Question 1

The cash ratio is calculated as follows: (Cash + Marketable Securities) / Current Liabilities.

Accepted Answer

A) True 
 B)False

Question 2

A cookie company includes one premium coupon in every cookie package. Upon returning 10 such coupons to the company, the customer will be sent a free cookie jar. In a recent year, the company sold 200,000 packages of cookies for $1 per package. It is estimated that 20% of the coupons will be redeemed. If the cookie jars cost the company $3 each, what amount of liability should be recorded?

Accepted Answer

A) $ 6,000 
B) $ 12,000 
C) $120,000 
D) $200,000 
A) $ 6,000 
B) $ 12,000 
C) $120,000 
D) $200,000

Question 3

Grayson Flowers borrowed $400,000 from the bank on a six-month, 7% interest-bearing note on October 1, 2019. The company's year-end is December 31st. The note and all related interest was repaid to the bank on April 1, 2020.
A)Prepare the company's entry for this note on October 1, 2019.
B)Record the adjusting entry for this note on December 31, 2019.
C)Indicate how the note and the accrued interest would be reported on the balance sheet on December 31, 2019.
D)Prepare the entry to record the repayment of the note on April 1, 2020.

Accepted Answer

The answer of Grayson Flowers borrowed $400,000 from the bank...

Question 4

When a company records the gross wages paid to its employees, the accounts to be credited include various taxes payable and ____________________.

Accepted Answer

The answer of When a company records the gross wages...

Question 5

Selected information from the firm's consolidated balance sheet is provided below. Assume that all of the account balances on the balance sheet are normal balances.  
-Refer to the partial balance sheet presented above for Glass Doctor. Compute the following liquidity ratios for 2020 and 2019:
Current Ratio
Quick Ratio
Cash Ratio
Operating Cash Flow Ratio
​
Assume that Glass Doctor's statement of cash flows presented cash flows from operating activities of $204.6 million and $201.1 million for the years ended December 31, 2020 and 2019, respectively. Comment on the direction and significance of the change in the ratios from 2019 to 2020.

Accepted Answer

The current ratio is computed by dividin

Question 6

Match each of the following current liabilities with its meaning.
-Gross pay

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

Warranty expenses result when a company sells products then estimates the units and cost per unit for repairs and replacements that may occur during the warranty period.

Accepted Answer

A) True 
 B)False

Question 8

On October 1st, a company borrowed $60,000 from Eighth National Bank on a 1-year, 7% note. If the company's fiscal year ends on December 31st, a year-end adjusting entry is required to increase

Accepted Answer

A) interest expense by $4,200. 
B) notes payable by $1,050. 
C) interest payable by $1,050. 
D) prepaid interest by $3,150. 
A) interest expense by $4,200. 
B) notes payable by $1,050. 
C) interest payable by $1,050. 
D) prepaid interest by $3,150.

Question 9

What are accrued liabilities, and what are some examples of accounts that would be classified as accrued liabilities in the current liabilities section of a balance sheet?

Accepted Answer

Accrued liabilities, or accrued payables

Question 10

Which of the following is not classified as a current liability account?

Accepted Answer

A) accounts payable 
B) note payable, due in 2 years 
C) salaries and wages payable 
D) income taxes payable 
A) accounts payable 
B) note payable, due in 2 years 
C) salaries and wages payable 
D) income taxes payable

Question 11

You are the owner of small chain of sporting goods. Currently, you pay a media company to maintain the company's website and Internet sales processing software system. You are considering bringing that operation in-house by hiring an Information Technology (IT) employee.
What factors should you consider in making this decision?

Accepted Answer

Of course, the primary concern is which

Question 12

Match each of the ratios named with the proper formula for computation.
-(Cash + Marketable Securities + Accounts Receivable) / Current Liabilities

Accepted Answer

A) Current Ratio 
B) Quick Ratio 
C) Cash Ratio 
D) Operating Cash Flow Ratio 
A) Current Ratio 
B) Quick Ratio 
C) Cash Ratio 
D) Operating Cash Flow Ratio

Question 13

During the year, Going, Going, Gone sold 100 hot air balloons for $4,000 each. The balloons carry a 5-year warranty for defects. Estimates indicate that repair costs will average 4% of the total selling price. The estimated warranty liability at the beginning of the year was $42,000. $11,000 in claims was actually incurred during the year to honor their warranty. What was the balance in the estimated warranty liability at the end of the year?

