9. Notes may be issued
a. To creditor’s to temporarily satisfy an account payable created earlier.
b. When borrowing money.
c. When assets are purchased. d. All of these choices are correct.
10. The journal entry a company uses to record the payment of an interest-bearing note is:
a. Debit Cash; credit Notes Payable.
b. Debit Notes Payable and Interest Receivable; credit Cash.
c. Debit Accounts Payable; credit Cash.
d. Debit Notes Payable and Interest Expense; credit Cash.
11. Which of the following taxes would be deducted in determining an employee’s net pay?
a. FICA taxes
b. FUTA taxes
c. SUTA taxes
d. All of these choices are correct.
12. Which of the following is not characteristic of a corporation?
a. Cash dividends paid by a corporation are deductible as expenses by the corporation.
b. A corporation can own property in its name.
c. Corporations are required to file federal income tax returns.
d. The financial loss that a stockholder may suffer from owning stock in a public company is limited.
13. The ability of a corporation to obtain capital is:
a. About the same as a partnership.
b. Enhanced because of limited liability and ease of share transferability.
c. Restricted because of the limited life of the corporation.
d. Less than a partnership.
14. A Stock split of 1:3 would:
a. Have no effect on the ownership of a corporation.
b. Dilute the ownership of a corporation.
c. Reduce the ownership of a corporation.
15. The Crafter Company has the following assets and liabilities:
Current portion of long-term debt
Determine the quick ratio (rounded to one decimal point).