Question 1

An employer's federal unemployment taxes (FUTA)are reported:

Accepted Answer

A) Annually. 
B) Semiannually. 
C) Quarterly. 
D) Monthly. 
E) Weekly. 
A) Annually. 
B) Semiannually. 
C) Quarterly. 
D) Monthly. 
E) Weekly.

Question 2

Known liabilities are obligations set by agreements,contracts,or laws,and are measurable and definitely determinable.

Accepted Answer

A) True 
 B)False

Question 3

Estimated liabilities commonly arise from:

Accepted Answer

A) Warranties. 
B) Vacation benefits. 
C) Income taxes. 
D) Employee benefits. 
E) All of the choices are correct. 
A) Warranties. 
B) Vacation benefits. 
C) Income taxes. 
D) Employee benefits. 
E) All of the choices are correct.

Question 4

A table that shows the amount of federal income tax to be withheld from an employee's pay is the:

Accepted Answer

A) Form 941. 
B) Tax table. 
C) Wage bracket withholding table. 
D) W-2. 
E) W-4. 
A) Form 941. 
B) Tax table. 
C) Wage bracket withholding table. 
D) W-2. 
E) W-4.

Question 5

An estimated liability:

Accepted Answer

A) Is an unknown liability of a certain amount. 
B) Is a known obligation of an uncertain amount that can be reasonably estimated. 
C) Is a liability that may occur if a future event occurs. 
D) Can be the result of a lawsuit. 
E) Is not recorded until the amount is known for certain. 
A) Is an unknown liability of a certain amount. 
B) Is a known obligation of an uncertain amount that can be reasonably estimated. 
C) Is a liability that may occur if a future event occurs. 
D) Can be the result of a lawsuit. 
E) Is not recorded until the amount is known for certain.

Question 6

The times interest earned computation is:

Accepted Answer

A) (Net income + Interest expense + Income taxes)/Interest expense. 
B) (Net income + Interest expense - Income taxes)/Interest expense. 
C) (Net income - Interest expense - Income taxes)/Interest expense. 
D) (Net income - Interest expense + Income taxes)/Interest expense. 
E) Interest expense/(Net income + Interest expense + Income taxes expense). 
A) (Net income + Interest expense + Income taxes)/Interest expense. 
B) (Net income + Interest expense - Income taxes)/Interest expense. 
C) (Net income - Interest expense - Income taxes)/Interest expense. 
D) (Net income - Interest expense + Income taxes)/Interest expense. 
E) Interest expense/(Net income + Interest expense + Income taxes expense).

Question 7

A single liability can be divided between current and noncurrent liabilities.

Accepted Answer

A) True 
 B)False

Question 8

Employers must keep certain payroll records,including individual earnings reports for each employee.

Accepted Answer

A) True 
 B)False

Question 9

____________________ are banks authorized to accept deposits of amounts payable to the federal government,including amounts due for payroll taxes.

Accepted Answer

Federal de

Question 10

A company's fixed interest expense is $8,000,its income before interest expense and income taxes is $32,000.Its net income is $9,600.The company's times interest earned ratio equals:

Accepted Answer

A) 0.25. 
B) 0.30. 
C) 0.83. 
D) 3.33. 
E) 4.0. 
A) 0.25. 
B) 0.30. 
C) 0.83. 
D) 3.33. 
E) 4.0.

Question 11

All expected future payments are liabilities.

Accepted Answer

A) True 
 B)False

Question 12

Obligations not expected to be paid within the longer of one year or the company's operating cycle are reported as:

Accepted Answer

A) Current assets. 
B) Current liabilities. 
C) Long-term liabilities. 
D) Operating cycle liabilities. 
E) Bills. 
A) Current assets. 
B) Current liabilities. 
C) Long-term liabilities. 
D) Operating cycle liabilities. 
E) Bills.

Question 13

The state unemployment tax rates applied to an employer are adjusted according to an employer's merit rating.

Accepted Answer

A) True 
 B)False

Question 14

Debt guarantees are not usually disclosed as a contingent liability.

