Question 1

Interest expense on a note payable is only recorded at maturity.

Accepted Answer

A) True 
 B)False

Question 2

Lulzbot.com sells 6000 units of its product for $500 each. The selling price includes a one-year warranty on parts. It is expected that 3% of the units will be defective and that repair costs will average $50 per unit. In the year of sale warranty contracts are honored on 120 units for a total cost of $6000. What amount should Lulzbot.com accrue on December 31 for estimated warranty costs?

Accepted Answer

A)  $9000 
B)  $6000 
C)  $3000 
D)  $45000 
A)  $9000 
B)  $6000 
C)  $3000 
D)  $45000

Question 3

The employer incurs a payroll tax expense equal to the amount contributed by each employee for ______________ taxes.

Accepted Answer

The answer of The employer incurs a payroll tax expense...

Question 4

Southern Foodie Company typically sells subscriptions on an annual basis and publishes six times a year. The magazine sells 80000 subscriptions in January at $30 each. What entry is made in January to record the sale of the subscriptions? a. 
$\begin{array}{lrr}
  \text { Subscriptions Receivable } &2,400,000\
 \text {Subscription Revenue  } &&2,400,000\
\end{array}$

b. 
$\begin{array}{lrr}
  \text {Cash  } &2,400,000\
 \text {Unearned Subscription Revenue  } &&2,400,000\
\end{array}$

c. 
$\begin{array}{lrr}
  \text { Subscriptions Receivable } &400,000\
 \text {Unearned Subscription Revenue  } &&400,000\
\end{array}$

d. 
$\begin{array}{lrr}
  \text {  Prepaid Subscriptions} &2,400,000\
 \text { Cash } &&2,400,000\
\end{array}$

Accepted Answer

The answer of Southern Foodie Company typically sells subscriptions on...

Question 5

Employee earnings records for Oz Company reveal the following gross earnings for four employees through the pay period of December 15. $$\begin{array} { l l l l } 
\text { T. Tucker } & \$ 95,500 & \text { D. Paiva } & \$ 115,500 \
\text { B. Bitney } & \$ 114,200 & \text { N. Doane } & \$ 118,000
\end{array}$$ For the pay period ending December 31 each employee's gross earnings is $4800. The FICA tax rate is 7.65% on gross earnings of $117000.
Instructions
Compute the FICA withholdings that should be made for each employee for the December 31 pay period. (Show computations.)

Accepted Answer

T. Tucker@#LAT-DLM& @#LAT-DLM&. Tucker's total gross earning

Question 6

The human resources department documents and authorizes employment of new employees.

Accepted Answer

A) True 
 B)False

Question 7

Two federal taxes which are levied against employees' wages that must be deducted in arriving at net pay are (1)______________ taxes and (2)______________ taxes.

Accepted Answer

The answer of Two federal taxes which are levied against...

Question 8

The following totals for the month of April were taken from the payroll register of Asplend Company. $$\begin{array} { l r } 
\text { Salaries and wages } & \$ 72,000 \
\text { FICA taxes withheld } & 5,508 \
\text { Income taxes withheld } & 15,000 \
\text { Medical insurance deductions } & 2,700 \
\text { Federal unemployment taxes } & 192 \
\text { State unemployment taxes } & 1,296
\end{array}$$ The journal entry to record the monthly payroll on April 30 would include a

Accepted Answer

A)  debit to Salaries and Wages Expense for $72000. 
B)  credit to Salaries and Wages Payable for $72000. 
C)  debit to Salaries and Wages Payable for $72000. 
D)  debit to Salaries and Wages Expense for $51000. 
A)  debit to Salaries and Wages Expense for $72000. 
B)  credit to Salaries and Wages Payable for $72000. 
C)  debit to Salaries and Wages Payable for $72000. 
D)  debit to Salaries and Wages Expense for $51000.

Question 9

Jason Gomi has worked 44 hours this week. He worked in excess of 8 hours each day. His regular hourly wage is $9 per hour. What are Jason's gross wages for the week? (The company Jan works for is in compliance with the Fair Labor Standards Act.)

