ACC 305 Week 3 Quiz

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1. On November 10 of the current year, Cherokee Industries sold materials to a customer for $8,000 with credit terms 2/10, n/30. Cherokee uses the net method of accounting for cash discounts. What entry would Cherokee make on November 10?

2. Cash that is restricted and not available for current operations is reported in the balance sheet as:

3. Which of the following must be known to compute the interest rate paid from financing an asset purchase with an annuity?

4. Zulu Corporation hires a new chief executive officer and promises to pay her a signing bonus of $2 million per year for 10 years, starting five years after he joins the company. The liability for this bonus when the CEO is hired:

5. LeAnn wishes to know how much she should set aside now at 7% interest in order to accumulate a sum of $5,000 in four years. She should use a table for the:

6. Loan A has the same original principal, interest rate, and payment amount as Loan B. However, Loan A is structured as an annuity due, while Loan B is structured as an ordinary annuity. The maturity date of Loan A will be:

7. A note receivable Mild Max Cycles discounted with recourse was dishonored on its maturity date. Mild Max would debit:

8. George Jones is planning on a cruise for his 70th birthday party. He wants to know how much he should set aside at the beginning of each month at 6% interest to accumulate the sum of $4,800 in five years. He should use a table for the:

9. Nontrade receivables do not include:

10. Which of the following do not change the balance in Accounts receivable?