Question 1

The journal entry to record the issuance of a note for the purpose of converting an existing account payable would be

Accepted Answer

A)  debit Cash; credit Accounts Payable 
B)  debit Accounts Payable; credit Cash 
C)  debit Cash; credit Notes Payable 
D)  debit Accounts Payable; credit Notes Payable 
A)  debit Cash; credit Accounts Payable 
B)  debit Accounts Payable; credit Cash 
C)  debit Cash; credit Notes Payable 
D)  debit Accounts Payable; credit Notes Payable

Question 2

Match the following terms or phrases in a-g) with the explanations in 1-8. Terms or phrases may be used more than once.
-Remote contingent liability

Accepted Answer

A) Current ratio 
B) Working capital 
C) Quick assets 
D) Quick ratio 
E) Record an accrual and disclose in the notes to the financial statements
F)Disclose only in notes to financial statements
G)No disclosure needed in notes to financial statements 
A) Current ratio 
B) Working capital 
C) Quick assets 
D) Quick ratio 
E) Record an accrual and disclose in the notes to the financial statements
F)Disclose only in notes to financial statements
G)No disclosure needed in notes to financial statements

Question 3

Each year there is a ceiling for the amount that is subject to all of the following except

Accepted Answer

A)  social security tax 
B)  federal income tax 
C)  federal unemployment tax 
D)  state unemployment tax 
A)  social security tax 
B)  federal income tax 
C)  federal unemployment tax 
D)  state unemployment tax

Question 4

When a borrower receives the face amount of a discounted note less the discount, the amount is known as

Accepted Answer

A)  the note proceeds 
B)  the note discount 
C)  the note deferred interest 
D)  the note principal 
A)  the note proceeds 
B)  the note discount 
C)  the note deferred interest 
D)  the note principal

Question 5

On June 8, Smith Technologies issued a $75,000, 6%, 140-day note payable to Johnson Company. What is the due date of the note?

Accepted Answer

A)  October 28 
B)  October 27 
C)  October 26 
D)  October 25 
A)  October 28 
B)  October 27 
C)  October 26 
D)  October 25

Question 6

Roseland Design borrowed $700,000 on a 90-day note from CorpOne Funding Company. CorpOne discounts the note at 8%. Assume a 360-day year is used for interest calculations.)a) Journalize Roseland's entries to record:
a. The issuance of the note.
a. The receipt of the note.
b. The payment of the note at maturity.
b) Journalize CorpOne's entries to record:
b. The receipt of the payment of the note at maturity.

Accepted Answer

a) a. Cash 686,000
Interest Expense 14,0

Question 7

Journalize the following transactions for Riley Corporation:
Dec. 31
The accrued product warranty expense for the year is estimated to be 2.5% of sales. Sales for the year totaled $8,850,000.
31
The accrued vacation pay for the year is estimated to be $75,000.
31
Paid First Insurance Co. $55,000 as fund trustee for the pension plan. The annual pension cost is $87,000.

Accepted Answer

Dec. 31 Product Warranty Expense 221,250

Question 8

Which of the following is the most desirable quick ratio?

Accepted Answer

A)  1.20 
B)  1.00 
C)  0.95 
D)  0.50 
A)  1.20 
B)  1.00 
C)  0.95 
D)  0.50

Question 9

The amount of money a borrower receives from the lender is called the discount rate.

Accepted Answer

A) True 
 B)False

Question 10

During September, Excom sold 100 radios for $50 each and provided a two-year warranty with each unit. Each radio cost Excom $30 to produce. If 5% of the goods sold typically need to be replaced over the warranty period and one is actually replaced during September, for what amount in September would Excom debit Product Warranty Expense?

Accepted Answer

A)  $50 
B)  $150 
C)  $30 
D)  $120 
A)  $50 
B)  $150 
C)  $30 
D)  $120

Question 11

On May 18, Rodriguez Co. issued an $84,000, 6%, 120-day note payable on an overdue account payable to Wilson Company. Assume that the fiscal year of Rodriguez ends on June 30. Which of the following relationships is true?

Accepted Answer

A)  Rodriguez is the creditor and credits Accounts Receivable 
B)  Wilson is the creditor and debits Accounts Receivable 
C)  Wilson is the borrower and credits Accounts Payable 
D)  Rodriguez is the borrower and debits Accounts Payable 
A)  Rodriguez is the creditor and credits Accounts Receivable 
B)  Wilson is the creditor and debits Accounts Receivable 
C)  Wilson is the borrower and credits Accounts Payable 
D)  Rodriguez is the borrower and debits Accounts Payable

Question 12

Match each payroll item that follows to the one item a-f) that best describes its characteristics.
-FICA - Social security

Accepted Answer

A) Amount is limited, withheld from employee only 
B) Amount is limited, withheld from employee and matched by employer 
C) Amount is limited, paid by employer only 
D) Amount is not limited, withheld from employee only 
E) Amount is not limited, withheld from employee and matched by employer
F)Amount is not limited, paid by employer only 
A) Amount is limited, withheld from employee only 
B) Amount is limited, withheld from employee and matched by employer 
C) Amount is limited, paid by employer only 
D) Amount is not limited, withheld from employee only 
E) Amount is not limited, withheld from employee and matched by employer
F)Amount is not limited, paid by employer only

Question 13

According to a summary of the payroll of Scotland Company, $450,000 was subject to the 6.0% social security tax and $500,000 was subject to the 1.5% Medicare tax. Federal income tax withheld was $98,000. Also, $15,000 was subject to state 4.2%) and federal 0.8%) unemployment taxes. The journal entry to record accrued salaries would include a

