Question 1

Which of the following statements regarding accounts payable is false?

Accepted Answer

A) Accounting for accounts payable is really just the flip side of accounts receivable. 
B) Accounts payable arise when a business purchases goods or services on credit. 
C) Accounts payable arise when a business promises to purchase goods or services in the future. 
D) Accounts payable seldom require the payment of interest. 
A) Accounting for accounts payable is really just the flip side of accounts receivable. 
B) Accounts payable arise when a business purchases goods or services on credit. 
C) Accounts payable arise when a business promises to purchase goods or services in the future. 
D) Accounts payable seldom require the payment of interest.

Question 2

Accounts payable represent amounts owed to outside suppliers of goods and services; whereas ____________________ reflect amounts owed in which a formal agreement or contract has been signed.

Accepted Answer

The answer of Accounts payable represent amounts owed to outside...

Question 3

The current ratio is calculated as follows: Current Assets / Current Liabilities.

Accepted Answer

A) True 
 B)False

Question 4

A landlord records the collection of a tenant's security deposit as a(n)

Accepted Answer

A) prepaid expense. 
B) liability. 
C) contingent liability. 
D) contra liability. 
A) prepaid expense. 
B) liability. 
C) contingent liability. 
D) contra liability.

Question 5

A probable loss from a lawsuit that can be reasonably estimated should not be reported on the balance sheet as a current liability.

Accepted Answer

A) True 
 B)False

Question 6

A company has $8,000 in cash, $9,250 in accounts receivable, and $19,500 in inventory. If current liabilities are $14,350, then the quick ratio will be

Accepted Answer

A) 5.0. 
B) 2.6. 
C) 2.0. 
D) 1.2. 
A) 5.0. 
B) 2.6. 
C) 2.0. 
D) 1.2.

Question 7

Match each of the following current liabilities with its meaning.
-An accrued liability for amounts owed to employees for work performed.

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

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. Which of the following is the correct journal entry to record the sale of the gift cards?

Accepted Answer

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

Question 9

Which of the following would appear on the balance sheet as a current liability?

Accepted Answer

A) A loss that could be expected upon the occurrence of a strike by employees. 
B) Potential damages from the risk of explosions in a fireworks factory. 
C) Payments that are likely to occur for pension benefits to employees. 
D) A possible loss from a threatened lawsuit. 
A) A loss that could be expected upon the occurrence of a strike by employees. 
B) Potential damages from the risk of explosions in a fireworks factory. 
C) Payments that are likely to occur for pension benefits to employees. 
D) A possible loss from a threatened lawsuit.

Question 10

Match the following terms with the appropriate definition.
-Guarantees the repair or replacement of defective goods during a specified period following the sale

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 11

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. The $150 price of each battery includes a $3 federal excise tax. Which of the following statements is true regarding the proper accounting treatment for the taxes related to this transaction?

Accepted Answer

A) They are recorded as additions to revenue. 
B) They are recorded as unearned revenues on the company's balance sheet. 
C) They are recorded as a current liability owed to the taxing authority. 
D) They are recorded as expenses in the same period as the corresponding sales revenue. 
A) They are recorded as additions to revenue. 
B) They are recorded as unearned revenues on the company's balance sheet. 
C) They are recorded as a current liability owed to the taxing authority. 
D) They are recorded as expenses in the same period as the corresponding sales revenue.

Question 12

Match the following terms with the appropriate definition.
-A percentage of the loan amount that compensates the lender for the use of his/her money

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 13

On August 1, Genuine Services accepted a $6,000 advance payment from a customer for services to be provided in the future. The contract requires the company to review operations at each of the customer's six locations over the next 6 months. What is the impact on the accounting equation of recording this transaction on August 1st?

Accepted Answer

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

Question 14

Grand Strand Power & Light provides utilities to a gulf coast community. On November 30 of the current year, the utility billed 1,500 residential customers a total of $118,500 for electricity. In addition, the company is required to collect state taxes of 1.5% and Federal excise taxes of 0.95%. Both of these taxes are used to fund the energy commission.
A)What total amount should be billed to customers for the month ending November 30?
B)Provide the journal entry to record the November billings.
C)Record the remittance of the taxes to the appropriate governmental units on December 31.

Accepted Answer

The answer of Grand Strand Power & Light provides utilities...

