Question 1

Assume that a company has a cash ratio of .45. Recording the estimated warranties expense on the period's sales would cause the cash ratio to

Accepted Answer

A) decrease. 
B) increase. 
C) be unchanged since the effects offset one another. 
D) be unchanged since it has no impact on any current asset or liability accounts. 
A) decrease. 
B) increase. 
C) be unchanged since the effects offset one another. 
D) be unchanged since it has no impact on any current asset or liability accounts.

Question 2

The amount of a current liability reported on the balance sheet for interest payable includes

Accepted Answer

A) all interest to be paid within one year into the future related to amounts borrowed in past transactions. 
B) all interest to be paid in the future related to amounts borrowed in past transactions. 
C) all interest currently owed related to amounts borrowed in past transactions. 
D) all interest paid-to-date related to amounts borrowed in past transactions. 
A) all interest to be paid within one year into the future related to amounts borrowed in past transactions. 
B) all interest to be paid in the future related to amounts borrowed in past transactions. 
C) all interest currently owed related to amounts borrowed in past transactions. 
D) all interest paid-to-date related to amounts borrowed in past transactions.

Question 3

A retail company issues numerous discount coupons throughout the year. A balance in the estimated liability account indicates

Accepted Answer

A) that an error has been made in posting. 
B) the amount of coupons that are expected to be redeemed in the future. 
C) the amount of coupons already redeemed. 
D) that more coupons were redeemed than estimated. 
A) that an error has been made in posting. 
B) the amount of coupons that are expected to be redeemed in the future. 
C) the amount of coupons already redeemed. 
D) that more coupons were redeemed than estimated.

Question 4

Interest on a note payable can be calculated by multiplying the amount owed by the interest rate by the fraction of year that represents the time elapsed since borrowing.

Accepted Answer

A) True 
 B)False

Question 5

Match each of the following current liabilities with its meaning.
-Amounts owed for purchases on credit.

Accepted Answer

A) Account payable 
B) Note payable 
C) Wages payable 
D) Interest payable 
E) Sales taxes payable
F)FICA taxes payable
G)Unemployment taxes payable
H)Unearned sales revenues
I)Estimated warranty liability 
A) Account payable 
B) Note payable 
C) Wages payable 
D) Interest payable 
E) Sales taxes payable
F)FICA taxes payable
G)Unemployment taxes payable
H)Unearned sales revenues
I)Estimated warranty liability

Question 6

Match each of the following current liabilities with its meaning.
-Amounts funded by companies to provide benefits to fired workers.

Accepted Answer

A) Account payable 
B) Note payable 
C) Wages payable 
D) Interest payable 
E) Sales taxes payable
F)FICA taxes payable
G)Unemployment taxes payable
H)Unearned sales revenues
I)Estimated warranty liability 
A) Account payable 
B) Note payable 
C) Wages payable 
D) Interest payable 
E) Sales taxes payable
F)FICA taxes payable
G)Unemployment taxes payable
H)Unearned sales revenues
I)Estimated warranty liability

Question 7

Match each of the following current liabilities with its meaning.
-Social security and medicare taxes owed.

Accepted Answer

A) Account payable 
B) Note payable 
C) Wages payable 
D) Interest payable 
E) Sales taxes payable
F)FICA taxes payable
G)Unemployment taxes payable
H)Unearned sales revenues
I)Estimated warranty liability 
A) Account payable 
B) Note payable 
C) Wages payable 
D) Interest payable 
E) Sales taxes payable
F)FICA taxes payable
G)Unemployment taxes payable
H)Unearned sales revenues
I)Estimated warranty liability

Question 8

Gainesville Truck Center
This company has a weekly payroll of $10,000 for its employees who work Monday through Friday. Federal and state income taxes are withheld in the amounts of $1,700 and $400, respectively, and FICA taxes are withheld at a mandatory rate of 7.65% (6.2% for Social Security and 1.45% for Medicare). In addition, the federal and state unemployment taxes are applied at rates of 2% and 5%, respectively. The company's year-end is December 31.
-Refer to the information for Gainesville Truck Center. Which of the following statements is true regarding the entry to record wages and the related liabilities?

Accepted Answer

A) FICA tax expense will be debited in the amount of $765. 
B) Social security tax payable will be debited in the amount of $620. 
C) Medicare tax payable will be credited in the amount of $145. 
D) Federal income taxes payable will be credited in the amount of $2,100. 
A) FICA tax expense will be debited in the amount of $765. 
B) Social security tax payable will be debited in the amount of $620. 
C) Medicare tax payable will be credited in the amount of $145. 
D) Federal income taxes payable will be credited in the amount of $2,100.

Question 9

There are some liabilities, such as income taxes payable and the estimated warranty liability, for which the amounts must be estimated so they can be recorded in the same period as the related revenues. Failure to record these amounts in the same period as the related revenues is a violation of the

Accepted Answer

A) concept of historical cost. 
B) going concern assumption. 
C) limitation of materiality. 
D) expense recognition principle. 
A) concept of historical cost. 
B) going concern assumption. 
C) limitation of materiality. 
D) expense recognition principle.

