McMichael Exhibits Inc

question 6

Multiple Choice

McMichael Exhibits Inc.received its annual property tax bill for $26,200 in January.It was paid when due on March 31.McMichael Exhibits year end is Dec 31.The Dec 31 balances should be

• A)$6,550 for Prepaid Property Tax; $19,650 for Property Tax Expense.
• B)$0 for Prepaid Property Tax; $0 for Property Tax Payable.
• C)$6,550 for Prepaid Property Tax; $6,550 for Property Tax Payable.
• D)$2,183 for Prepaid Property Tax; $24,017 for Property Tax Expense.

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Definitions:

Cash Sales

Transactions in which goods or services are exchanged for immediate payment.

Sales Budget

An estimate of the expected total sales revenue and selling expenses of a company within a specified future period.

Credit Sales

Transactions that allow the buyer to purchase goods or services on credit, whereby payment is deferred to a future date.

Beginning Cash Balance

The amount of cash available at the start of a given period, often used as a reference point for cash flow analysis.