Question 1

Liabilities are classified on the balance sheet as being _______________ liabilities or ______________ liabilities.

Accepted Answer

The answer of Liabilities are classified on the balance sheet...

Question 2

Internal control over payroll is not necessary because employees will complain if they do not receive the correct amount on their payroll checks.

Accepted Answer

A) True 
 B)False

Question 3

Which one of the following payroll taxes is not withheld from an employee's wages because it is not levied on the employee?

Accepted Answer

A)  Federal income tax 
B)  Federal unemployment tax 
C)  State income tax 
D)  FICA tax 
A)  Federal income tax 
B)  Federal unemployment tax 
C)  State income tax 
D)  FICA tax

Question 4

On September 1 Eli's Painting Service borrows $150000 from National Bank on a 4-month $150000 6% note. The entry by Eli's Painting Service to record payment of the note and accrued interest on January 1 is a. 
$\begin{array}{lrr}
  \text {Notes Payable  } &153,000\
 \text {  Cash } &&153,000\
\end{array}$

b. 
$\begin{array}{lrr}
  \text { Notes Payable } &150,000\
 \text {  Interest Payable} &3,000\
 \text {   Cash} &&153,000
\end{array}$

c.
$\begin{array}{lrr}
  \text {Notes Payable  } &150,000\
 \text {  Interest Payable} &9,000\
 \text { Cash  } &&159,000
\end{array}$

d.
$\begin{array}{lrr}
  \text {  Notes Payable} &150,000\
 \text { Interest Expense  } &3,000\
 \text {  Cash } &&153,000
\end{array}$

Accepted Answer

The answer of On September 1 Eli's Painting Service borrows...

Question 5

Most companies involved in interstate commerce are required to compute overtime at

Accepted Answer

A)  the worker's regular hourly wage. 
B)  1.25 times the worker's regular hourly wage. 
C)  1.5 times the worker's regular hourly wage. 
D)  2.5 times the worker's regular hourly wage. 
A)  the worker's regular hourly wage. 
B)  1.25 times the worker's regular hourly wage. 
C)  1.5 times the worker's regular hourly wage. 
D)  2.5 times the worker's regular hourly wage.

Question 6

A payroll tax expense which is borne entirely by the employer is the federal _______________ tax.

Accepted Answer

The answer of A payroll tax expense which is borne...

Question 7

The amount of sales tax collected by a retail store when making sales is

Accepted Answer

A)  a miscellaneous revenue for the store. 
B)  a current liability. 
C)  not recorded because it is a tax paid by the customer. 
D)  recorded as an operating expense. 
A)  a miscellaneous revenue for the store. 
B)  a current liability. 
C)  not recorded because it is a tax paid by the customer. 
D)  recorded as an operating expense.

Question 8

A contingency need not be recorded nor disclosed when

Accepted Answer

A)  it is probable the contingency will happen and the amount can be reasonably estimated. 
B)  it is probable the contingency will happen but the amount cannot be reasonably estimated. 
C)  it is reasonably possible the contingency will happen and the amount can be reasonably estimated. 
D)  the possibility of the contingency happening is remote. 
A)  it is probable the contingency will happen and the amount can be reasonably estimated. 
B)  it is probable the contingency will happen but the amount cannot be reasonably estimated. 
C)  it is reasonably possible the contingency will happen and the amount can be reasonably estimated. 
D)  the possibility of the contingency happening is remote.

Question 9

Monkee's Company has current assets of $45000 current liabilities of $50000 long-term assets of $90000 and long-term liabilities of $40000. Monkee's Company's working capital and its current ratio are:

Accepted Answer

A)  $45000 and .90:1. 
B)  $5000 and 1.50:1. 
C)  $5000 and .90:1. 
D)  ($5000) and .90:1. 
A)  $45000 and .90:1. 
B)  $5000 and 1.50:1. 
C)  $5000 and .90:1. 
D)  ($5000) and .90:1.

Question 10

The interest charged on a $225000 note payable at the rate of 8% on a 3-month note would be

Accepted Answer

A)  $18000. 
B)  $9000. 
C)  $4500. 
D)  $3000. 
A)  $18000. 
B)  $9000. 
C)  $4500. 
D)  $3000.

