Question 1

The accounts payable turnover ratio is calculated by dividing accounts payable by cash payments to suppliers.

Accepted Answer

A) True 
 B)False

Question 2

On April 1,2019,Wolf Company borrowed $5,000 on an 8% note payable.The maturity date of the note (and payment of all interest)is July 1,2020.The accounting period ends December 31.Assume no adjusting entries are made during the year.
Prepare the journal entry for each of the following dates:
A.April 1,2019.
B.December 31,2019.
C.July 1,2020.

Accepted Answer

The answer of On April 1,2019,Wolf Company borrowed $5,000 on...

Question 3

Which of the following describes an accrued liability?

Accepted Answer

A) It is an expense that has been both incurred and paid. 
B) It is an expense that has been incurred but not yet paid. 
C) It is an expense that has been prepaid but not yet consumed. 
D) It is a liability where the cash flow has taken place but the revenue has yet to be earned. 
A) It is an expense that has been both incurred and paid. 
B) It is an expense that has been incurred but not yet paid. 
C) It is an expense that has been prepaid but not yet consumed. 
D) It is a liability where the cash flow has taken place but the revenue has yet to be earned.

Question 4

The FICA (social security)tax is a matching tax with a portion paid by both the employer and the employee.

Accepted Answer

A) True 
 B)False

Question 5

The following is a partial list of account balances for Coen,Inc.as of December 31,2019
   Prepare the liabilities section of Coen Inc.'s classified balance sheet for December 31,2019.

Accepted Answer

The answer of The following is a partial list of...

Question 6

An annuity is a series of consecutive and unequal payments over time.

Accepted Answer

A) True 
 B)False

Question 7

With regard to reporting contingent liabilities on a balance sheet,financial statements prepared under International Financial Reporting Standards (IFRS)will:

Accepted Answer

A) Have fewer contingent liabilities accrued than under U.S.GAAP because the IFRS guideline for "probable" is a higher percentage than the U.S.GAAP guideline for "probable". 
B) Have more contingent liabilities accrued than under U.S.GAAP because the IFRS guideline for "probable" is a lower percentage than the U.S.GAAP guideline for "probable". 
C) Have more contingent liabilities accrued than under U.S.GAAP because IFRS requires all lawsuits,environmental problems,and product warranties that are reasonably estimable to be accrued while U.S.GAAP requires accrual only if losses are reasonably possible of being incurred. 
D) Have fewer contingent liabilities accrued than under U.S.GAAP because IFRS requires a more subjective evaluation of the probability of occurrence than does U.S.GAAP. 
A) Have fewer contingent liabilities accrued than under U.S.GAAP because the IFRS guideline for "probable" is a higher percentage than the U.S.GAAP guideline for "probable". 
B) Have more contingent liabilities accrued than under U.S.GAAP because the IFRS guideline for "probable" is a lower percentage than the U.S.GAAP guideline for "probable". 
C) Have more contingent liabilities accrued than under U.S.GAAP because IFRS requires all lawsuits,environmental problems,and product warranties that are reasonably estimable to be accrued while U.S.GAAP requires accrual only if losses are reasonably possible of being incurred. 
D) Have fewer contingent liabilities accrued than under U.S.GAAP because IFRS requires a more subjective evaluation of the probability of occurrence than does U.S.GAAP.

Question 8

When a liability is initially recorded,it is recorded at the future amount of all payments.

Accepted Answer

A) True 
 B)False

Question 9

SRJ Corporation entered into the following transactions: • The accrual of interest expense on a six-month note payable.
• Collected cash for services to be provided within the next six months.
• The reclassification of short-term debt to long-term debt.
-
Which of the transactions for SRJ Corporation resulted in an increase in working capital?

Accepted Answer

A) The accrual of interest expense. 
B) Collecting cash for services to be provided in the future. 
C) The reclassification of short-term debt to long-term debt. 
D) Both the reclassification of short-term debt to long-term debt and the collection of cash for future services. 
A) The accrual of interest expense. 
B) Collecting cash for services to be provided in the future. 
C) The reclassification of short-term debt to long-term debt. 
D) Both the reclassification of short-term debt to long-term debt and the collection of cash for future services.

Question 10

For the present value of a single amount,only one compounding period per year is permitted.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following statements incorrectly describes the accounts payable turnover ratio?

