Question 1

With an interest-bearing note a borrower must pay the ________________ of the note plus _________________ at maturity.

Accepted Answer

The answer of With an interest-bearing note a borrower must...

Question 2

Mast General Store has total receipts for the month of $45990 including sales taxes. If the sales tax rate is 5% what are Mast's sales for the month?

Accepted Answer

A)  $43691 
B)  $43800 
C)  $48290 
D)  It cannot be determined. 
A)  $43691 
B)  $43800 
C)  $48290 
D)  It cannot be determined.

Question 3

The relationship between current liabilities and current assets is

Accepted Answer

A)  useful in determining income. 
B)  useful in evaluating a company's liquidity. 
C)  called the matching principle. 
D)  useful in determining the amount of a company's long-term debt. 
A)  useful in determining income. 
B)  useful in evaluating a company's liquidity. 
C)  called the matching principle. 
D)  useful in determining the amount of a company's long-term debt.

Question 4

FICA taxes are a voluntary deduction from employee earnings.

Accepted Answer

A) True 
 B)False

Question 5

Mike Dooley's regular hourly wage is $16 an hour. He receives overtime pay at the rate of time and a half. The FICA tax rate is 7.65%. Mike is paid every two weeks. For the first pay period in January Mike worked 86 hours of which 6 were overtime hours. Mike's federal income tax withholding is $350 and his state income tax withholding is $110. Mike has authorized that $50 be withheld from his check each pay period for savings bonds.
Instructions
Compute Mike Dooley's gross earnings and net pay for the pay period showing each payroll deduction in arriving at net pay.

Accepted Answer

None

Question 6

Mackenzie Insurance Company collected a premium of $15000 for a 1-year insurance policy on May 1. What amount should Mackenzie report as a current liability for Unearned Insurance Revenue at December 31?

Accepted Answer

A)  $0. 
B)  $5000. 
C)  $10000. 
D)  $15000. 
A)  $0. 
B)  $5000. 
C)  $10000. 
D)  $15000.

Question 7

FICA taxes do not provide workers with

Accepted Answer

A)  life insurance. 
B)  supplemental retirement. 
C)  employment disability. 
D)  medical benefits. 
A)  life insurance. 
B)  supplemental retirement. 
C)  employment disability. 
D)  medical benefits.

Question 8

Post-retirement benefits consist of payments by employers to retired employees for

Accepted Answer

A)  health care and life insurance only. 
B)  health care and pensions only. 
C)  life insurance and pensions only. 
D)  health care life insurance and pensions. 
A)  health care and life insurance only. 
B)  health care and pensions only. 
C)  life insurance and pensions only. 
D)  health care life insurance and pensions.

Question 9

Notes payable usually are issued to meet long-term financing needs.

Accepted Answer

A) True 
 B)False

Question 10

Match the codes assigned to the following payroll functions to the procedures listed below:

Accepted Answer

The answer of Match the codes assigned to the following...

Question 11

Watunga County Bank agrees to lend Hoffman Granite Company $600000 on January 1. Hoffman Granite Company signs a $600000 8% 9-month note. What is the adjusting entry required if Hoffman Granite Company prepares financial statements on June 30? a. 
$\begin{array}{lrr}
  \text { Interest Expense } &24,000\
 \text {  Interest Payable } &&24,000\
\end{array}$

b.
$\begin{array}{lrr}
  \text {Interest Expense  } &24,000\
 \text {  Cash} &&24,000\
\end{array}$

c. 
$\begin{array}{lrr}
  \text {Interest Payable  } &24,000\
 \text {Cash  } &&24,000\
\end{array}$

d. 
$\begin{array}{lrr}
  \text {  Interest Payable} &24,000\
 \text { Interest Expense } &&24,000\
\end{array}$

Accepted Answer

The answer of Watunga County Bank agrees to lend Hoffman...

Question 12

Dorie Greenspan Publications publishes a food and travel magazine. The magazine sells for $3 a copy on the newsstand. Yearly subscriptions to the magazine cost $24 per year (12 issues). During December 2016 Dorie Greenspan Publications sells 12000 copies of the food and travel magazine at newsstands and receives payment for 20000 subscriptions for 2017. Financial statements are prepared monthly.
Instructions
(a) Prepare the December 2016 journal entries to record the newsstand sales and subscriptions received.
(b) Prepare the necessary adjusting entry on January 31 2015. The January 2017 issue has been mailed to subscribers.

