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Which one of the following would constitute a highly inflationary economy when determining the functional currency of a foreign entity?

(A)20% inflation for each of the past 5 years.

(B)30% inflation for each of the past 3 years.

(C)35% inflation for each of the past 3 years.

(D)20%, 35%, and 40% inflation, respectively, for each of the past 3 years.

The Correct Answer
Explanation

Bart's Brewskies saw sales of $50,000 in December-primarily due to New Year's Eve celebrations. Bart determined that 30% of his sales are paid in cash, while the rest are billed for their brewskies. Of the money owed, 40% is paid December, while the remaining is paid the following month. What is the increase of Accounts Receivable on New Year's Eve?

(A)$21,000 (B)$14,000 (C)$15,000 (D)$35,000 (E)$50,000

Correct Answer: A

Which of the following is subtracted from net sales to determine gross profit?

(A)Mark one answer: (B)Cost of goods sold (C)Expenses (D)Both cost of goods sold and expenses (E)Cost of goods sold, expenses, and taxes (F)Taxes

Correct Answer: A

If a corporation issues a 10-year $100,000 8% bond, what is the total that the issuing corporation pays to the bondholder over the next 10 years? Mark one answer:

(A)$80,000 (B)$140,000 (C)$180,000 (D)$100,000 (E)$200,000

Correct Answer: C

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