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Generally accepted accounting principles are the basic assumptions, concepts, and guidelines for preparing financial statements.

Lewis, Inc. faces a probable loss on a pending lawsuit where the amount of the loss is estimated to be $500,000. The journal entry to recognize the potential loss is:

Brock Enterprises has liabilities of $105 million and total assets of $350 million. Its debt ratio is 40.0%.

If the assets of a company increase by $55,000 during the year and its liabilities increase by $25,000 during the same year, then the change in equity of the company during the year must have been:

Snedeker Inc.’s most recent balance sheet reports total assets of $35,000,000 and total liabilities of $17,500,000. Management is considering issuing $5,000,000 of par value bonds (at par) with a maturity date of ten years and a contract rate of 7%. What effect, if any, would issuing the bonds have on the company’s debt-to-equity ratio?

Which of the following types of businesses might have an operating cycle longer than one year?

At year-end, a trial balance showed total credits exceeding total debits by $4,950. This difference could have been caused by:

In the partnership form of business, the owners are called stockholders.

At the end of the current year, Fleer Company reported total liabilities of $300,000 and total equity of $100,000. The company’s debt ratio on the last year-end was:

Karen Doran is paid on a monthly basis. For the month of January of the current year, he earned a total of $8,288. FICA tax for Social Security is 6.2% on the first $118,500 of earnings each calendar year and the FICA tax for Medicare is 1.45% of all earnings. The FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee’s pay. The amount of Federal Income Tax withheld from his earnings was $1,375.17. What is the amount of the employer’s payroll taxes expenses for this employee? (Round your intermediate calculations to two decimal places.)