Accepted Answer

A) A high ratio indicates that suppliers are being paid in a timely manner. 
B) The ratio increases when inventory is sold on account regardless of the sales price. 
C) The ratio can be manipulated by aggressively paying off accounts payable at year-end. 
D) The ratio is not affected by the choice of inventory accounting methods. 
A) A high ratio indicates that suppliers are being paid in a timely manner. 
B) The ratio increases when inventory is sold on account regardless of the sales price. 
C) The ratio can be manipulated by aggressively paying off accounts payable at year-end. 
D) The ratio is not affected by the choice of inventory accounting methods.

Question 12

Operating leases are reported on the balance sheet at an amount equal to the present value of the future cash flows.

Accepted Answer

A) True 
 B)False

Question 13

Houston Company is involved in a lawsuit.In which of the following situations is only a note disclosure of the contingent liability reported within the financial statements?

Accepted Answer

A) When the loss is remote and the amount cannot be reasonably estimated. 
B) When the loss is probable and the amount can be reasonably estimated. 
C) When the loss is reasonably possible and the amount can be reasonably estimated. 
D) When the loss is remote and the amount can be reasonably estimated. 
A) When the loss is remote and the amount cannot be reasonably estimated. 
B) When the loss is probable and the amount can be reasonably estimated. 
C) When the loss is reasonably possible and the amount can be reasonably estimated. 
D) When the loss is remote and the amount can be reasonably estimated.

Question 14

Rusty Corporation purchased a rust-inhibiting machine by paying $50,000 cash on the purchase date and agreeing to pay $10,000 every three months during the next two years.The first payment is due three months after the purchase date.Rusty's incremental borrowing rate is 8%.(FV of $1,PV of $1,FVA of $1,and PVA of $1)(Use the appropriate factor(s)from the tables provided. ) 
-The liability reported on the balance sheet as of the purchase date,after the initial $50,000 payment was made,is closest to:

Accepted Answer

A) $123,255. 
B) $130,000. 
C) $80,000. 
D) $73,255. 
A) $123,255. 
B) $130,000. 
C) $80,000. 
D) $73,255.

Question 15

Phipps Company borrowed $25,000 cash on October 1,2019,and signed a nine-month,8% interest-bearing note payable with interest payable at maturity.The amount of interest expense to be reported during 2020 is which of the following?

Accepted Answer

A) $1,000. 
B) $300. 
C) $500. 
D) $750. 
A) $1,000. 
B) $300. 
C) $500. 
D) $750.

Question 16

Thomas Company borrowed $30,000 on March 1,2019.Thomas signed a 2-year 6% interest-bearing note.What is the adjustment amount to accrue interest on December 31,2020?

Accepted Answer

A) $1,800. 
B) $3,600. 
C) $300. 
D) $1,200. 
A) $1,800. 
B) $3,600. 
C) $300. 
D) $1,200.

Question 17

The following data were provided by the detailed payroll records of Mountain Corporation for the last week of March 2019,which will not be paid until April 5,2019:
   FICA taxes at a 7.65% rate (no employee had reached the maximum).
A.Prepare the March 31,2019 journal entry to record the payroll and the related employee deductions.
B.Prepare the March 31,2019 journal entry to record the employer's FICA payroll tax expense.
C.Calculate the total payroll-related liabilities at March 31,2019 using the results of requirements (A)and (B).

Accepted Answer

The answer of The following data were provided by the...

Question 18

Phipps Company borrowed $25,000 cash on October 1,2019,and signed a nine-month,8% interest-bearing note payable with interest payable at maturity.Assuming that adjusting entries have not been made during the year,the amount of accrued interest payable to be reported on the December 31,2019 balance sheet is which of the following?

Accepted Answer

A) $250. 
B) $300. 
C) $500. 
D) $750. 
A) $250. 
B) $300. 
C) $500. 
D) $750.

Question 19

Rae Company purchased a new vehicle by paying $10,000 cash on the purchase date and agreeing to pay $3,000 every three months during the next five years.The first payment is due three months after the purchase date.Rae's incremental borrowing rate is 12%.(FV of $1,PV of $1,FVA of $1,and PVA of $1)(Use the appropriate factor(s)from the tables provided. )
- The liability reported on the balance sheet as of the purchase date,after the initial $10,000 payment was made,is closest to:

Accepted Answer

A) $44,632. 
B) $50,000. 
C) $54,633. 
D) $60,000. 
A) $44,632. 
B) $50,000. 
C) $54,633. 
D) $60,000.