Question 11

A current liability is a debt the company reasonably expects to pay from existing current assets within

Accepted Answer

A)  one year. 
B)  the operating cycle. 
C)  one year or the operating cycle whichever is longer. 
D)  one year or the operating cycle whichever is shorter. 
A)  one year. 
B)  the operating cycle. 
C)  one year or the operating cycle whichever is longer. 
D)  one year or the operating cycle whichever is shorter.

Question 12

A current liability must be paid out of current earnings.

Accepted Answer

A) True 
 B)False

Question 13

Identify which of the following would be classified as current liabilities as of December 31 2016:
1. Salaries and Wages Payable
2. Bonds Payable maturing in 2021
3. Interest Payable due July 1 2017
4. Sales Taxes Payable
5. Notes Payable due January 30 2018

Accepted Answer

Current liabilities

Question 14

The relationship between current liabilities and current assets is important in evaluating a company's ability to pay off its long-term debt.

Accepted Answer

A) True 
 B)False

Question 15

The current ratio is current assets divided by ______________.

Accepted Answer

The answer of The current ratio is current assets divided...

Question 16

The tax that is paid equally by the employer and employee is the

Accepted Answer

A)  federal income tax. 
B)  federal unemployment tax. 
C)  state unemployment tax. 
D)  FICA tax. 
A)  federal income tax. 
B)  federal unemployment tax. 
C)  state unemployment tax. 
D)  FICA tax.

Question 17

The entry to record the issuance of an interest-bearing note credits Notes Payable for the note's

Accepted Answer

A)  maturity value. 
B)  market value. 
C)  face value. 
D)  cash realizable value. 
A)  maturity value. 
B)  market value. 
C)  face value. 
D)  cash realizable value.

Question 18

Advances from customers are classified as a(n)

Accepted Answer

A)  revenue. 
B)  expense. 
C)  current asset. 
D)  current liability. 
A)  revenue. 
B)  expense. 
C)  current asset. 
D)  current liability.

Question 19

Liabilities are classified on the balance sheet as current or

Accepted Answer

A)  deferred. 
B)  unearned. 
C)  long-term. 
D)  accrued. 
A)  deferred. 
B)  unearned. 
C)  long-term. 
D)  accrued.

Question 20

The relationship of current assets to current liabilities is used in evaluating a company's

Accepted Answer

A)  operating cycle. 
B)  revenue-producing ability. 
C)  short-term debt paying ability. 
D)  long-range solvency. 
A)  operating cycle. 
B)  revenue-producing ability. 
C)  short-term debt paying ability. 
D)  long-range solvency.

Exam 11: Current Liabilities and Payroll Accounting

Liabilities are classified on the balance sheet as being _______________ liabilities or ______________ liabilities.

Internal control over payroll is not necessary because employees will complain if they do not receive the correct amount on their payroll checks.

Which one of the following payroll taxes is not withheld from an employee's wages because it is not levied on the employee?

Most companies involved in interstate commerce are required to compute overtime at

A payroll tax expense which is borne entirely by the employer is the federal _______________ tax.

The amount of sales tax collected by a retail store when making sales is

A contingency need not be recorded nor disclosed when

Monkee's Company has current assets of $45000 current liabilities of $50000 long-term assets of $90000 and long-term liabilities of $40000. Monkee's Company's working capital and its current ratio are:

The interest charged on a $225000 note payable at the rate of 8% on a 3-month note would be

A current liability is a debt the company reasonably expects to pay from existing current assets within

A current liability must be paid out of current earnings.

Identify which of the following would be classified as current liabilities as of December 31 2016: 1. Salaries and Wages Payable 2. Bonds Payable maturing in 2021 3. Interest Payable due July 1 2017 4. Sales Taxes Payable 5. Notes Payable due January 30 2018

The relationship between current liabilities and current assets is important in evaluating a company's ability to pay off its long-term debt.

The current ratio is current assets divided by ______________.

The tax that is paid equally by the employer and employee is the

The entry to record the issuance of an interest-bearing note credits Notes Payable for the note's

Advances from customers are classified as a(n)

Liabilities are classified on the balance sheet as current or

The relationship of current assets to current liabilities is used in evaluating a company's

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

Liabilities are classified on the balance sheet as being _ liabilities or liabilities.