Known liabilities of estimated amounts are:

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  1. Known liabilities of estimated amounts are:
    A. reported on the income statement.
    B. reported only in the notes to the financial statements.
    C. ignored (Record them when paid.) or
    D. reported on the balance sheet?

  2. Amounts owed for products or services purchased on account are called:
    A. warranty payable
    B. accounts payable
    C. unearned revenue or
    D. accrued expense?

  3. On January 1, 2014, a business borrowed $10,000 on a five-year, 8% note payable. At December 31, 2014, the business should record:
    A. interest payable of $800
    B. note receivable of $10,000
    C. cash payment of $10,000 or
    D. nothing (The note is already on the books.)?

  4. A corporation sells $140,000 (selling price) of goods and collects sales tax 4%. What current liability does the sale create?
    A. Unearned revenue of $5,600
    B. Sales tax payable of $5,600
    C. Sales revenue of $145,600 or
    D. None, the company collected cash up front?

  5. Thompson Electric (TE) owed Estimated Warranty Payable of $1,400 at the end of 1023. During 2014, TE made sales of $130,000 and expects product warranties to cost the company 2% of the sales. During 2014, TE paid $2,500 for warranties. What is TE’s Estimated Warranty Payable at the end of 2014?
    A. $4,000
    B. $1,500
    C. $2,500 or
    D. $2,600?