Question 10

Gainesville Truck Center
This company has a weekly payroll of $10,000 for its employees who work Monday through Friday. Federal and state income taxes are withheld in the amounts of $1,700 and $400, respectively, and FICA taxes are withheld at a mandatory rate of 7.65% (6.2% for Social Security and 1.45% for Medicare). In addition, the federal and state unemployment taxes are applied at rates of 2% and 5%, respectively. The company's year-end is December 31.
-Refer to Gainesville Truck Center. When the company journal entry is recorded for the payment of these wages and related liabilities, which of the following statements is true regarding the impact on the accounting equation?

Accepted Answer

A) Both assets and liabilities will decrease. 
B) Assets, liabilities, and stockholders' equity will all decrease. 
C) Assets and stockholders' equity will decrease, while liabilities will increase. 
D) Both assets and liabilities will increase. 
A) Both assets and liabilities will decrease. 
B) Assets, liabilities, and stockholders' equity will all decrease. 
C) Assets and stockholders' equity will decrease, while liabilities will increase. 
D) Both assets and liabilities will increase.

Question 11

Match each of the following current liabilities with its meaning.
-Fringe benefits

Accepted Answer

A) Account payable 
B) Note payable 
C) Wages payable 
D) Interest payable 
E) Sales taxes payable
F)FICA taxes payable
G)Unemployment taxes payable
H)Unearned sales revenues
I)Estimated warranty liability 
A) Account payable 
B) Note payable 
C) Wages payable 
D) Interest payable 
E) Sales taxes payable
F)FICA taxes payable
G)Unemployment taxes payable
H)Unearned sales revenues
I)Estimated warranty liability

Question 12

Assume that a company has a current ratio of 3. Failure to record estimated warranty costs will cause the current ratio to be

Accepted Answer

A) overstated. 
B) understated. 
C) unchanged since the effects offset one another. 
D) unchanged since it has no impact on any current asset or liability accounts. 
A) overstated. 
B) understated. 
C) unchanged since the effects offset one another. 
D) unchanged since it has no impact on any current asset or liability accounts.

Question 13

On April 1, 2019, Guyton Sails accepted a $12,000 advance payment for maintaining a customer's fleet of sail boats. The contract is for a twelve month period. In May 2019, the company performed $1,200 worth of repairs. What is the remaining liability that would appear on the company's balance sheet at the end of May?

Accepted Answer

A) $12,000 
B) $10,000 
C) $10,800 
D) $1,200 
A) $12,000 
B) $10,000 
C) $10,800 
D) $1,200

Question 14

Match the following terms with the appropriate definition.
-Taxes and other amounts deducted from gross pay

Accepted Answer

A) Accrued liabilities 
B) Contingent liabilities 
C) Current liabilities 
D) Interest rate 
E) Liabilities
F)Payroll taxes
G)Sales taxes
H)Warranty
I)Withholdings 
A) Accrued liabilities 
B) Contingent liabilities 
C) Current liabilities 
D) Interest rate 
E) Liabilities
F)Payroll taxes
G)Sales taxes
H)Warranty
I)Withholdings

Question 15

An obligation that involves an existing condition for which the outcome is not known with certainty and depends upon some event that will occur in the future is called a(n) ____________________.

Accepted Answer

contingent

Question 16

A company's management expects to incur future expenses related to the repair or replacement of defective products sold. Those expenses must be matched to revenues in the period of the repair or replacement.

Accepted Answer

A) True 
 B)False

Question 17

GTO Division has $14,000 in current assets, $2,000 in accounts payable, and $2,000 in unearned sales revenue. What is the division's current ratio?

Accepted Answer

A) 1.75 
B) 2.25 
C) 3.00 
D) 3.50 
A) 1.75 
B) 2.25 
C) 3.00 
D) 3.50

Question 18

Match each of the following current liabilities with its meaning.
-State income taxes

Accepted Answer

A) Account payable 
B) Note payable 
C) Wages payable 
D) Interest payable 
E) Sales taxes payable
F)FICA taxes payable
G)Unemployment taxes payable
H)Unearned sales revenues
I)Estimated warranty liability 
A) Account payable 
B) Note payable 
C) Wages payable 
D) Interest payable 
E) Sales taxes payable
F)FICA taxes payable
G)Unemployment taxes payable
H)Unearned sales revenues
I)Estimated warranty liability

Question 19

A company has cash of $800, current liabilities of $500, and long-term liabilities of $600. If the cash ratio is 2.5, then marketable securities must be

Accepted Answer

A) $ 700. 
B) $ 800. 
C) $ 450. 
D) $2,000. 
A) $ 700. 
B) $ 800. 
C) $ 450. 
D) $2,000.

