Question 1

Match each of the following current liabilities with its meaning.
-Federal unemployment 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 2

General Lighting
​
During the first quarter of the current year, the company sold 4,000 batteries on credit for $150 each plus state sales tax of 6%.
-Refer to General Lighting. Sales taxes are required to be paid to the state taxing authority at the end of the quarter. What is the amount of the current liability related to this transaction?

Accepted Answer

A) $ 36,000 
B) $600,000 
C) $636,000 
D) $150,000 
A) $ 36,000 
B) $600,000 
C) $636,000 
D) $150,000

Question 3

A company has a note payable that is due on December 31, 2020. In its December 31, 2019, balance sheet, this note payable should be classified as a(n) ____________________.

Accepted Answer

The answer of A company has a note payable that...

Question 4

When a company uses past experience to estimate the amount of likely warranty claims in the future, a current liability account must be created.

Accepted Answer

A) True 
 B)False

Question 5

What is the impact on the accounting equation of recording the issuance of a short-term note payable?

Accepted Answer

A) Both assets and liabilities increase. 
B) Both assets and stockholders' equity decrease. 
C) Both assets and stockholders' equity increase. 
D) Liabilities increase and stockholders' equity decreases. 
A) Both assets and liabilities increase. 
B) Both assets and stockholders' equity decrease. 
C) Both assets and stockholders' equity increase. 
D) Liabilities increase and stockholders' equity decreases.

Question 6

Acceptable current ratios vary from industry to industry, but a general rule of thumb is that a current ratio greater than ____________________ is appropriate.

Accepted Answer

The answer of Acceptable current ratios vary from industry to...

Question 7

Golden Sound sells premium car stereo systems and various equipment for home sound systems as well. Sales and expected warranty claims for the year ended December 31 are as follows:   Prepare the journal entry to record warranty expense for the year ended December 31.

Accepted Answer

The answer of Golden Sound sells premium car stereo systems...

Question 8

What is the impact on the accounting equation of recording a payment to a supplier on account?

Accepted Answer

A) Both assets and liabilities decrease. 
B) Both assets and stockholders' equity decrease. 
C) Liabilities decrease and stockholders' equity increases. 
D) Liabilities increase and stockholders' equity decreases. 
A) Both assets and liabilities decrease. 
B) Both assets and stockholders' equity decrease. 
C) Liabilities decrease and stockholders' equity increases. 
D) Liabilities increase and stockholders' equity decreases.

Question 9

Match each of the following current liabilities with its meaning.
-A contractual agreement to borrow and repay money.

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 10

Which of the following statements regarding contingent liabilities is true?

Accepted Answer

A) If they are probable and estimable, then they must be recorded even before the outcome of the future event. 
B) If they are probable and estimable, then they should be disclosed in the notes to the financial statements. 
C) The accounting principle that determines whether a contingent liability is to be recorded is that of Historical Cost. 
D) Contingencies that are not estimable should not be recorded or disclosed in the financial statements even if they are probable. 
A) If they are probable and estimable, then they must be recorded even before the outcome of the future event. 
B) If they are probable and estimable, then they should be disclosed in the notes to the financial statements. 
C) The accounting principle that determines whether a contingent liability is to be recorded is that of Historical Cost. 
D) Contingencies that are not estimable should not be recorded or disclosed in the financial statements even if they are probable.

Question 11

What is the impact on the accounting equation of recording the accrual of wages expense?

Accepted Answer

A) Both assets and liabilities decrease. 
B) Both assets and stockholders' equity decrease. 
C) Liabilities decrease and stockholders' equity increases. 
D) Liabilities increase and stockholders' equity decreases. 
A) Both assets and liabilities decrease. 
B) Both assets and stockholders' equity decrease. 
C) Liabilities decrease and stockholders' equity increases. 
D) Liabilities increase and stockholders' equity decreases.

Question 12

Georgia's Salon
​
The salon sells $50,000 of gift cards in May 2019. These gift cards may be used anytime before their expiration on May 31, 2020.
-Refer to Georgia's Salon. During May 2019, $10,000 of the gift cards were redeemed for salon services. Which of the following is the correct journal entry to record the redemption of the gift cards?

Accepted Answer

The answer of Georgia's Salon
​
The salon sells $50,000 of gift...

Question 13

A company pays wages of $12,500 at the end of each 5-day work week.
A)What is the standard entry for wages paid on each pay date?
B)Assuming the company's year-end falls on a Wednesday, prepare the necessary journal entries on December 31st and on the January 2nd pay date.

Accepted Answer

The answer of A company pays wages of $12,500 at...

Question 14

When a company sells goods or provides services for a customer but the customer intends to pay later, the company must record a current liability.

Accepted Answer

A) True 
 B)False

Question 15

An adjusting entry to record accrued interest on a note payable includes a debit to Interest Expense and a credit to ____________________.

Accepted Answer

The answer of An adjusting entry to record accrued interest...

Question 16

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. Which of the following statements is true regarding the entry to record wages and the related liabilities?

Accepted Answer

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

Question 17

The cash ratio is calculated by dividing cash flows from operating activities by current liabilities.

