Identify the statement below that is true.

A $15 credit to Sales was posted as a $150 credit. By what amount is the Sales account in error?

Assuming prepaid expenses are originally recorded in balance sheet accounts, the adjusting entry to record use of a prepaid expense is:

Joey’s Bike Shop has total assets of $425 million. Its total liabilities are $110 million. Its equity is $315 million. Calculate the debt ratio.

Donavan, Inc.’s most recent balance sheet reports total assets of $42,000,000, total liabilities of $16,000,000 and stockholders’ equity of $26,000,000. Management is considering using $3,000,000 of excess cash to prepay $3,000,000 of outstanding bonds. What effect, if any, would prepaying the bonds have on the company’s debt-to-equity ratio?

Generally, the lower the risk, the higher the return that can be expected.

Temporary accounts include all of the following except:

The business entity assumption means that a business is accounted for separately from other business entities, including its owner or owners.

Montclair uses the allowance method to account for uncollectible accounts. Its year-end unadjusted trial balance shows Accounts Receivable of $104,500, allowance for doubtful accounts of $665 (credit) and sales of $925,000. If uncollectible accounts are estimated to be 0.5% of sales, what is the amount of the bad debts expense adjusting entry?

Asian Day Spa purchased $7,800 in plumbing components from Kraft Suppliers. Asian Day Spa signed a 60-day, 10% promissory note for $7,800. If the note is dishonored, what is the amount due on the note? (Use 360 days a year.)