Question 1

A contingent liability is:

Accepted Answer

A) Always of a specific amount. 
B) A potential obligation that depends on a future event arising from a past transaction or event. 
C) An obligation not requiring future payment. 
D) An obligation arising from the purchase of goods or services on credit. 
E) An obligation arising from a future event. 
A) Always of a specific amount. 
B) A potential obligation that depends on a future event arising from a past transaction or event. 
C) An obligation not requiring future payment. 
D) An obligation arising from the purchase of goods or services on credit. 
E) An obligation arising from a future event.

Question 2

The report that shows the pay period dates,hours worked,gross pay,deductions,and net pay of each employee for every pay period is the payroll register.

Accepted Answer

A) True 
 B)False

Question 3

Santa Barbara Express has 4 sales employees,each of whom earns $5,000 per month and is paid on the last working day of the month.Each employee's wages are subject to FICA social security taxes of 6.2% and Medicare taxes of 1.45% on all wages.Withholding for each employee also includes federal income tax of 16% and monthly medical insurance premiums of $110 for each employee.
a.Prepare the general journal entry to accrue the monthly sales salaries expense at January 31.
b.The employer payroll taxes for Santa Barbara Express include FICA taxes,federal unemployment taxes of 0.6% of the first $7,000 paid each employee,and state unemployment taxes of 4.0% of the first $7,000 paid to each employee.Prepare the journal entry to record the employer's payroll taxes at January 31 for Santa Barbara Express.(Assume that none of the employees has reached the unemployment limit of $7,000.)

Accepted Answer

The answer of Santa Barbara Express has 4 sales employees,each...

Question 4

What is a short-term note payable? Explain the accounting issues related to notes payable.

Accepted Answer

A short-term note payable is a written p

Question 5

Contingent liabilities are recorded or disclosed unless they are:

Accepted Answer

A) Probable and estimable. 
B) Remote. 
C) Reasonably possible. 
D) Probable and not estimable. 
E) Possible and estimable. 
A) Probable and estimable. 
B) Remote. 
C) Reasonably possible. 
D) Probable and not estimable. 
E) Possible and estimable.

Question 6

The difference between the amount borrowed and the amount repaid is referred to as ________.

Accepted Answer

The answer of The difference between the amount borrowed and...

Question 7

A company cannot have a liability if the amount of the obligation is unknown.

Accepted Answer

A) True 
 B)False

Question 8

Recording employee payroll deductions may involve:

Accepted Answer

A) Liabilities to the employer. 
B) Liabilities to federal and state governments. 
C) Expenses for state unemployment. 
D) Expenses for the gross wages and salaries. 
E) Expenses for the employer portion of any medical insurance. 
A) Liabilities to the employer. 
B) Liabilities to federal and state governments. 
C) Expenses for state unemployment. 
D) Expenses for the gross wages and salaries. 
E) Expenses for the employer portion of any medical insurance.

Question 9

Companies may use a special bank account solely for the purpose of paying employees,by depositing an amount equal to the total employees' net pay into the account each pay period and drawing the employees' payroll checks on the account.This account is a(n):

Accepted Answer

A) Federal depository bank account. 
B) Employee's Individual Earnings account. 
C) Employees' bank account. 
D) Payroll register account. 
E) Payroll bank account. 
A) Federal depository bank account. 
B) Employee's Individual Earnings account. 
C) Employees' bank account. 
D) Payroll register account. 
E) Payroll bank account.

Question 10

A company's income before interest expense and income taxes is $350,000 and its interest expense is $100,000.Its times interest earned ratio is:

Accepted Answer

A) 0.29 
B) 3.50 
C) 2.50 
D) 1.75 
E) 0.50 
A) 0.29 
B) 3.50 
C) 2.50 
D) 1.75 
E) 0.50

Question 11

The current FUTA tax rate is 0.6%,and the SUTA tax rate is 5.4%.Both taxes are applied to the first $7,000 of an employee's pay.Assume that an employee earned total wages of $2,900 in the current period and had cumulative pay for prior periods of $5,800.What is the amount of unemployment taxes the employer must pay on this employee's wages for the current period?

Accepted Answer

A) $420.00. 
B) $348.00. 
C) $72.00. 
D) $174.00. 
E) $0.00. 
A) $420.00. 
B) $348.00. 
C) $72.00. 
D) $174.00. 
E) $0.00.

Question 12

All of the following are employer payroll taxes except:

Accepted Answer

A) Social Security tax equal to that withheld from employees. 
B) Medicare tax equal to that withheld from employees. 
C) State unemployment tax. 
D) Federal unemployment tax. 
E) Federal income tax equal to that withheld from employees. 
A) Social Security tax equal to that withheld from employees. 
B) Medicare tax equal to that withheld from employees. 
C) State unemployment tax. 
D) Federal unemployment tax. 
E) Federal income tax equal to that withheld from employees.

Question 13

The employer should record deductions from employee pay as:

Accepted Answer

A) Employee receivables. 
B) Payroll taxes. 
C) Current liabilities. 
D) Wages payable. 
E) Employee payables. 
A) Employee receivables. 
B) Payroll taxes. 
C) Current liabilities. 
D) Wages payable. 
E) Employee payables.

Question 14

Vacation benefits is an example of a known liability.

Accepted Answer

A) True 
 B)False

Question 15

A table that shows the amount of federal income tax to be withheld from an employee's pay is the:

Accepted Answer

A) Form 941. 
B) Tax table. 
C) Wage bracket withholding table. 
D) W-2. 
E) W-4. 
A) Form 941. 
B) Tax table. 
C) Wage bracket withholding table. 
D) W-2. 
E) W-4.

