Question 1

When an interest-bearing note matures, the balance in the Notes Payable account is

Accepted Answer

A)  less than the total amount repaid by the borrower. 
B)  the difference between the maturity value of the note and the face value of the note. 
C)  equal to the total amount repaid by the borrower. 
D)  greater than the total amount repaid by the borrower. 
A)  less than the total amount repaid by the borrower. 
B)  the difference between the maturity value of the note and the face value of the note. 
C)  equal to the total amount repaid by the borrower. 
D)  greater than the total amount repaid by the borrower. A

Question 2

A note payable is in the form of

Accepted Answer

A)  a contingency that is reasonably likely to occur. 
B)  a written promissory note. 
C)  an oral agreement. 
D)  a standing agreement. 
A)  a contingency that is reasonably likely to occur. 
B)  a written promissory note. 
C)  an oral agreement. 
D)  a standing agreement. B

Question 3

Disclosure of a contingent liability is usually made

Accepted Answer

A)  parenthetically, in the body of the balance sheet. 
B)  parenthetically, in the body of the income statement. 
C)  in a note to the financial statements. 
D)  in the management discussion section of the financial statement. 
A)  parenthetically, in the body of the balance sheet. 
B)  parenthetically, in the body of the income statement. 
C)  in a note to the financial statements. 
D)  in the management discussion section of the financial statement. C

Question 4

A note payable must always be paid before an account payable.

Accepted Answer

A) True 
 B)False

Question 5

Judy Reber's regular hourly wage rate is $12, and she receives an hourly rate of $18 for work in excess of 40 hours. During a March pay period, Judy works 47 hours. Judy's federal income tax withholding is $70, and she has no voluntary deductions. Prepare the journal entry to record Judy's pay for the period. Use March 15 for the end of the pay period.

Accepted Answer

The answer of Judy Reber's regular hourly wage rate is...

Question 6

Obligations in written form are called ______________ and usually require the borrower to pay interest.

Accepted Answer

The answer of Obligations in written form are called ______________...

Question 7

The accounting for warranty costs is based on the

Accepted Answer

A)  going concern principle. 
B)  matching principle. 
C)  conservatism principle. 
D)  objectivity principle. 
A)  going concern principle. 
B)  matching principle. 
C)  conservatism principle. 
D)  objectivity principle.

Question 8

Shaw Company sells 2,000 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 40 units for a total cost of $2,000. What amount will be reported on Shaw Company's balance sheet as Estimated Warranty Liability on December 31, 2010?

Accepted Answer

A)  $2,000 
B)  $3,000 
C)  $1,000 
D)  It cannot be determined. 
A)  $2,000 
B)  $3,000 
C)  $1,000 
D)  It cannot be determined.

Question 9

A contingent liability should be recorded in the accounts if it is ______________ that the contingency will occur and the amount is ______________.

Accepted Answer

probable,

Question 10

Sales taxes collected by a retailer are recorded by

Accepted Answer

A)  crediting Sales Taxes Revenue. 
B)  debiting Sales Taxes Expense. 
C)  crediting Sales Taxes Payable. 
D)  debiting Sales Taxes Payable. 
A)  crediting Sales Taxes Revenue. 
B)  debiting Sales Taxes Expense. 
C)  crediting Sales Taxes Payable. 
D)  debiting Sales Taxes Payable.

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Contingent liabilities should be recorded in the accounts if there is a remote possibility that the contingency will actually occur.

Accepted Answer

A) True 
 B)False

Question 13

Julie's Boutique has total receipts for the month of $29,295 including sales taxes. If the sales tax rate is 5%, what are Julie's sales for the month?

Accepted Answer

A)  $27,831 
B)  $27,900 
C)  $29,295 
D)  It cannot be determined. 
A)  $27,831 
B)  $27,900 
C)  $29,295 
D)  It cannot be determined.

Question 14

Wellington Company had the following transactions involving notes payable.
Nov. 1, 2010 Borrows $90,000 from Olathe State Bank by signing a 3-month, 10% note.
Dec. 31, 2010 Prepares the adjusting entry.
Feb. 1, 2011 Pays principal and interest to Olathe State Bank.
Instructions
Prepare journal entries for each of the transactions.

