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Current liabilities are cash and other resources that are expected to be sold, collected or used within one year or the company’s operating cycle whichever is longer.

On May 31, the Cash account of Boats Unlimited had a normal balance of $5,000. During May, the account was debited for a total of $12,200 and credited for a total of $11,500. What was the balance in the Cash account at the beginning of May?

Clayton makes a $25,000, 90-day, 7% cash loan to Citrus Co. Clayton’s entry to record the collection of the note and interest at maturity should be: (Use 360 days a year.)

On April 1, Penthouse Publishing Company received $1,548 from Albuquerque, Inc. for 36-month subscriptions to several different magazines. The company credited Unearned Fees for the amount received and the subscriptions started immediately. Assuming adjustments are only made at year-end, What is the adjusting entry that should be recorded by Penthouse Publishing Company on December 31 of the second year?

The time period assumption assumes that an organization’s activities can be divided into specific time periods such as months, quarters, or years.

Nicole Company collected $1,750 as payment for the amount owed by a customer from services provided the prior month on credit. How does this transaction affect the accounting equation for Nicole?

Clayton makes a $25,000, 90-day, 7% cash loan to Citrus Co. Clayton’s entry to record the collection of the note and interest at maturity should be: (Use 360 days a year.)

Sarah Harmer, Inc. issues 5%, 5-year bonds with a par value of $1,000,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 6%. What is the bond’s issue (selling) price, assuming the following factors:  n=   i=   Present Value of an Annuity   Present value of $1 5   5 %     4.3295   0.7835 10   3 %     8.7521   0.7812 5   6 %     4.2124   0.7473 10   3 %     8.5302   0.7441

Which of the following is classified as a plant asset?

Durr company makes a $60,000, 60-day, 12% cash loan to Ling Co. The maturity value of the loan is: (Use 360 days a year.)