Acc 201 Chapter 9 Study Guide1. Which of the following accounts is not classified as a current liability?
2. Current liabilities are defined as those liabilities which will be satisfied
3. The payment of accounts payable results in a(n)
4. If a company purchases $3,200 worth of inventory with terms of 2/10, n/30 on March 3 and pays March 12, then the amount paid to the seller would be
5. If a company purchases $3,200 worth of inventory with terms of 2/10, n/30 on March 3 and pays April 2, then the amount paid to the seller would be
6. If a company purchases $3,000 worth of inventory with terms of 1/15, n30 and pays within 15 days, then the amount paid to the seller would be
7. There are some liabilities, such as income tax payable, for which the amounts must be estimated. Failure to estimate these amounts and record them would be a violation of the
8. Antonios Inc. has a weekly payroll of $8,000 for a 5-day workweek, Monday through Friday. If December 31, the last day of the accounting year, falls on Wednesday, Antonios would make an adjusting entry that would
9. An example of a current liability that must be accrued is
10. On October 1, Wilshire Company borrowed $60,000 from People's National Bank on a 1-year, 7% note. If the company's fiscal year ends as of December 31, Wilshire should make an entry to increase
11. On May 1, the Shoe Zoo Company borrowed $30,000 from the First Bank of Columbus on a 1-year, 6% note. If the company keeps its records on a calendar year, an entry is needed on December 31 to increase
12. The total amount of simple interest calculated annually on a $6,000 note payable for 3 years at 11% is
13.Exhibit 9-1 Use the information provided in the time value of money tables given below to answer the questions that follow. Refer to Exhibit 9-1. If interest is compounded annually, the total amount of interest on an $18,000 note payable for 4 years at 10% is
There are 4 charts that follow these may or may not be the same charts you have on the test. The procedure to find the answer will be the same. Use these charts on all remaining questions.
Hint: If the question involves a payment look at the annuity tables. If it they are investing all the funds now look at present value. If they need a value at a later time look at future value.
14. Use the information provided in the time value of money tables given below to answer the questions that follow.
Refer to Exhibit 9-1. The total amount of interest compounded quarterly on a $1,500 note payable for 1 year at 12% is
15. Refer to Exhibit 9-1. If you must calculate the present value of an amount at 8% compounded quarterly for 2 years, then the interest factor used in the calculation is
16. Refer to Exhibit 9-1. If a company wishes to accumulate $500,000 in 20 years at 5% by making equal yearly deposits into an account, calculation of the deposits is an application of the
17. Refer to Exhibit 9-1. The future value of equal semi-annual payments of $500 at 8% compounded semiannually for 4 years is
18. Refer to Exhibit 9-1. The present value of $7,000 to be received in 7 years at 7% compounded annually is
19. Refer to Exhibit 9-1. How much would have to be deposited in a savings account earning 6%, so that equal annual withdrawals of $200 can be made at the end of each of 10 years? The balance at the end of the last year would be zero.
20. Refer to Exhibit 9-1. Lisa inherited $140,000 from an aunt. If Lisa decides not to spend her inheritance but to leave the money in her savings account until she retires in 15 years, how much money will she have assuming an annual interest rate of 8%, compounded semiannually?
21. Refer to Exhibit 9-1. Tim wants to save some money so that he can make a down payment of $3,000 on a car when he graduates from college 4 years from now. If he opens a savings account and earns 3% on his money, compounded annually, how much will he have to invest now?
22. Refer to Exhibit 9-1. Curtis, a high school math teacher, wants to set up an IRA account into which he will deposit $2,000 per year. He plans to teach for 20 more years and then retire. If the interest on his account is 7% compounded annually, how much will be in his account when he retires?