Question 20

Wages expense is an example of an accrued liability account.

Accepted Answer

A) True 
 B)False

The accounts payable turnover ratio is calculated by dividing accounts payable by cash payments to suppliers.

Which of the following describes an accrued liability?

The FICA (social security)tax is a matching tax with a portion paid by both the employer and the employee.

The following is a partial list of account balances for Coen,Inc.as of December 31,2019 Prepare the liabilities section of Coen Inc.'s classified balance sheet for December 31,2019.

An annuity is a series of consecutive and unequal payments over time.

With regard to reporting contingent liabilities on a balance sheet,financial statements prepared under International Financial Reporting Standards (IFRS)will:

When a liability is initially recorded,it is recorded at the future amount of all payments.

For the present value of a single amount,only one compounding period per year is permitted.

Which of the following statements incorrectly describes the accounts payable turnover ratio?

Operating leases are reported on the balance sheet at an amount equal to the present value of the future cash flows.

Houston Company is involved in a lawsuit.In which of the following situations is only a note disclosure of the contingent liability reported within the financial statements?

Phipps Company borrowed $25,000 cash on October 1,2019,and signed a nine-month,8% interest-bearing note payable with interest payable at maturity.The amount of interest expense to be reported during 2020 is which of the following?

Thomas Company borrowed $30,000 on March 1,2019.Thomas signed a 2-year 6% interest-bearing note.What is the adjustment amount to accrue interest on December 31,2020?

Wages expense is an example of an accrued liability account.

Financial Statements and Business Decisions

Investing and Financing Decisions and the Accounting System

Operating Decisions and the Accounting System

Adjustments,financial Statements,and the Quality of Earnings

Communicating and Interpreting Accounting Information

Reporting and Interpreting Sales Revenue,receivables,and Cash

Reporting and Interpreting Cost of Goods Sold and Inventory

Reporting and Interpreting Property,plant,and Equipment;intangibles;and Natural Resources

Reporting and Interpreting Bond Securities

Reporting and Interpreting Stockholders Equity

Statement of Cash Flows

Analyzing Financial Statements

Reporting and Interpreting Investments in Other Corporations

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Exam 9: Reporting and Interpreting Liabilities

The accounts payable turnover ratio is calculated by dividing accounts payable by cash payments to suppliers.

Which of the following describes an accrued liability?

The FICA (social security)tax is a matching tax with a portion paid by both the employer and the employee.

The following is a partial list of account balances for Coen,Inc.as of December 31,2019 Prepare the liabilities section of Coen Inc.'s classified balance sheet for December 31,2019.

An annuity is a series of consecutive and unequal payments over time.

With regard to reporting contingent liabilities on a balance sheet,financial statements prepared under International Financial Reporting Standards (IFRS)will:

When a liability is initially recorded,it is recorded at the future amount of all payments.

For the present value of a single amount,only one compounding period per year is permitted.

Which of the following statements incorrectly describes the accounts payable turnover ratio?

Operating leases are reported on the balance sheet at an amount equal to the present value of the future cash flows.

Houston Company is involved in a lawsuit.In which of the following situations is only a note disclosure of the contingent liability reported within the financial statements?

Phipps Company borrowed $25,000 cash on October 1,2019,and signed a nine-month,8% interest-bearing note payable with interest payable at maturity.The amount of interest expense to be reported during 2020 is which of the following?

Thomas Company borrowed $30,000 on March 1,2019.Thomas signed a 2-year 6% interest-bearing note.What is the adjustment amount to accrue interest on December 31,2020?

Wages expense is an example of an accrued liability account.

Financial Statements and Business Decisions

Investing and Financing Decisions and the Accounting System

Operating Decisions and the Accounting System

Adjustments,financial Statements,and the Quality of Earnings

Communicating and Interpreting Accounting Information

Reporting and Interpreting Sales Revenue,receivables,and Cash

Reporting and Interpreting Cost of Goods Sold and Inventory

Reporting and Interpreting Property,plant,and Equipment;intangibles;and Natural Resources

Reporting and Interpreting Bond Securities

Reporting and Interpreting Stockholders Equity

Statement of Cash Flows

Analyzing Financial Statements

Reporting and Interpreting Investments in Other Corporations

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