Question

answer following questions.

want to ensure my answers are correct.

record these sales? A) A debit to Sales revenue for $215,000 B) A credit to Accounts receivable for $215,000 e) A dcbit to Sales tax payable for $15.050 A debit to Accounts receivable for $230.050 20) A $20,000, 3-month, 8% note payable was issued on November 1, 2015. What inforest on December 31, 2015? A) $200 P$267 C) $133 D) $800 Issued on November 1, 2015. What is the amount of accrued All sales are cash. What amount will be 21) Archie's had sales of $6,758. The state sales tax rate is 79 credited to Sales revenue? ..) $6,758.00 B) $7.231.06 C) $473.06 D) 5458.00 22 On June 20, 2013, Parker Services received $2,400 in advance from a customer for one month's service. The journal entry to record the receipt of cash would be which of the following? A) Debit Unearned service revenue $2.400 and credit Cash $2,400 B) Debit Cash $2.400 and credit Service revenue $2,400. C) Debit Uneamed service revenue $2,400 and credit Service revenue $2,400 ) Debit Cash $2,400 and credit Unearned service revenue $2,400. 23) Ace Appliances sells dishwashers with a 3-year warranty, in 2012, there are $90,000 of sales revenues for dishwashers. The company estimates Warranty expense at 3% of revenues. What is the 2012 warranty expense? A) $2,700 B) $809 C) $0 $3,000 24) A company has been sued for product failures allegedly resulting in injuries to the individuals bringing the lawsuit. The company's lawyers believe it is more than remote, but less than probable, that the lawsuit will result in an actual liability. Which of the following actions should be taken by the company's management? A) The liability should be estimated and recorded as an expense. B. The situation should be described in a note to the financial statements. C) The possible liability should be ignored. D) Management should consider resigning. 25) Which of the following is TRUE of a contingent liability? A) It is a potential liability that depends on a future event. B) It is an actual linbility that is difficult to estimate. Cy It is an actual liability that depends on a past event. Dy It is a liability resulting from a lawsuit settled in court.

Answer 1

Question no 20

Answer (c) $ 267

Calculation 20000*8%*60/360 = 267.67 or $267

Question no 21.

Answer (A) $6758

since the sales tax amount is not recorded as sales revenue. there fore sales revenue will be 6758

Question no 22.

Answer (D) Debit Cash $ 2400 and Credit unearned service revenue $2400.

Since Services are yet to be performed therefore here we credit unearned service revunue.

Question no 23.

Answer (A) $2700

Since company estimates warranty expense as 3% of revenue

ans Sales revene is $90000

therefore the warranty expense is = 90000*3% = $ 2700

Question no 24.

Answer (B) The situation should be described in a notes to the financial statements.

It is shown as contingent liability because the probability of law suit result in actual liability are less than probable but more than remote so it is to be reported as contingent liability in notes

Question no 25.

Answer (A) It is a potential liability that depends on a future event.

A contingent liability means a probable/potential liability or obligation that depends upon an uncertain future event which may or may not be occure.