If a manufacturer ships merchandise to a retailer on consignment, the unsold merchandise should be included in theinventory of the
a. consignee
b. retailer
c. manufacturer
d. shipper
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Q. 2) Avatar, Inc. bought a machine on January 1, 2011 for 96,000. The machine is expected to last for 8 years, after which it will be worthless. How much depreciation expense will Avatar show on its income statement for the year ended December 31, 2011?
A) 96,000
B) 16,000
C) 12,000
D) 0. Depreciation expense does not appear on the income statement.
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Q. 3) The disaster recovery strategy known as a cold site is a fully equipped data center that is made available to client companies for a monthly subscriber fee.
Indicate whether the statement is true or false
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Q. 4) Vestige, Inc needs another loan from a bank in order to pay its bills. In order to improve its chances of getting another loan, it reports its ten-month note payable as a long-term liability.
Discuss the treatment of this note payable including the financial statement presentation and the effect on the current ratio. Discuss the ethical issue with Vestige's treatment of this note payable.
What will be an ideal response?
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Q. 5) The payroll register is a key source of information for computing employer payroll taxes.
a. True
b. False
Indicate whether the statement is true or false
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Q. 6) On June 30, 2011, Xanadu Corporation issued 200,000 of 10-year, 8 bonds at 99. The bonds pay interest semi-annually on June 30 and December 31.These bonds sold at 99 because the ________.
A) stated interest rate was greater than the market rate.
B) stated interest rate was less than the market rate.
C) bonds were issued six months after yearend.
D) bonds are installment notes.
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