There are no formal requirements for forming a sole proprietorship
Indicate whether the statement is true or false
True
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A company purchased $2900 of merchandise on July 5 with terms 2/10, n/30. On July 7, it returned $750 worth of merchandise. On July 12, it paid the full amount due. Assuming the company uses a perpetual inventory system, and records purchases using the gross method, the correct journal entry to record the payment on July 12 is:
A. Debit Accounts Payable $2150; credit Merchandise Inventory $43; credit Cash $2107. B. Debit Accounts Payable $2900; credit Cash $2900. C. Debit Merchandise Inventory $2150; credit Cash $2150. D. Debit Cash $2150; credit Accounts Payable $2150. E. Debit Accounts Payable $2150; credit Cash $2150.
Interest costs are included in the cost of an asset in conjunction with
A) long-term assets being purchased. B) long-term assets acquired for speculative purposes. C) long-term assets being constructed. D) natural resources and intangible assets.
Transfer pricing
A) is a concept readily accepted by managers of divisions, because it relies on concepts used in cost-based pricing methods. B) incorporates procedures that allow for ease in determining the amount of profit associated with each division of a decentralized company. C) involves determining the cost and profit if the output of one division is transferred to another division of the same company. D) is not used by many companies because it is difficult to eliminate intercompany profits.
Accrued interest on bonds that are sold between interest dates
a. is ignored by both the seller and the buyer. b. increases the amount a buyer must pay to acquire the bonds. c. is recorded as a loss on the sale of the bonds. d. decreases the amount a buyer must pay to acquire the bonds.