Question 20

Gainesville Truck Center
This company has a weekly payroll of $10,000 for its employees who work Monday through Friday. Federal and state income taxes are withheld in the amounts of $1,700 and $400, respectively, and FICA taxes are withheld at a mandatory rate of 7.65% (6.2% for Social Security and 1.45% for Medicare). In addition, the federal and state unemployment taxes are applied at rates of 2% and 5%, respectively. The company's year-end is December 31.
-Refer to Gainesville Truck Center. What is the impact on the accounting equation of the journal entry for the employer's tax expenses and related liabilities for this payroll transaction?

Accepted Answer

A) Assets and liabilities will increase. 
B) Assets and stockholders' equity will increase. 
C) Assets and liabilities will decrease. 
D) Liabilities will increase and stockholders' equity will decrease. 
A) Assets and liabilities will increase. 
B) Assets and stockholders' equity will increase. 
C) Assets and liabilities will decrease. 
D) Liabilities will increase and stockholders' equity will decrease.

Assume that a company has a cash ratio of .45. Recording the estimated warranties expense on the period's sales would cause the cash ratio to

The amount of a current liability reported on the balance sheet for interest payable includes

A retail company issues numerous discount coupons throughout the year. A balance in the estimated liability account indicates

Interest on a note payable can be calculated by multiplying the amount owed by the interest rate by the fraction of year that represents the time elapsed since borrowing.

Match each of the following current liabilities with its meaning. -Amounts owed for purchases on credit.

Match each of the following current liabilities with its meaning. -Amounts funded by companies to provide benefits to fired workers.

Match each of the following current liabilities with its meaning. -Social security and medicare taxes owed.

There are some liabilities, such as income taxes payable and the estimated warranty liability, for which the amounts must be estimated so they can be recorded in the same period as the related revenues. Failure to record these amounts in the same period as the related revenues is a violation of the

Match each of the following current liabilities with its meaning. -Fringe benefits

Assume that a company has a current ratio of 3. Failure to record estimated warranty costs will cause the current ratio to be

Match the following terms with the appropriate definition. -Taxes and other amounts deducted from gross pay

An obligation that involves an existing condition for which the outcome is not known with certainty and depends upon some event that will occur in the future is called a(n) ____________________.

A company's management expects to incur future expenses related to the repair or replacement of defective products sold. Those expenses must be matched to revenues in the period of the repair or replacement.

GTO Division has $14,000 in current assets, $2,000 in accounts payable, and $2,000 in unearned sales revenue. What is the division's current ratio?

Match each of the following current liabilities with its meaning. -State income taxes

A company has cash of $800, current liabilities of $500, and long-term liabilities of $600. If the cash ratio is 2.5, then marketable securities must be

Accounting and The Financial Statements

The Accounting Information System

Accrual Accounting

Internal Control And Cash

Sales And Receivables

Cost Of Goods Sold and Inventory

Operating Assets

Long Term Liabilities

Stockholders Apos Equity

The Statement Of Cash Flows

Financial Statement Analysis

Finance and Stock Market Equilibrium

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Exam 8: Current and Contingent Liabilities

Assume that a company has a cash ratio of .45. Recording the estimated warranties expense on the period's sales would cause the cash ratio to

The amount of a current liability reported on the balance sheet for interest payable includes

A retail company issues numerous discount coupons throughout the year. A balance in the estimated liability account indicates

Interest on a note payable can be calculated by multiplying the amount owed by the interest rate by the fraction of year that represents the time elapsed since borrowing.

Match each of the following current liabilities with its meaning. -Amounts owed for purchases on credit.

Match each of the following current liabilities with its meaning. -Amounts funded by companies to provide benefits to fired workers.

Match each of the following current liabilities with its meaning. -Social security and medicare taxes owed.

There are some liabilities, such as income taxes payable and the estimated warranty liability, for which the amounts must be estimated so they can be recorded in the same period as the related revenues. Failure to record these amounts in the same period as the related revenues is a violation of the

Match each of the following current liabilities with its meaning. -Fringe benefits

Assume that a company has a current ratio of 3. Failure to record estimated warranty costs will cause the current ratio to be

Match the following terms with the appropriate definition. -Taxes and other amounts deducted from gross pay

An obligation that involves an existing condition for which the outcome is not known with certainty and depends upon some event that will occur in the future is called a(n) ____________________.

A company's management expects to incur future expenses related to the repair or replacement of defective products sold. Those expenses must be matched to revenues in the period of the repair or replacement.

GTO Division has $14,000 in current assets, $2,000 in accounts payable, and $2,000 in unearned sales revenue. What is the division's current ratio?

Match each of the following current liabilities with its meaning. -State income taxes

A company has cash of $800, current liabilities of $500, and long-term liabilities of $600. If the cash ratio is 2.5, then marketable securities must be

Accounting and The Financial Statements

The Accounting Information System

Accrual Accounting

Internal Control And Cash

Sales And Receivables

Cost Of Goods Sold and Inventory

Operating Assets

Long Term Liabilities

Stockholders Apos Equity

The Statement Of Cash Flows

Financial Statement Analysis

Finance and Stock Market Equilibrium

Filters