Merchandise inventory at the end of the year was inadvertently overstated. Which of the following statementscorrectly states the effect of the error on net income, assets, and owner's equity?
a. net income is overstated, assets are overstated, and owner's equity is understated
b. net income is overstated, assets are overstated, and owner's equity is overstated
c. net income is understated, assets are understated, and owner's equity is understated
d. net income is understated, assets are understated, and owner's equity is overstated
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Q. 2) The Securities and Exchange Commission (SEC) requires all publicly traded companies to file a report called the 10-K after the end of each company's fiscal year.
Indicate whether the statement is true or false
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Q. 3) A facility usually comprised of air-conditioned space with a raised floor, telephone connections, and computer ports, into which a subscriber can move equipment, is called a hot site.
Indicate whether the statement is true or false
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Q. 4) In December 2011, B. Rich worked for Payless, Inc. and earned 10,000. Federal income tax withholding is 20. The FICA rate is 6.2 and the Medicare tax is 1.45. What is B. Rich's gross pay?
A) 12,000
B) 12,765
C) 13,385
D) 10,000
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Q. 5) Most employers have to pay FICA and FUTA taxes.
a. True
b. False
Indicate whether the statement is true or false
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Q. 6) The direct write-off method provides a good match between the revenue (sale) and the bad debts expense, because the write-off is matched directly with the sale.
Indicate whether the statement is true or false
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