Accepted Answer

A) $47,000 
B) $42,000 
C) $37,000 
D) $ 5,000 
A) $47,000 
B) $42,000 
C) $37,000 
D) $ 5,000

Question 14

An example of a current liability is the current maturity of a long-term debt.

Accepted Answer

A) True 
 B)False

Question 15

GT Company has $200 in cash, $500 in accounts receivable, and $700 in inventory. The company also has $200 in accounts payable and $200 in unearned sales revenue. What is the company's quick 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 16

Match each of the following current liabilities with its meaning.
-Federal 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 17

A flour mill orders grain sacks from a local farmer. When the company places an order for grain on account, the corresponding journal entry includes a debit to Supplies and a credit to ____________________.

Accepted Answer

The answer of A flour mill orders grain sacks from...

Question 18

Match each of the ratios named with the proper formula for computation.
-Current Assets / Current Liabilities

Accepted Answer

A) Current Ratio 
B) Quick Ratio 
C) Cash Ratio 
D) Operating Cash Flow Ratio 
A) Current Ratio 
B) Quick Ratio 
C) Cash Ratio 
D) Operating Cash Flow Ratio

Question 19

Gospel Ministries purchased on account two pianos on April 3, 2019 for $6,600. The company agreed to pay an extra $100 to have the seller deliver the pianos. Unfortunately, one of the pianos was damaged during transit. The seller agreed to deduct $200 from the amount owed. Gospel Ministries paid for the pianos in full on May 3, 2019.
​
Prepare the journal entries that Gospel Ministries should make on April 3 and May 3.

Accepted Answer

The answer of Gospel Ministries purchased on account two pianos...

Question 20

Match the following terms with the appropriate definition.
-Liabilities created by adjusting entries

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

The cash ratio is calculated as follows: (Cash + Marketable Securities) / Current Liabilities.

When a company records the gross wages paid to its employees, the accounts to be credited include various taxes payable and ____________________.

Match each of the following current liabilities with its meaning. -Gross pay

Warranty expenses result when a company sells products then estimates the units and cost per unit for repairs and replacements that may occur during the warranty period.

On October 1st, a company borrowed $60,000 from Eighth National Bank on a 1-year, 7% note. If the company's fiscal year ends on December 31st, a year-end adjusting entry is required to increase

What are accrued liabilities, and what are some examples of accounts that would be classified as accrued liabilities in the current liabilities section of a balance sheet?

Which of the following is not classified as a current liability account?

Match each of the ratios named with the proper formula for computation. -(Cash + Marketable Securities + Accounts Receivable) / Current Liabilities

An example of a current liability is the current maturity of a long-term debt.

GT Company has $200 in cash, $500 in accounts receivable, and $700 in inventory. The company also has $200 in accounts payable and $200 in unearned sales revenue. What is the company's quick ratio?

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

A flour mill orders grain sacks from a local farmer. When the company places an order for grain on account, the corresponding journal entry includes a debit to Supplies and a credit to ____________________.

Match each of the ratios named with the proper formula for computation. -Current Assets / Current Liabilities

Match the following terms with the appropriate definition. -Liabilities created by adjusting entries

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

The cash ratio is calculated as follows: (Cash + Marketable Securities) / Current Liabilities.

When a company records the gross wages paid to its employees, the accounts to be credited include various taxes payable and ____________________.

Match each of the following current liabilities with its meaning. -Gross pay

Warranty expenses result when a company sells products then estimates the units and cost per unit for repairs and replacements that may occur during the warranty period.

On October 1st, a company borrowed $60,000 from Eighth National Bank on a 1-year, 7% note. If the company's fiscal year ends on December 31st, a year-end adjusting entry is required to increase

What are accrued liabilities, and what are some examples of accounts that would be classified as accrued liabilities in the current liabilities section of a balance sheet?

Which of the following is not classified as a current liability account?

Match each of the ratios named with the proper formula for computation. -(Cash + Marketable Securities + Accounts Receivable) / Current Liabilities

An example of a current liability is the current maturity of a long-term debt.

GT Company has $200 in cash, $500 in accounts receivable, and $700 in inventory. The company also has $200 in accounts payable and $200 in unearned sales revenue. What is the company's quick ratio?

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

A flour mill orders grain sacks from a local farmer. When the company places an order for grain on account, the corresponding journal entry includes a debit to Supplies and a credit to ____________________.

Match each of the ratios named with the proper formula for computation. -Current Assets / Current Liabilities

Match the following terms with the appropriate definition. -Liabilities created by adjusting entries

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