Question 16

An employee earned $37,000 during the year working for an employer when the maximum limit for Social Security was $127,200.The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%.The employee's annual FICA taxes amount is:

Accepted Answer

A) $2,294.00. 
B) $536.50. 
C) $2,830.50. 
D) $1,757.50. 
E) $8,950.50. 
A) $2,294.00. 
B) $536.50. 
C) $2,830.50. 
D) $1,757.50. 
E) $8,950.50.

Question 17

A liability may exist even if there is uncertainty about whom to pay,when to pay,or how much to pay.

Accepted Answer

A) True 
 B)False

Question 18

An employee earned $43,300 working for an employer in the current year.The current rate for FICA Social Security is 6.2% payable on earnings up to $127,200 maximum per year and the rate for FICA Medicare 1.45%.The employer's total FICA payroll tax for this employee is:

Accepted Answer

A) $8,950.50. 
B) $5,638.05. 
C) $3,312.45. 
D) $2,684.60. 
E) $0,since the FICA tax is only deducted from an employee's pay. 
A) $8,950.50. 
B) $5,638.05. 
C) $3,312.45. 
D) $2,684.60. 
E) $0,since the FICA tax is only deducted from an employee's pay.

Question 19

If a company uses a special payroll bank account:

Accepted Answer

A) The company does not need to issue paychecks. 
B) The company draws one check for the entire payroll on the regular bank account and deposits it in the payroll bank account. 
C) The company must use a federal depository bank for the payroll bank account. 
D) There is no need for a payroll register. 
E) There is no need to issue W-2's. 
A) The company does not need to issue paychecks. 
B) The company draws one check for the entire payroll on the regular bank account and deposits it in the payroll bank account. 
C) The company must use a federal depository bank for the payroll bank account. 
D) There is no need for a payroll register. 
E) There is no need to issue W-2's.

Question 20

All of the following statements related to recording warranty expense are true except:

Accepted Answer

A) Recording estimated warranty expense complies with the full disclosure principle. 
B) Warranty expense should be recorded in the period when the warranty service is performed. 
C) Recording estimated warranty expense complies with the matching principle. 
D) The seller reports a warranty obligation as a liability. 
E) Warranty costs are probable and the amount can be estimated. 
A) Recording estimated warranty expense complies with the full disclosure principle. 
B) Warranty expense should be recorded in the period when the warranty service is performed. 
C) Recording estimated warranty expense complies with the matching principle. 
D) The seller reports a warranty obligation as a liability. 
E) Warranty costs are probable and the amount can be estimated.

A contingent liability is:

The report that shows the pay period dates,hours worked,gross pay,deductions,and net pay of each employee for every pay period is the payroll register.

What is a short-term note payable? Explain the accounting issues related to notes payable.

Contingent liabilities are recorded or disclosed unless they are:

The difference between the amount borrowed and the amount repaid is referred to as ________.

A company cannot have a liability if the amount of the obligation is unknown.

Recording employee payroll deductions may involve:

Companies may use a special bank account solely for the purpose of paying employees,by depositing an amount equal to the total employees' net pay into the account each pay period and drawing the employees' payroll checks on the account.This account is a(n):

A company's income before interest expense and income taxes is $350,000 and its interest expense is $100,000.Its times interest earned ratio is:

All of the following are employer payroll taxes except:

The employer should record deductions from employee pay as:

Vacation benefits is an example of a known liability.

A table that shows the amount of federal income tax to be withheld from an employee's pay is the:

An employee earned $37,000 during the year working for an employer when the maximum limit for Social Security was $127,200.The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%.The employee's annual FICA taxes amount is:

A liability may exist even if there is uncertainty about whom to pay,when to pay,or how much to pay.

An employee earned $43,300 working for an employer in the current year.The current rate for FICA Social Security is 6.2% payable on earnings up to $127,200 maximum per year and the rate for FICA Medicare 1.45%.The employer's total FICA payroll tax for this employee is:

If a company uses a special payroll bank account:

All of the following statements related to recording warranty expense are true except:

Introducing Financial Statements

Financial Statements and the Accounting System

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash,fraud,and Internal Control

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments

International Operations

Filters

Exam 9: Reporting and Analyzing Current Liabilities

A contingent liability is:

The report that shows the pay period dates,hours worked,gross pay,deductions,and net pay of each employee for every pay period is the payroll register.

What is a short-term note payable? Explain the accounting issues related to notes payable.

Contingent liabilities are recorded or disclosed unless they are:

The difference between the amount borrowed and the amount repaid is referred to as ________.

A company cannot have a liability if the amount of the obligation is unknown.

Recording employee payroll deductions may involve:

Companies may use a special bank account solely for the purpose of paying employees,by depositing an amount equal to the total employees' net pay into the account each pay period and drawing the employees' payroll checks on the account.This account is a(n):

A company's income before interest expense and income taxes is $350,000 and its interest expense is $100,000.Its times interest earned ratio is:

All of the following are employer payroll taxes except:

The employer should record deductions from employee pay as:

Vacation benefits is an example of a known liability.

A table that shows the amount of federal income tax to be withheld from an employee's pay is the:

An employee earned $37,000 during the year working for an employer when the maximum limit for Social Security was $127,200.The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%.The employee's annual FICA taxes amount is:

A liability may exist even if there is uncertainty about whom to pay,when to pay,or how much to pay.

An employee earned $43,300 working for an employer in the current year.The current rate for FICA Social Security is 6.2% payable on earnings up to $127,200 maximum per year and the rate for FICA Medicare 1.45%.The employer's total FICA payroll tax for this employee is:

If a company uses a special payroll bank account:

All of the following statements related to recording warranty expense are true except:

Introducing Financial Statements

Financial Statements and the Accounting System

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash,fraud,and Internal Control

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments

International Operations

Filters