Question 1

The current ratio permits analysts to compare the liquidity of different sized companies.

Accepted Answer

A) True 
 B)False

Question 2

Flott Company has ten employees who each earn $160 per day. If they accumulate vacation time at the rate of 1.5 vacation days for each month worked, the amount of vacation benefits that should be accrued at the end of the month is

Accepted Answer

A)  $160. 
B)  $1,600. 
C)  $2,400. 
D)  $240. 
A)  $160. 
B)  $1,600. 
C)  $2,400. 
D)  $240.

Question 3

Companies report current liabilities on the balance sheet in

Accepted Answer

A)  alphabetical order. 
B)  order of maturity. 
C)  random order. 
D)  order of magnitude. 
A)  alphabetical order. 
B)  order of maturity. 
C)  random order. 
D)  order of magnitude.

Question 4

A debt that is expected to be paid within one year through the creation of long-term debt is a current liability.

Accepted Answer

A) True 
 B)False

Question 5

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.

Question 6

The interest charged on a $100,000 note payable, at the rate of 8%, on a 90-day note would be

Accepted Answer

A)  $8,000. 
B)  $4,444. 
C)  $2,000. 
D)  $667. 
A)  $8,000. 
B)  $4,444. 
C)  $2,000. 
D)  $667.

Question 7

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 8

Sales taxes collected from customers are a ______________ of the business until they are remitted to the taxing agency.

Accepted Answer

The answer of Sales taxes collected from customers are a...

Question 9

Which of the following payroll taxes are usually filed and remitted annually?

Accepted Answer

A)  Federal unemployment taxes 
B)  FICA taxes 
C)  State unemployment taxes 
D)  Federal and state unemployment taxes 
A)  Federal unemployment taxes 
B)  FICA taxes 
C)  State unemployment taxes 
D)  Federal and state unemployment taxes

Question 10

Notes payable are often used instead of accounts payable.

Accepted Answer

A) True 
 B)False

Question 11

By January 31 following the end of a calendar year, an employer is required to provide each employee with a(n)

Accepted Answer

A)  state unemployment tax form. 
B)  federal unemployment tax form 940. 
C)  wage and tax statement form W-2. 
D)  employee's withholding allowance certificate form W-4. 
A)  state unemployment tax form. 
B)  federal unemployment tax form 940. 
C)  wage and tax statement form W-2. 
D)  employee's withholding allowance certificate form W-4.

Question 12

Jim's Pharmacy has collected $600 in sales taxes during March. If sales taxes must be remitted to the state government monthly, what entry will Jim's Pharmacy make to show the March remittance?

Accepted Answer

The answer of Jim's Pharmacy has collected $600 in sales...

Question 13

Oakley Company does not ring up sales taxes separately on the cash register. Total receipts for February amounted to $28,600. If the sales tax rate is 4%, what amount must be remitted to the state for February's sales taxes?

Accepted Answer

A)  $1,144 
B)  $1,100 
C)  $1,716 
D)  It cannot be determined. 
A)  $1,144 
B)  $1,100 
C)  $1,716 
D)  It cannot be determined.

Question 14

Reliable Insurance Company collected a premium of $15,000 for a 1-year insurance policy on May 1. What amount should Reliable report as a current liability for Unearned Insurance Premiums at December 31?

Accepted Answer

A)  $0. 
B)  $5,000. 
C)  $10,000. 
D)  $15,000. 
A)  $0. 
B)  $5,000. 
C)  $10,000. 
D)  $15,000.

Question 15

During December 2010, Markowitz Publishing sold 2,500 12-month annual magazine subscriptions at a rate of $30 each. The first issues were mailed in February 2011. Prepare the entries on Markowitz's books to record the sale of the subscriptions and the mailing of the first issues.

Accepted Answer

The answer of During December 2010, Markowitz Publishing sold 2,500...

Question 16

On December 1, Yung Company introduces a new product that includes a one-year warranty on parts. In December, 500 units are sold. Management believes that 5% of the units will be defective and that the average warranty costs will be $60 per unit. Prepare the adjusting entry at December 31 to accrue the estimated warranty cost.

Accepted Answer

The answer of On December 1, Yung Company introduces a...

Question 17

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 18

Hibbett Company does not segregate sales and sales taxes on its cash register. Its register total for the month is $259,700, which includes a 6% sales tax.
Instructions
Compute sales taxes payable, and make the entry to record sales and sales taxes payable.

Accepted Answer

Sales taxes payable

Question 19

The entry to record the proceeds upon issuing an interest-bearing note is

Accepted Answer

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

Question 20

Admire County Bank agrees to lend Givens Brick Company $200,000 on January 1. Givens Brick Company signs a $200,000, 8%, 9-month note. The entry made by Givens Brick Company on January 1 to record the proceeds and issuance of the note is

Accepted Answer

The answer of Admire County Bank agrees to lend Givens...

Exam 11: Current Liabilities and Payroll Accounting

The current ratio permits analysts to compare the liquidity of different sized companies.

Flott Company has ten employees who each earn $160 per day. If they accumulate vacation time at the rate of 1.5 vacation days for each month worked, the amount of vacation benefits that should be accrued at the end of the month is

Companies report current liabilities on the balance sheet in

A debt that is expected to be paid within one year through the creation of long-term debt is a current liability.

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

The interest charged on a $100,000 note payable, at the rate of 8%, on a 90-day note would be

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

Sales taxes collected from customers are a ______________ of the business until they are remitted to the taxing agency.

Which of the following payroll taxes are usually filed and remitted annually?

Notes payable are often used instead of accounts payable.

By January 31 following the end of a calendar year, an employer is required to provide each employee with a(n)

Jim's Pharmacy has collected $600 in sales taxes during March. If sales taxes must be remitted to the state government monthly, what entry will Jim's Pharmacy make to show the March remittance?

Oakley Company does not ring up sales taxes separately on the cash register. Total receipts for February amounted to $28,600. If the sales tax rate is 4%, what amount must be remitted to the state for February's sales taxes?

Reliable Insurance Company collected a premium of $15,000 for a 1-year insurance policy on May 1. What amount should Reliable report as a current liability for Unearned Insurance Premiums at December 31?

During December 2010, Markowitz Publishing sold 2,500 12-month annual magazine subscriptions at a rate of $30 each. The first issues were mailed in February 2011. Prepare the entries on Markowitz's books to record the sale of the subscriptions and the mailing of the first issues.

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

Hibbett Company does not segregate sales and sales taxes on its cash register. Its register total for the month is $259,700, which includes a 6% sales tax. Instructions Compute sales taxes payable, and make the entry to record sales and sales taxes payable.

The entry to record the proceeds upon issuing an interest-bearing note is

Admire County Bank agrees to lend Givens Brick Company $200,000 on January 1. Givens Brick Company signs a $200,000, 8%, 9-month note. The entry made by Givens Brick Company on January 1 to record the proceeds and issuance of the note 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