Question 1

Fees accepted in advance from a client

Accepted Answer

A) are recorded as earned revenues on the income statement. 
B) increase income. 
C) are recorded as liabilities. 
D) do not increase assets. 
E) none of these. 
A) are recorded as earned revenues on the income statement. 
B) increase income. 
C) are recorded as liabilities. 
D) do not increase assets. 
E) none of these.

Question 2

Provincial sales tax payable:

Accepted Answer

A) Is an estimated liability 
B) Is a contingent liability 
C) Is a current liability for retailers 
D) Is a business expense 
E) All of these 
A) Is an estimated liability 
B) Is a contingent liability 
C) Is a current liability for retailers 
D) Is a business expense 
E) All of these

Question 3

Which of the following items below is recorded as an estimate when initially recognized?

Accepted Answer

A) CPP payable 
B) Unearned revenue 
C) Warranty obligation 
D) Notes payable 
A) CPP payable 
B) Unearned revenue 
C) Warranty obligation 
D) Notes payable

Question 4

On August 1,Droid Co.borrowed $80,000 from Simpli Financial.The loan had an interest rate of 7% and was due in 60 days.Prepare the journal entry for Droid Co.to record the note.

Accepted Answer

The answer of On August 1,Droid Co.borrowed $80,000 from Simpli...

Question 5

A gift card is an example of a contingent liability.

Accepted Answer

A) True 
 B)False

Question 6

Vella Physio Company is located in Ponoka,Alberta and is a retailer of physio supplies.Beginning inventory is $20,000,and Vella uses the perpetual inventory system.Complete the journal entries on the following dates,including 5% GST as applicable.

Accepted Answer

The answer of Vella Physio Company is located in Ponoka,Alberta...

Question 7

Obligations due to be paid within one year or the company's operating cycle,whichever is longer,are

Accepted Answer

A) current assets. 
B) revenues. 
C) current liabilities. 
D) operating cycle liabilities. 
E) non-current liabilities. 
A) current assets. 
B) revenues. 
C) current liabilities. 
D) operating cycle liabilities. 
E) non-current liabilities.

Question 8

An estimated liability

Accepted Answer

A) Is an unknown liability of a certain amount 
B) Can be the result of a lawsuit 
C) Is a liability that may occur if a future event occurs 
D) Is a known obligation of an uncertain amount 
E) None of these 
A) Is an unknown liability of a certain amount 
B) Can be the result of a lawsuit 
C) Is a liability that may occur if a future event occurs 
D) Is a known obligation of an uncertain amount 
E) None of these

Question 9

A liability is a future payment of assets or services that a company is currently obligated to make as a result of past transactions or events.

Accepted Answer

A) True 
 B)False

Question 10

Obligations not expected to be paid within one year are reported as

Accepted Answer

A) Current assets 
B) Current liabilities 
C) Long term liabilities 
D) Operating cycle liabilities 
E) Revenues 
A) Current assets 
B) Current liabilities 
C) Long term liabilities 
D) Operating cycle liabilities 
E) Revenues

Question 11

A contingent liability

Accepted Answer

A) Is a liability of a specific amount 
B) Is a potential obligation that depends on a future event arising out of a past transaction 
C) Is an obligation not requiring immediate payment 
D) Is an obligation arising from the purchase of goods or services on credit 
E) None of these 
A) Is a liability of a specific amount 
B) Is a potential obligation that depends on a future event arising out of a past transaction 
C) Is an obligation not requiring immediate payment 
D) Is an obligation arising from the purchase of goods or services on credit 
E) None of these

Question 12

On June 5,BB Company borrowed $120,000 from AH Bank.The loan had an interest rate of 10% and was due in 90 days.BB Company's fiscal year-end is December 31.Prepare the journal entry to record the receipt of the cash.

Accepted Answer

The answer of On June 5,BB Company borrowed $120,000 from...

Question 13

Long-term liabilities are obligations of a company requiring payment within one year.

Accepted Answer

A) True 
 B)False

Question 14

On July 16,Freedom Flight gave a 120-day note payable to Slick and Slide Co.,instead of cash payment of an overdue account.The amount of the note was $75,000 at an interest rate of 14%.Prepare the journal entry and determine the maturity date for Freedom Flight to record payment of the note.

Accepted Answer

The answer of On July 16,Freedom Flight gave a 120-day...

Question 15

Major Company borrowed $12,000 by signing an 8% interest-bearing 45-day note payable to replace an overdue accounts payable.To record this transaction,Major Company should prepare a journal entry that includes a

Accepted Answer

A) credit to Accounts Payable for $12,000. 
B) credit to Notes Payable for $12,000. 
C) debit to Cash for $12,000. 
D) debit to Notes Payable for $12,000. 
E) debit to Cash for $12,300. 
A) credit to Accounts Payable for $12,000. 
B) credit to Notes Payable for $12,000. 
C) debit to Cash for $12,000. 
D) debit to Notes Payable for $12,000. 
E) debit to Cash for $12,300.

