credit to Interest Payable for $150.
C) debit to Interest Expense for $150.
D) none of these.

E) A) and C)
F) None of the above

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How does a classified balance sheet enhance the usefulness of accounting information?

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Classified balance sheets are ...

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Under what conditions should a pending lawsuit be recognized in a company's financial statements? Under what conditions should the lawsuit be disclosed in the footnotes?

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A pending lawsuit should be recognized i...

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The Wage and Tax Statement, Form W-2, is sent to the employee annually to report earnings and withheld taxes.

A) True
B) False

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Fallon Company issued a $20,000 note to the Capital Bank on August 1, 2013. The note carried a one-year term and a 12% rate of interest. The adjusting entry on Fallon's books to record accrued interest expense on December 31, 2013 will


A) Decrease assets and decrease retained earnings by $1,000.
B) Increase liabilities and decrease equity by $800.
C) Increase liabilities and decrease equity by $1,000.
D) Decrease equity and increase liabilities by $2,400.

E) All of the above
F) A) and B)

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On January 2, 2013, the company recorded the following transaction: On January 2, 2013, the company recorded the following transaction: Recording this transaction will: A) decrease the current ratio to 1:1 B) increase the current ratio to 5:1 C) have no effect on the current ratio D) increase the current ratio to 3:1 Recording this transaction will:


A) decrease the current ratio to 1:1
B) increase the current ratio to 5:1
C) have no effect on the current ratio
D) increase the current ratio to 3:1

E) A) and B)
F) B) and C)

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The amount of cash flow from operating activities that would appear on the 2014 statement of cash flows would be:


A) $385 inflow
B) $700 inflow
C) $560 outflow
D) $18,245 outflow

E) A) and B)
F) A) and C)

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The current ratio is a measure of a company's liquidity.

A) True
B) False

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On December 31, 2013, Dover Co. accrued $1,000 of interest on a $20,000 note it had issued from the Friendly Bank on July 1, 2013. The principal and interest on the note are to be repaid on June 30, 2014 How would Dover's year-end adjustment to accrue the interest on the loan affect its financial statements for 2013? On December 31, 2013, Dover Co. accrued $1,000 of interest on a $20,000 note it had issued from the Friendly Bank on July 1, 2013. The principal and interest on the note are to be repaid on June 30, 2014 How would Dover's year-end adjustment to accrue the interest on the loan affect its financial statements for 2013?

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(N) (I) (D) (N) (I) (D) (N)
Explanation:...

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The carrying value of the liability appearing on the 12/31/12 balance sheet will amount to:


A) $26,800
B) $29,200
C) $30,000
D) $29,600

E) B) and C)
F) A) and C)

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