Accepted Answer

A)  debit to Salary Payable of $450,000 
B)  credit to Salary Payable of $500,000 
C)  debit to Salary Expense of $500,000 
D)  credit to Salary Expense of $450,000 
A)  debit to Salary Payable of $450,000 
B)  credit to Salary Payable of $500,000 
C)  debit to Salary Expense of $500,000 
D)  credit to Salary Expense of $450,000

Question 14

Most employers are levied a tax on payrolls for

Accepted Answer

A)  sales tax 
B)  medical insurance premiums 
C)  federal unemployment compensation tax 
D)  union dues 
A)  sales tax 
B)  medical insurance premiums 
C)  federal unemployment compensation tax 
D)  union dues

Question 15

On January 5, Thomas Company, a calendar-year company, issued $1,000,000 of notes payable, of which $250,000 is due on January 1 each of the next four years. The proper balance sheet presentation on December 31 is

Accepted Answer

A)  Current Liabilities, $1,000,000 
B)  Current Liabilities, $250,000; Long-Term Debt, $750,000 
C)  Long-Term Debt, $1,000,000 
D)  Current Liabilities, $750,000; Long-Term Debt, $250,000 
A)  Current Liabilities, $1,000,000 
B)  Current Liabilities, $250,000; Long-Term Debt, $750,000 
C)  Long-Term Debt, $1,000,000 
D)  Current Liabilities, $750,000; Long-Term Debt, $250,000

Question 16

The journal entry to record the cost of warranty repairs that were incurred during the current period, but related to sales made in prior years, includes a debit to Warranty Expense.

Accepted Answer

A) True 
 B)False

Question 17

A pension plan that requires the employer to make annual pension contributions, with no promise to employees regarding future pension payments, is termed

Accepted Answer

A)  funded 
B)  unfunded 
C)  defined benefit 
D)  defined contribution 
A)  funded 
B)  unfunded 
C)  defined benefit 
D)  defined contribution

Question 18

Match the following terms or phrases in a-g) with the explanations in 1-8. Terms or phrases may be used more than once.
-Probable likelihood and estimable liability

Accepted Answer

A) Current ratio 
B) Working capital 
C) Quick assets 
D) Quick ratio 
E) Record an accrual and disclose in the notes to the financial statements
F)Disclose only in notes to financial statements
G)No disclosure needed in notes to financial statements 
A) Current ratio 
B) Working capital 
C) Quick assets 
D) Quick ratio 
E) Record an accrual and disclose in the notes to the financial statements
F)Disclose only in notes to financial statements
G)No disclosure needed in notes to financial statements

Question 19

The payroll register is a multicolumn form used to assemble the payroll-related data for all employees.

Accepted Answer

A) True 
 B)False

Question 20

Martinez Co. borrowed $50,000 on March 1 of the current year by signing a 60­day, 9%, interest-bearing note. Assuming a 360-day year, when the note is paid on April 30, the entry to record the payment should include a

Accepted Answer

A)  debit to Interest Payable for $750 
B)  debit to Interest Expense for $750 
C)  credit to Cash for $50,000 
D)  credit to Cash for $54,500 
A)  debit to Interest Payable for $750 
B)  debit to Interest Expense for $750 
C)  credit to Cash for $50,000 
D)  credit to Cash for $54,500

Exam 10: Current Liabilities and Payroll

The journal entry to record the issuance of a note for the purpose of converting an existing account payable would be

Match the following terms or phrases in a-g) with the explanations in 1-8. Terms or phrases may be used more than once. -Remote contingent liability

Each year there is a ceiling for the amount that is subject to all of the following except

When a borrower receives the face amount of a discounted note less the discount, the amount is known as

On June 8, Smith Technologies issued a $75,000, 6%, 140-day note payable to Johnson Company. What is the due date of the note?

Which of the following is the most desirable quick ratio?

The amount of money a borrower receives from the lender is called the discount rate.

On May 18, Rodriguez Co. issued an $84,000, 6%, 120-day note payable on an overdue account payable to Wilson Company. Assume that the fiscal year of Rodriguez ends on June 30. Which of the following relationships is true?

Match each payroll item that follows to the one item a-f) that best describes its characteristics. -FICA - Social security

Most employers are levied a tax on payrolls for

On January 5, Thomas Company, a calendar-year company, issued $1,000,000 of notes payable, of which $250,000 is due on January 1 each of the next four years. The proper balance sheet presentation on December 31 is

The journal entry to record the cost of warranty repairs that were incurred during the current period, but related to sales made in prior years, includes a debit to Warranty Expense.

A pension plan that requires the employer to make annual pension contributions, with no promise to employees regarding future pension payments, is termed

Match the following terms or phrases in a-g) with the explanations in 1-8. Terms or phrases may be used more than once. -Probable likelihood and estimable liability

The payroll register is a multicolumn form used to assemble the payroll-related data for all employees.

Martinez Co. borrowed $50,000 on March 1 of the current year by signing a 60­day, 9%, interest-bearing note. Assuming a 360-day year, when the note is paid on April 30, the entry to record the payment should include a

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Lean Principles, Lean Accounting, and Activity Analysis

Filters

Martinez Co. borrowed $50,000 on March 1 of the current year by signing a 60day, 9%, interest-bearing note. Assuming a 360-day year, when the note is paid on April 30, the entry to record the payment should include a