Classify the following accounts according to the appropriate balance sheet category.
a. Assets
b. Liabilities
c. Shareholders' equity
_____ 1. Common stock
_____ 2. Retained earnings
_____ 3. Notes payable
_____ 4. Cash
_____ 5. Inventory
_____ 6. Land
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Q. 2) If the revenues are correctly reported and the gross profit of a company is understated, what is the effect onowner's equity?
a. understated
b. overstated
c. correctly stated
d. none of these
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Q. 3) The operations run manual describes user procedures for an application and assists the user in preparing inputs and using outputs.
Indicate whether the statement is true or false
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Q. 4) In December 2010, Bob Cratchit worked for Scrooge & Marley and earned 1,000. Federal income tax withholding is 10. The FICA rate is 6.2 and the Medicare tax is 1.45. What is Bob's net pay?
A) 1,000
B) 823.50
C) 900
D) 923.50
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Q. 5) Self-employed individuals can be viewed as both employer and employee.
a. True
b. False
Indicate whether the statement is true or false
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Q. 6) Freight out is an operating expense recorded on the seller's books for the costs of shipping merchandise to buyers.
Indicate whether the statement is true or false
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