Accepted Answer

A)  $396 
B)  $414 
C)  $594 
D)  $432 
A)  $396 
B)  $414 
C)  $594 
D)  $432

Question 10

The interest charged on a $50000 note payable at the rate of 6% on a 60-day note would be

Accepted Answer

A)  $3000. 
B)  $1667. 
C)  $750. 
D)  $500. 
A)  $3000. 
B)  $1667. 
C)  $750. 
D)  $500.

Question 11

On December 1 Maisins Furniture Corporation borrowed $10000 on a 90-day 6% note. Prepare the entries to record the issuance of the note the accrual of interest at year end and the payment of the note.

Accepted Answer

None

Question 12

Interest expense on an interest-bearing note is

Accepted Answer

A)  always equal to zero. 
B)  accrued over the life of the note. 
C)  only recorded at the time the note is issued. 
D)  only recorded at maturity when the note is paid. 
A)  always equal to zero. 
B)  accrued over the life of the note. 
C)  only recorded at the time the note is issued. 
D)  only recorded at maturity when the note is paid.

Question 13

Massimini Company had the following payroll data for the year: $\begin{array}{lr}
\text { Gross earnings of employees } & \$ 740,000 \
\text { Employee earnings not subject to Social Security tax } & 140,000 \
\text { Employee earnings not subject to FUTA or SUTA tax } & 490,000
\end{array}$

Assuming the following:
$\begin{array}{lrl}
\text { FICA tax rate on first } \$ 117,000 & 7.65 \% \text { (1.45\% over } \
\$ 117,000) & \
\text { State Unemployment tax rate } & 5.4 \% \quad \text { (SUTA) } \
\text { Federal Unemplovment tax rate } & 8 \% \text { (FUTA) }
\end{array}$ Instructions
Compute Massimini's payroll tax expense for the year. Make a summary journal entry to record the payroll tax expense.

Accepted Answer

The answer of Massimini Company had the following payroll data...

Question 14

Which of the following is usually not an accrued liability?

Accepted Answer

A)  Interest payable 
B)  Wages payable 
C)  Taxes payable 
D)  Notes payable 
A)  Interest payable 
B)  Wages payable 
C)  Taxes payable 
D)  Notes payable

Question 15

The following totals for the month of June were taken from the payroll register of Ford Company. $$\begin{array} { l r } 
\text { Salaries and wages } & \$ 80,000 \
\text { FICA taxes withheld } & 6,132 \
\text { Income taxes withheld } & 17,600 \
\text { Medical insurance deductions } & 3,200 \
\text { Federal unemployment taxes } & 640 \
\text { State unemployment taxes } & 4,000
\end{array}$$ The entry to record the accrual of federal unemployment taxes would include a

Accepted Answer

A)  credit to Federal Unemployment Taxes Payable for $640. 
B)  credit to Federal Unemployment Taxes Expense for $640. 
C)  credit to Payroll Tax Expense for $640. 
D)  debit to Federal Unemployment Taxes Payable for $640. 
A)  credit to Federal Unemployment Taxes Payable for $640. 
B)  credit to Federal Unemployment Taxes Expense for $640. 
C)  credit to Payroll Tax Expense for $640. 
D)  debit to Federal Unemployment Taxes Payable for $640.

Question 16

Schweigert Paint Company which prepares annual financial statements is preparing adjusting entries on December 31. Analysis indicates the following:
1. The company is the defendant in an employee discrimination lawsuit involving $50000 of damages. Legal counsel believes it is unlikely that the company will have to pay any damages.
2. December 31st is a Friday. The employees of the company have been paid on Monday December 27th for the previous week which ended on Friday December 24th. The company employs 30 people who earn $100 per day and 15 people who earn $160 per day. All employees work 5-day weeks.
3. The company is a defendant in a $500000 product liability lawsuit. Legal counsel believes the company probably will have to pay the amount requested.
4. Employees are entitled to one day's vacation for each month worked. All employees described above in (2.) worked the month of December.
Instructions
Prepare any adjusting entries necessary at the end of the year.