Accepted Answer

None

Question 13

The entry to record the payment of an interest-bearing note at maturity after all interest expense has been recognized is

Accepted Answer

A)  Notes Payable Interest Payable
Cash 
B)  Notes Payable Interest Expense
Cash 
C)  Notes Payable Cash 
D)  Notes Payable Cash
Interest Payable 
A)  Notes Payable Interest Payable
Cash 
B)  Notes Payable Interest Expense
Cash 
C)  Notes Payable Cash 
D)  Notes Payable Cash
Interest Payable

Question 14

The following totals for the month of April were taken from the payroll register of Asplend Company. $$\begin{array} { l r } 
\text { Salaries and wages } & \$ 72,000 \
\text { FlCA taxes withheld } & 5,508 \
\text { Income taxes withheld } & 15,000 \
\text { Medical insurance deductions } & 2,700 \
\text { Federal unemployment taxes } & 192 \
\text { State unemployment taxes } & 1,296
\end{array}$$ The entry to record accrual of Asplend Company's payroll taxes would include a

Accepted Answer

A)  debit to Payroll Tax Expense for $1488. 
B)  debit to Payroll Tax Expense for $6996. 
C)  credit to FICA Taxes Payable for $11016. 
D)  credit to Payroll Tax Expense for $1488. 
A)  debit to Payroll Tax Expense for $1488. 
B)  debit to Payroll Tax Expense for $6996. 
C)  credit to FICA Taxes Payable for $11016. 
D)  credit to Payroll Tax Expense for $1488.

Question 15

In concept the estimating of Warranty Expense when products are sold under warranty is similar to the estimating of Bad Debt Expense based on credit sales.

Accepted Answer

A) True 
 B)False

Question 16

The effective federal unemployment tax rate is usually

Accepted Answer

A)  6.2%. 
B)  0.8%. 
C)  5.4%. 
D)  8.0%. 
A)  6.2%. 
B)  0.8%. 
C)  5.4%. 
D)  8.0%.

Question 17

Post-retirement benefits include all of the following except

Accepted Answer

A)  health care. 
B)  life insurance. 
C)  pensions. 
D)  vacation benefits. 
A)  health care. 
B)  life insurance. 
C)  pensions. 
D)  vacation benefits.

Question 18

Takei Company's payroll for the week ending January 15 amounted to $367000 for salaries and wages. None of the employees has reached the earnings limits specified for federal or state employer payroll taxes. The following deductions were withheld from employees' salaries and wages: $$\begin{array} { l r } 
\text { Federal Income Tax } & \$ 75,000 \
\text { State Income Tax } & 13,500 \
\text { FlCA Taxes } & 28,075 \
\text { Union Dues } & 4,100 \
\text { United Fund Contributions } & 2,700
\end{array}$$ Federal unemployment tax (FUTA) rate is 6.2% less a credit equal to the rate paid for state unemployment taxes. The state unemployment tax (SUTA) rate is 5.4%.
Instructions
Prepare the journal entry to record the weekly payroll ending January 15 and also the employer's payroll tax expense on the payroll.

Accepted Answer

None

Question 19

Old Hampton Company is preparing adjusting entries at December 31. An analysis reveals the following:
1. During December Old Hampton Company sold 3000 units of a product that carries a 60-day warranty. The sales for this product totaled $100000. The company expects 4% of the units to need repair under the warranty and it estimates that the average repair cost per unit will be $15.
2. The company has been sued by a disgruntled employee. Legal counsel believes that it is reasonably possible that the company will have to pay $200000 in damages.
3. The company has been named as one of several defendants in a $400000 damage suit. Legal counsel believes it is unlikely that the company will have to pay any damages.
4. Employees earn vacation pay at a rate of 1 day per month. During December ten employees qualify for vacation pay. Their average daily wage is $90 per employee.
Instructions
Prepare adjusting entries if required for each of the four items.

Accepted Answer

1. 3,000 units @#LAT-DLM& units expected to be def

Question 20

Current liabilities presented under IFRS are sometimes shown

Accepted Answer

A)  alphabetically. 
B)  in order of magnitude. 
C)  in order of the dates they become due. 
D)  after long-term liabilities. 
A)  alphabetically. 
B)  in order of magnitude. 
C)  in order of the dates they become due. 
D)  after long-term liabilities.

Exam 11: Current Liabilities and Payroll Accounting

With an interest-bearing note a borrower must pay the ________________ of the note plus _________________ at maturity.

Mast General Store has total receipts for the month of $45990 including sales taxes. If the sales tax rate is 5% what are Mast's sales for the month?

The relationship between current liabilities and current assets is

FICA taxes are a voluntary deduction from employee earnings.

Mackenzie Insurance Company collected a premium of $15000 for a 1-year insurance policy on May 1. What amount should Mackenzie report as a current liability for Unearned Insurance Revenue at December 31?

FICA taxes do not provide workers with

Post-retirement benefits consist of payments by employers to retired employees for

Notes payable usually are issued to meet long-term financing needs.

Match the codes assigned to the following payroll functions to the procedures listed below:

The entry to record the payment of an interest-bearing note at maturity after all interest expense has been recognized is

In concept the estimating of Warranty Expense when products are sold under warranty is similar to the estimating of Bad Debt Expense based on credit sales.

The effective federal unemployment tax rate is usually

Post-retirement benefits include all of the following except

Current liabilities presented under IFRS are sometimes shown

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting Information Systems

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Accounting for Partnerships

Corporations: Organization and Capital Stock Transactions

Corporations: Dividends, Retained Earnings, and Income Reporting

Long-Term Liabilities

Investments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Incremental Analysis and Capital Budgeting

Time Value of Money

Filters

With an interest-bearing note a borrower must pay the of the note plus _ at maturity.