Identify the account below that is classified as an asset in a company's chart of accounts:
A. Common Stock
B. Accounts Receivable
C. Unearned Revenue
D. Accounts Payable
E. Service Revenue
Answer: B
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Which of the following is not a right possessed by common stockholders of a corporation?
a. the right to vote in the election of the board of directors b. the right to receive a minimum amount of dividends c. the right to sell their stock to anyone they choose d. the right to share in assets upon liquidation
Which of the following is not a cash outflow from an operating activity?
a. a withdrawal by the owners; b. a payment for the acquisition of inventory; c. a tax payment to the government; d. a payment for interest on a loan; e. the payment of wages.
Phoenix is planning to increase the sales price to $750. What impact will the increase in sales price have on the contribution margin ratio?
Phoenix was a professional classical guitar player until a motorcycle accident left him disabled. After
long months of therapy, he hired an experienced luthier and started a small shop to make and sell
Spanish guitars. The guitars sell for $700, and the fixed monthly operating costs are as follows:
Phoenix's accountant told him about contribution margin ratios, and Phoenix understood clearly that for
every dollar of sales, $0.60 went to cover his fixed costs, and anything above that point was profit.
A) It will stay the same.
B) It will increase to 53.33%.
C) It will increase to approximately 62.67%.
D) It will decrease to approximately 49.33%.
Assume 4 separate purchases of 100 units of the same item as follows: 100 @ $0.25 each; 100 @ $0.23 each; 100 @ $0.21 each and 100 @ $0.26 each. An ending inventory count showed 230 of the items still in stock. Under the LIFO method, cost of ending inventory is:
a. $54.30 b. $53.90 c. $59.30 d. $55.00 e. $53.40