Accepted Answer

The answer of Wellington Company had the following transactions involving...

Question 15

Flores Company publishes a monthly sports magazine, Hunting Preview. Subscriptions to the magazine cost $20 per year. During October 2010, Flores sells 18,000 subscriptions beginning with the November issue. Flores prepares financial statements quarterly and recognizes subscription revenue earned at the end of the quarter. The company uses the accounts Unearned Subscriptions and Subscription Revenue.
Instructions
(a) Prepare the entry in October for the receipt of the subscriptions.
(b) Prepare the adjusting entry at December 31, 2010, to record subscription revenue earned in December 2010.
(c) Prepare the adjusting entry at March 31, 2011, to record subscription revenue earned in the first quarter of 2011.

Accepted Answer

The answer of Flores Company publishes a monthly sports magazine,...

Question 16

In March, gross earnings of Ransey Company totaled $150,000. All earnings are subject to FICA taxes, 5.4% state unemployment taxes, and 0.8% federal unemployment taxes.
Instructions
(a) Compute the employer's payroll tax expense.
(b) Prepare the entry to record payroll taxes.

Accepted Answer

The answer of In March, gross earnings of Ransey Company...

Question 17

The following totals for the month of April were taken from the payroll register of Kirk Company.   The entry to record the payment of net payroll would include a

Accepted Answer

A)  debit to Salaries Payable for $16,504. 
B)  debit to Salaries Payable for $17,000. 
C)  debit to Salaries Payable for $15,900. 
D)  credit to Cash for $18,100. 
A)  debit to Salaries Payable for $16,504. 
B)  debit to Salaries Payable for $17,000. 
C)  debit to Salaries Payable for $15,900. 
D)  credit to Cash for $18,100.

Question 18

Current liabilities generally appear

Accepted Answer

A)  after long-term debt on the balance sheet. 
B)  in decreasing order of magnitude on the balance sheet. 
C)  in order of maturity on the balance sheet. 
D)  in increasing order of magnitude on the balance sheet. 
A)  after long-term debt on the balance sheet. 
B)  in decreasing order of magnitude on the balance sheet. 
C)  in order of maturity on the balance sheet. 
D)  in increasing order of magnitude on the balance sheet.

Question 19

Which one of the following is shown first under current liabilities by many companies as a matter of custom?

Accepted Answer

A)  Accrued expenses 
B)  Current maturities of long-term debt 
C)  Sales taxes payable 
D)  Notes payable and accounts payable 
A)  Accrued expenses 
B)  Current maturities of long-term debt 
C)  Sales taxes payable 
D)  Notes payable and accounts payable

Question 20

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.

Exam 11: Current Liabilities and Payroll Accounting

When an interest-bearing note matures, the balance in the Notes Payable account is

A note payable is in the form of

Disclosure of a contingent liability is usually made

A note payable must always be paid before an account payable.

Obligations in written form are called ______________ and usually require the borrower to pay interest.

The accounting for warranty costs is based on the

A contingent liability should be recorded in the accounts if it is ______________ that the contingency will occur and the amount is ______________.

Sales taxes collected by a retailer are recorded by

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

Contingent liabilities should be recorded in the accounts if there is a remote possibility that the contingency will actually occur.

Julie's Boutique has total receipts for the month of $29,295 including sales taxes. If the sales tax rate is 5%, what are Julie's sales for the month?

In March, gross earnings of Ransey Company totaled $150,000. All earnings are subject to FICA taxes, 5.4% state unemployment taxes, and 0.8% federal unemployment taxes. Instructions (a) Compute the employer's payroll tax expense. (b) Prepare the entry to record payroll taxes.

The following totals for the month of April were taken from the payroll register of Kirk Company. The entry to record the payment of net payroll would include a

Current liabilities generally appear

Which one of the following is shown first under current liabilities by many companies as a matter of custom?

The relationship between current liabilities and current assets is

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 Analysis: the Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Filters

A contingent liability should be recorded in the accounts if it is that the contingency will occur and the amount is .