Accepted Answer

A) True 
 B)False

Question 18

Long-term assets are $5,000, current liabilities are $700, and long-term liabilities are $3,000 and the operating cash flow ratio is 1.1, then the company's cash flows from operating activities will be

Accepted Answer

A) $ 700. 
B) $ 770. 
C) $3,300. 
D) $5,500. 
A) $ 700. 
B) $ 770. 
C) $3,300. 
D) $5,500.

Question 19

During the year, Great Adventures sold 150 dune buggies for $4,000 each. The dune buggies carry a 5-year warranty for defects. Estimates suggest that repair costs will average 4% of the total selling price. The estimated warranty liability at the beginning of the year was $14,000, and $20,000 in claims was actually incurred during the year to honor the warranty. What was the warranty expense at the end of the year?

Accepted Answer

A) $10,000 
B) $18,000 
C) $20,000 
D) $24,000 
A) $10,000 
B) $18,000 
C) $20,000 
D) $24,000

Question 20

Go Cars has $200 in cash, $500 in accounts receivable, $400 in marketable securities, and $700 in inventory. Assuming the company also has $200 in accounts payable and $200 in unearned sales revenue, what is its cash ratio?

Accepted Answer

A) 4.50 
B) 3.00 
C) 2.75 
D) 1.50 
A) 4.50 
B) 3.00 
C) 2.75 
D) 1.50

Match each of the following current liabilities with its meaning. -Federal unemployment taxes

A company has a note payable that is due on December 31, 2020. In its December 31, 2019, balance sheet, this note payable should be classified as a(n) ____________________.

When a company uses past experience to estimate the amount of likely warranty claims in the future, a current liability account must be created.

What is the impact on the accounting equation of recording the issuance of a short-term note payable?

Acceptable current ratios vary from industry to industry, but a general rule of thumb is that a current ratio greater than ____________________ is appropriate.

Golden Sound sells premium car stereo systems and various equipment for home sound systems as well. Sales and expected warranty claims for the year ended December 31 are as follows: Prepare the journal entry to record warranty expense for the year ended December 31.

What is the impact on the accounting equation of recording a payment to a supplier on account?

Match each of the following current liabilities with its meaning. -A contractual agreement to borrow and repay money.

Which of the following statements regarding contingent liabilities is true?

What is the impact on the accounting equation of recording the accrual of wages expense?

A company pays wages of $12,500 at the end of each 5-day work week. A)What is the standard entry for wages paid on each pay date? B)Assuming the company's year-end falls on a Wednesday, prepare the necessary journal entries on December 31st and on the January 2nd pay date.

When a company sells goods or provides services for a customer but the customer intends to pay later, the company must record a current liability.

An adjusting entry to record accrued interest on a note payable includes a debit to Interest Expense and a credit to ____________________.

The cash ratio is calculated by dividing cash flows from operating activities by current liabilities.

Long-term assets are $5,000, current liabilities are $700, and long-term liabilities are $3,000 and the operating cash flow ratio is 1.1, then the company's cash flows from operating activities will be

Go Cars has $200 in cash, $500 in accounts receivable, $400 in marketable securities, and $700 in inventory. Assuming the company also has $200 in accounts payable and $200 in unearned sales revenue, what is its cash ratio?

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

Exam 8: Current and Contingent Liabilities

Match each of the following current liabilities with its meaning. -Federal unemployment taxes

A company has a note payable that is due on December 31, 2020. In its December 31, 2019, balance sheet, this note payable should be classified as a(n) ____________________.

When a company uses past experience to estimate the amount of likely warranty claims in the future, a current liability account must be created.

What is the impact on the accounting equation of recording the issuance of a short-term note payable?

Acceptable current ratios vary from industry to industry, but a general rule of thumb is that a current ratio greater than ____________________ is appropriate.

Golden Sound sells premium car stereo systems and various equipment for home sound systems as well. Sales and expected warranty claims for the year ended December 31 are as follows: Prepare the journal entry to record warranty expense for the year ended December 31.

What is the impact on the accounting equation of recording a payment to a supplier on account?

Match each of the following current liabilities with its meaning. -A contractual agreement to borrow and repay money.

Which of the following statements regarding contingent liabilities is true?

What is the impact on the accounting equation of recording the accrual of wages expense?

A company pays wages of $12,500 at the end of each 5-day work week. A)What is the standard entry for wages paid on each pay date? B)Assuming the company's year-end falls on a Wednesday, prepare the necessary journal entries on December 31st and on the January 2nd pay date.

When a company sells goods or provides services for a customer but the customer intends to pay later, the company must record a current liability.

An adjusting entry to record accrued interest on a note payable includes a debit to Interest Expense and a credit to ____________________.

The cash ratio is calculated by dividing cash flows from operating activities by current liabilities.

Long-term assets are $5,000, current liabilities are $700, and long-term liabilities are $3,000 and the operating cash flow ratio is 1.1, then the company's cash flows from operating activities will be

Go Cars has $200 in cash, $500 in accounts receivable, $400 in marketable securities, and $700 in inventory. Assuming the company also has $200 in accounts payable and $200 in unearned sales revenue, what is its cash ratio?

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