B. Bonds Company The following is a single-step income statement for the B. Bonds Company:
B. Bonds Company Income Statement
For the Year Ended December 31, 2004
Net Sales $200,000
Interest Income 17,500
Total Revenues $217,500
Cost of Goods Sold $50,000
Selling Expenses 20,000
General and Administrative Expenses 27,500
Interest Expense 12,500
Income Tax Expense 39,000
Total Expenses 149,000
Net Income $68,500
Refer to B. Bonds Company. If the income statement were prepared in a multiple-step format, income from operations would be __________.
a. $ 77,500
b. $ 80,000
c. $ 102,500
d. $ 97,500
A check drawn by a depositor in payment of a voucher for $925 was recorded in the journal as $295. What entry is required in the depositor’s accounts?
a. decrease Accounts Payable; decrease Cash
b. increase Cash; decrease Accounts Receivable
c. increase Cash; increase Accounts Payable
d. increase Accounts Receivable; decrease Cash
CPA Assume a CPA bills his clients $20,000 for fees earned in September. He collects $5,000 in September and the balance in October. Refer to CPA. Under the cash basis of accounting, how much revenue should the CPA recognize in September?
Bank customers are considered creditors of the bank so the bank shows their accounts as a liability on the bank’s records.
Using a perpetual inventory system, the return from a customer of merchandise sold on account:
a. decreases Sales Returns and Allowances
b. decreases Merchandise Inventory
c. decreases Cost of Merchandise Sold
d. increases Cost of Merchandise Sold