Question 15

A company provides a one-year warranty for its products. The estimated cost of parts and labor required to satisfy warranty claims should be recorded as a current liability in the period the products are sold.

Accepted Answer

A) True 
 B)False

Question 16

Sales taxes collected from customers should be recorded in a liability account until the cash is passed along to the taxing authority.

Accepted Answer

A) True 
 B)False

Question 17

During January, a travel company sold forty cruise vacation packages for $147,960. Customers are required to pay in advance, but the package price is refundable until the date the cruise departs. The cruises begin in February.
A)Record the entry on January 31 to book the amounts collected from customers.
B)What entry is needed to record each time one of its customers departs on the cruise vacation?

Accepted Answer

The answer of During January, a travel company sold forty...

Question 18

Match each of the following current liabilities with its meaning.
-State 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 19

Which of the following would appear on the balance sheet as a current liability?

Accepted Answer

A) A probable loss in the amount of $4 million from a pending lawsuit. 
B) A possible loss in the amount of $4 million from a pending lawsuit. 
C) A probable loss from a pending lawsuit, the amount of which is not yet determinable. 
D) A lawsuit for $4 million for which the likelihood of loss is remote. 
A) A probable loss in the amount of $4 million from a pending lawsuit. 
B) A possible loss in the amount of $4 million from a pending lawsuit. 
C) A probable loss from a pending lawsuit, the amount of which is not yet determinable. 
D) A lawsuit for $4 million for which the likelihood of loss is remote.

Question 20

Federal excise taxes payable is not a current liability.

Accepted Answer

A) True 
 B)False

Which of the following statements regarding accounts payable is false?

Accounts payable represent amounts owed to outside suppliers of goods and services; whereas ____________________ reflect amounts owed in which a formal agreement or contract has been signed.

The current ratio is calculated as follows: Current Assets / Current Liabilities.

A landlord records the collection of a tenant's security deposit as a(n)

A probable loss from a lawsuit that can be reasonably estimated should not be reported on the balance sheet as a current liability.

A company has $8,000 in cash, $9,250 in accounts receivable, and $19,500 in inventory. If current liabilities are $14,350, then the quick ratio will be

Match each of the following current liabilities with its meaning. -An accrued liability for amounts owed to employees for work performed.

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. Which of the following is the correct journal entry to record the sale of the gift cards?

Which of the following would appear on the balance sheet as a current liability?

Match the following terms with the appropriate definition. -Guarantees the repair or replacement of defective goods during a specified period following the sale

Match the following terms with the appropriate definition. -A percentage of the loan amount that compensates the lender for the use of his/her money

A company provides a one-year warranty for its products. The estimated cost of parts and labor required to satisfy warranty claims should be recorded as a current liability in the period the products are sold.

Sales taxes collected from customers should be recorded in a liability account until the cash is passed along to the taxing authority.

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

Which of the following would appear on the balance sheet as a current liability?

Federal excise taxes payable is not a current liability.

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

Which of the following statements regarding accounts payable is false?

Accounts payable represent amounts owed to outside suppliers of goods and services; whereas ____________________ reflect amounts owed in which a formal agreement or contract has been signed.

The current ratio is calculated as follows: Current Assets / Current Liabilities.

A landlord records the collection of a tenant's security deposit as a(n)

A probable loss from a lawsuit that can be reasonably estimated should not be reported on the balance sheet as a current liability.

A company has $8,000 in cash, $9,250 in accounts receivable, and $19,500 in inventory. If current liabilities are $14,350, then the quick ratio will be

Match each of the following current liabilities with its meaning. -An accrued liability for amounts owed to employees for work performed.

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. Which of the following is the correct journal entry to record the sale of the gift cards?

Which of the following would appear on the balance sheet as a current liability?

Match the following terms with the appropriate definition. -Guarantees the repair or replacement of defective goods during a specified period following the sale

Match the following terms with the appropriate definition. -A percentage of the loan amount that compensates the lender for the use of his/her money

A company provides a one-year warranty for its products. The estimated cost of parts and labor required to satisfy warranty claims should be recorded as a current liability in the period the products are sold.

Sales taxes collected from customers should be recorded in a liability account until the cash is passed along to the taxing authority.

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

Which of the following would appear on the balance sheet as a current liability?

Federal excise taxes payable is not a current liability.

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

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. Which of the following is the correct journal entry to record the sale of the gift cards?