Debts to be paid more than one year from now are claims against the firm's assets: in other words, they are long-term liabilities. These claims are from ________ who have provided capital to the firm but whose entire repayment is not due during the coming year or operating cycle.
A) banks and bondholders
B) banks and stockholders
C) stockholders and bondholders
D) all long-term lenders
Answer: A
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To test for unsupported entries in the ledger, the direction of audit testing should start from the:
A. Original source documents. B. Ledger entries. C. Sales invoices or shipping documents. D. Externally generated documents.
Which of the following is an example of the coordination and communication function of the budgeting process?
A) A budget demands integrated input from different business units and functions. B) Employees are motivated to achieve the goals set by the budget. C) Each department acts independently because the department manager will be evaluated on actual departmental results.
On September 12, Ryan Company sold merchandise in the amount of $5,800 to Johnson Company, with credit terms of 2/10, n/30. The cost of the items sold is $4,000. Johnson uses the periodic inventory system and the net method of accounting for purchases. Johnson pays the invoice on September 18, and takes the appropriate discount. The journal entry that Johnson makes on September 18 is:
A.
| Accounts payable | 5,800 | |
| Purchases discounts | 116 | |
| Cash | 5,684 |
B.
| Accounts payable | 4,000 | |
| Merchandise inventory | 80 | |
| Cash | 3,920 |
C.
| Purchases | 5,684 | |
| Cash | 5,684 |
D.
| Accounts payable | 5,684 | |
| Cash | 5,684 |
E.
| Cash | 5,684 | |
| Purchases discounts | 116 | |
| Accounts payable | 5,800 |
There is an ad for Levi's Warhol Factory X jeans in an issue of Vanity Fair magazine. The full-page ad highlights the Warhol images on the inside of the jeans. To which type of market is the advertisement targeted? Briefly explain your answer.
What will be an ideal response?