Accepted Answer

1. No entr

Question 17

Maple Street Bookstore has collected $1500 in sales taxes during April. If sales taxes must be remitted to the state government monthly what entry will Maple Street Bookstore make to show the April remittance? a. 
$\begin{array}{lrr}
  \text { Sales Taxes Payable } &1,500\
 \text { Cash } &&1,500\
\end{array}$

b.
$\begin{array}{lrr}
  \text { Sales Tax Expense  } &1,500\
 \text { Cash } &&1,500\
\end{array}$

c. 
$\begin{array}{lrr}
  \text { Sales Tax Expense  } &1,500\
 \text { Sales Taxes Payable } &&1,500\
\end{array}$

d. $\text {No entry required.}$

Accepted Answer

The answer of Maple Street Bookstore has collected $1500 in...

Question 18

Warranty expenses are reported on the income statement as

Accepted Answer

A)  administrative expenses. 
B)  part of cost of goods sold. 
C)  contra-revenues. 
D)  selling expenses. 
A)  administrative expenses. 
B)  part of cost of goods sold. 
C)  contra-revenues. 
D)  selling expenses.

Question 19

Interest expense is reported under Other Expenses and Losses in the income statement.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A)  credit to Federal Unemployment Taxes Payable for $192. 
B)  debit to Federal Unemployment Taxes Expense for $192. 
C)  credit to Payroll Tax Expense for $192. 
D)  debit to Federal Unemployment Taxes Payable for $192 
A)  credit to Federal Unemployment Taxes Payable for $192. 
B)  debit to Federal Unemployment Taxes Expense for $192. 
C)  credit to Payroll Tax Expense for $192. 
D)  debit to Federal Unemployment Taxes Payable for $192

Interest expense on a note payable is only recorded at maturity.

The employer incurs a payroll tax expense equal to the amount contributed by each employee for ______________ taxes.

The human resources department documents and authorizes employment of new employees.

Two federal taxes which are levied against employees' wages that must be deducted in arriving at net pay are (1) taxes and (2) taxes.

Jason Gomi has worked 44 hours this week. He worked in excess of 8 hours each day. His regular hourly wage is $9 per hour. What are Jason's gross wages for the week? (The company Jan works for is in compliance with the Fair Labor Standards Act.)

The interest charged on a $50000 note payable at the rate of 6% on a 60-day note would be

On December 1 Maisins Furniture Corporation borrowed $10000 on a 90-day 6% note. Prepare the entries to record the issuance of the note the accrual of interest at year end and the payment of the note.

Interest expense on an interest-bearing note is

Which of the following is usually not an accrued liability?

Warranty expenses are reported on the income statement as

Interest expense is reported under Other Expenses and Losses in the income statement.

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

Exam 11: Current Liabilities and Payroll Accounting

Interest expense on a note payable is only recorded at maturity.

The employer incurs a payroll tax expense equal to the amount contributed by each employee for ______________ taxes.

The human resources department documents and authorizes employment of new employees.

Two federal taxes which are levied against employees' wages that must be deducted in arriving at net pay are (1)______________ taxes and (2)______________ taxes.

Jason Gomi has worked 44 hours this week. He worked in excess of 8 hours each day. His regular hourly wage is $9 per hour. What are Jason's gross wages for the week? (The company Jan works for is in compliance with the Fair Labor Standards Act.)

The interest charged on a $50000 note payable at the rate of 6% on a 60-day note would be

On December 1 Maisins Furniture Corporation borrowed $10000 on a 90-day 6% note. Prepare the entries to record the issuance of the note the accrual of interest at year end and the payment of the note.

Interest expense on an interest-bearing note is

Which of the following is usually not an accrued liability?

Warranty expenses are reported on the income statement as

Interest expense is reported under Other Expenses and Losses in the income statement.

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

Two federal taxes which are levied against employees' wages that must be deducted in arriving at net pay are (1) taxes and (2) taxes.