Accepted Answer

A) True 
 B)False

Question 15

A company sells computers at a selling price of $1,800 each.Each computer has a 2 year warranty that covers replacement of defective parts.It is estimated that 2% of all computers sold will be returned under the warranty at an average cost of $150 each.During November,the company sold 30,000 computers,and 400 computers were serviced under the warranty at a total cost of $55,000.The balance in the Estimated Warranty Liability account at November 1 was $29,000.What is the company's warranty expense for the month of November?

Accepted Answer

A) $26,000 
B) $45,000 
C) $55,000 
D) $60,000 
E) $90,000 
A) $26,000 
B) $45,000 
C) $55,000 
D) $60,000 
E) $90,000

Question 16

A company has 90 employees and a weekly payroll of $117,000.The FICA-social security tax rate is 6.2% and the FICA-Medicare tax rate is 1.45%.The total withholding for federal income tax is $16,500 for the current week.Calculate the amount of FICA taxes owed (assuming no employee's salary is over the FICA limit)and prepare the journal entry to accrue this week's salaries expense and withholdings.

Accepted Answer

The answer of A company has 90 employees and a...

Question 17

Debt guarantees:

Accepted Answer

A) Are never disclosed in the financial statements. 
B) Are considered to be a contingent liability. 
C) Are a bad business practice. 
D) Are recorded as a liability even though it is highly unlikely that the original debtor will default. 
E) All of the choices are correct. 
A) Are never disclosed in the financial statements. 
B) Are considered to be a contingent liability. 
C) Are a bad business practice. 
D) Are recorded as a liability even though it is highly unlikely that the original debtor will default. 
E) All of the choices are correct.

Question 18

Promissory notes are nonnegotiable meaning that they cannot be transferred from party to party.

Accepted Answer

A) True 
 B)False

Question 19

A company sold $12,000 worth of trampolines with an extended warranty.It estimates that 2% of these sales will result in warranty work.The company should:

Accepted Answer

A) Consider the warranty expense a remote liability since the rate is only 2%. 
B) Recognize warranty expense at the time the warranty work is performed. 
C) Recognize warranty expense and liability in the year of the sale. 
D) Consider the warranty expense a contingent liability. 
E) Recognize warranty liability when the company purchases the trampolines. 
A) Consider the warranty expense a remote liability since the rate is only 2%. 
B) Recognize warranty expense at the time the warranty work is performed. 
C) Recognize warranty expense and liability in the year of the sale. 
D) Consider the warranty expense a contingent liability. 
E) Recognize warranty liability when the company purchases the trampolines.

Question 20

The amount of federal income tax withheld depends on the employee's annual earnings rate and the number of withholding allowances claimed by the employee.

Accepted Answer

A) True 
 B)False

Exam 11: Current Liabilities and Payroll Accounting

An employer's federal unemployment taxes (FUTA)are reported:

Known liabilities are obligations set by agreements,contracts,or laws,and are measurable and definitely determinable.

Estimated liabilities commonly arise from:

A table that shows the amount of federal income tax to be withheld from an employee's pay is the:

An estimated liability:

The times interest earned computation is:

A single liability can be divided between current and noncurrent liabilities.

Employers must keep certain payroll records,including individual earnings reports for each employee.

____________________ are banks authorized to accept deposits of amounts payable to the federal government,including amounts due for payroll taxes.

A company's fixed interest expense is $8,000,its income before interest expense and income taxes is $32,000.Its net income is $9,600.The company's times interest earned ratio equals:

All expected future payments are liabilities.

Obligations not expected to be paid within the longer of one year or the company's operating cycle are reported as:

The state unemployment tax rates applied to an employer are adjusted according to an employer's merit rating.

Debt guarantees are not usually disclosed as a contingent liability.

Debt guarantees:

Promissory notes are nonnegotiable meaning that they cannot be transferred from party to party.

A company sold $12,000 worth of trampolines with an extended warranty.It estimates that 2% of these sales will result in warranty work.The company should:

The amount of federal income tax withheld depends on the employee's annual earnings rate and the number of withholding allowances claimed by the employee.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, natural Resources, and Intangibles

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Time Value of Money B

Activity-Based Costing C

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