Question 16

Gross pay is

Accepted Answer

A) Take-home pay 
B) Deductions withheld by an employer 
C) Salaries after taxes are deducted 
D) Total compensation earned by an employee 
E) The amount of the pay cheque 
A) Take-home pay 
B) Deductions withheld by an employer 
C) Salaries after taxes are deducted 
D) Total compensation earned by an employee 
E) The amount of the pay cheque

Question 17

Liabilities

Accepted Answer

A) Can be reliably estimated 
B) Must be certain 
C) Must be for a specific amount 
D) Must have a date for payment 
E) Must have a known payee 
A) Can be reliably estimated 
B) Must be certain 
C) Must be for a specific amount 
D) Must have a date for payment 
E) Must have a known payee

Question 18

A contingent liability exists when a potential liability that depends on a future event arising out of a past transaction liability is either not probable or it cannot be reliably estimated.

Accepted Answer

A) True 
 B)False

Question 19

A long-term liability can have a current component.

Accepted Answer

A) True 
 B)False

Question 20

All expected future payments are liabilities.

Accepted Answer

A) True 
 B)False

Fees accepted in advance from a client

Provincial sales tax payable:

Which of the following items below is recorded as an estimate when initially recognized?

On August 1,Droid Co.borrowed $80,000 from Simpli Financial.The loan had an interest rate of 7% and was due in 60 days.Prepare the journal entry for Droid Co.to record the note.

A gift card is an example of a contingent liability.

Vella Physio Company is located in Ponoka,Alberta and is a retailer of physio supplies.Beginning inventory is $20,000,and Vella uses the perpetual inventory system.Complete the journal entries on the following dates,including 5% GST as applicable.

Obligations due to be paid within one year or the company's operating cycle,whichever is longer,are

An estimated liability

A liability is a future payment of assets or services that a company is currently obligated to make as a result of past transactions or events.

Obligations not expected to be paid within one year are reported as

A contingent liability

On June 5,BB Company borrowed $120,000 from AH Bank.The loan had an interest rate of 10% and was due in 90 days.BB Company's fiscal year-end is December 31.Prepare the journal entry to record the receipt of the cash.

Long-term liabilities are obligations of a company requiring payment within one year.

On July 16,Freedom Flight gave a 120-day note payable to Slick and Slide Co.,instead of cash payment of an overdue account.The amount of the note was $75,000 at an interest rate of 14%.Prepare the journal entry and determine the maturity date for Freedom Flight to record payment of the note.

Major Company borrowed $12,000 by signing an 8% interest-bearing 45-day note payable to replace an overdue accounts payable.To record this transaction,Major Company should prepare a journal entry that includes a

Gross pay is

Liabilities

A contingent liability exists when a potential liability that depends on a future event arising out of a past transaction liability is either not probable or it cannot be reliably estimated.

A long-term liability can have a current component.

All expected future payments are liabilities.

Property, plant and Equipment Intangibles

Partnerships

Organization and Operation of Corporations

Corporate Reporting: Income, earnings Per Share, and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

Filters

Exam 2: Current Liabilities

Fees accepted in advance from a client

Provincial sales tax payable:

Which of the following items below is recorded as an estimate when initially recognized?

On August 1,Droid Co.borrowed $80,000 from Simpli Financial.The loan had an interest rate of 7% and was due in 60 days.Prepare the journal entry for Droid Co.to record the note.

A gift card is an example of a contingent liability.

Vella Physio Company is located in Ponoka,Alberta and is a retailer of physio supplies.Beginning inventory is $20,000,and Vella uses the perpetual inventory system.Complete the journal entries on the following dates,including 5% GST as applicable.

Obligations due to be paid within one year or the company's operating cycle,whichever is longer,are

An estimated liability

A liability is a future payment of assets or services that a company is currently obligated to make as a result of past transactions or events.

Obligations not expected to be paid within one year are reported as

A contingent liability

On June 5,BB Company borrowed $120,000 from AH Bank.The loan had an interest rate of 10% and was due in 90 days.BB Company's fiscal year-end is December 31.Prepare the journal entry to record the receipt of the cash.

Long-term liabilities are obligations of a company requiring payment within one year.

On July 16,Freedom Flight gave a 120-day note payable to Slick and Slide Co.,instead of cash payment of an overdue account.The amount of the note was $75,000 at an interest rate of 14%.Prepare the journal entry and determine the maturity date for Freedom Flight to record payment of the note.

Major Company borrowed $12,000 by signing an 8% interest-bearing 45-day note payable to replace an overdue accounts payable.To record this transaction,Major Company should prepare a journal entry that includes a

Gross pay is

Liabilities

A contingent liability exists when a potential liability that depends on a future event arising out of a past transaction liability is either not probable or it cannot be reliably estimated.

A long-term liability can have a current component.

All expected future payments are liabilities.

Property, plant and Equipment Intangibles

Partnerships

Organization and Operation of Corporations

Corporate Reporting: Income, earnings Per Share, and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

Filters