Question 1

Short-term notes payable:

Accepted Answer

A) Can replace an account payable. 
B) Can be issued in return for money borrowed from a bank. 
C) Are negotiable. 
D) Are an unconditional promise to pay. 
E) All of the choices are correct. 
A) Can replace an account payable. 
B) Can be issued in return for money borrowed from a bank. 
C) Are negotiable. 
D) Are an unconditional promise to pay. 
E) All of the choices are correct.

Question 2

Employer payroll taxes are an added employee _______________ beyond the wages and salaries earned by the employees.

Accepted Answer

The answer of Employer payroll taxes are an added employee...

Question 3

On December 1,Gates Company borrowed $45,000 cash from FirstBank by signing a 90-day,9% note payable.
a.Prepare Gate's journal entry to record the issuance of the note payable.
b.Prepare Gate's journal entry to record the accrued interest due at December 31.
c.Prepare Gate's journal entry to record the payment of the note on March 1 of the next year.

Accepted Answer

a. 12/1 Cash……………………………………………... 45,000

Question 4

Arena Company's salaried employees earn two weeks of vacation per year.It pays $858,000 in total employee salaries for 52 weeks but its employees work only 50.Record Arena Company's weekly journal entry to record the vacation expense:

Accepted Answer

A) Debit Vacation Benefits Expense $16,500; credit Vacation Benefits Payable $16,500. 
B) Debit Vacation Benefits Expense $17,160; credit Vacation Benefits Payable $17,160. 
C) Debit Vacation Benefits Expense $17,875; credit Vacation Benefits Payable $17,875. 
D) Debit Vacation Benefits Payable $17,160; credit Vacation Benefits Expense $17,160. 
E) Debit Vacation Benefits Payable $16,500; credit Vacation Benefits Expense $16,500. 
A) Debit Vacation Benefits Expense $16,500; credit Vacation Benefits Payable $16,500. 
B) Debit Vacation Benefits Expense $17,160; credit Vacation Benefits Payable $17,160. 
C) Debit Vacation Benefits Expense $17,875; credit Vacation Benefits Payable $17,875. 
D) Debit Vacation Benefits Payable $17,160; credit Vacation Benefits Expense $17,160. 
E) Debit Vacation Benefits Payable $16,500; credit Vacation Benefits Expense $16,500.

Question 5

Unearned revenues are amounts received _______________ for future products or services.

Accepted Answer

in advance

Question 6

Contingent liabilities can be:

Accepted Answer

A) Probable. 
B) Remote. 
C) Reasonably possible. 
D) Estimable. 
E) All of the choices are correct. 
A) Probable. 
B) Remote. 
C) Reasonably possible. 
D) Estimable. 
E) All of the choices are correct.

Question 7

Advance ticket sales totaling $6,000,000 cash would be recognized as follows:

Accepted Answer

A) Debit Sales, credit Unearned Revenue. 
B) Debit Unearned Revenue, credit Sales. 
C) Debit Cash, credit Unearned Revenue. 
D) Debit Unearned Revenue, credit Cash. 
E) Debit Cash, credit Revenue. 
A) Debit Sales, credit Unearned Revenue. 
B) Debit Unearned Revenue, credit Sales. 
C) Debit Cash, credit Unearned Revenue. 
D) Debit Unearned Revenue, credit Cash. 
E) Debit Cash, credit Revenue.

Question 8

Explain how to calculate times interest earned.Explain how it is used to analyze a company's risk.

Accepted Answer

The times interest earned ratio is calcu

Question 9

The tax rate for FICA-social security is 6.2% and the tax rate for FICA-Medicare is 1.45%.Calculate the total amount of FICA withholding for an employee whose pay is $2,400 and is entirely subject to these FICA taxes.

Accepted Answer

The answer of The tax rate for FICA-social security is...

Question 10

A _____________________ is a seller's obligation to replace or correct a product or service that fails to perform as expected within a specified period.

Accepted Answer

The answer of A _____________________ is a seller's obligation to...

Question 11

Uncertainties such as natural disasters:

Accepted Answer

A) Are not contingent liabilities because they are future events not arising from past transactions or events. 
B) Are contingent liabilities because they are future events arising from past transactions or events. 
C) Should be disclosed because of their usefulness to financial statements. 
D) Are estimated liabilities because the amounts are uncertain. 
E) Arise out of transactions such as debt guarantees. 
A) Are not contingent liabilities because they are future events not arising from past transactions or events. 
B) Are contingent liabilities because they are future events arising from past transactions or events. 
C) Should be disclosed because of their usefulness to financial statements. 
D) Are estimated liabilities because the amounts are uncertain. 
E) Arise out of transactions such as debt guarantees.

Question 12

Employers' responsibilities for payroll include:

Accepted Answer

A) Providing each employee with an annual report of his or her wages subject to FICA and federal income taxes along with the amount of these taxes withheld. 
B) Filing Form 941, the Employer's Quarterly Federal Tax Return. 
C) Filing Form 940, the Annual Federal Unemployment Tax Return. 
D) Maintaining individual earnings records for each employee. 
E) All of the choices are correct. 
A) Providing each employee with an annual report of his or her wages subject to FICA and federal income taxes along with the amount of these taxes withheld. 
B) Filing Form 941, the Employer's Quarterly Federal Tax Return. 
C) Filing Form 940, the Annual Federal Unemployment Tax Return. 
D) Maintaining individual earnings records for each employee. 
E) All of the choices are correct.

Question 13

Phil Phoenix is paid monthly.For the month of January of the current year,he earned a total of $8,288.The FICA tax rate for social security is 6.2% and the FICA tax rate for Medicare is 1.45%.The FUTA tax rate is 0.8%,and the SUTA tax rate is 5.4%.Both unemployment taxes are applied to the first $7,000 of an employee's pay.The amount of Federal Income Tax withheld from his earnings was $1,375.17.What is the total amount of taxes withheld from the Phoenix's earnings?

Accepted Answer

A) $3,097.17 
B) $2,443.21 
C) $2,009.21 
D) $1,722.00 
E) $1,495.36 
A) $3,097.17 
B) $2,443.21 
C) $2,009.21 
D) $1,722.00 
E) $1,495.36

Question 14

______________ are amounts owed to suppliers for products or services purchased on credit.

Accepted Answer

Trade acco

Question 15

If the times interest ratio:

Accepted Answer

A) Increases, then risk increases. 
B) Increases, then risk decreases. 
C) Is greater than 1.5, then the company is in default. 
D) Is less than 1.5, the company is carrying too little debt. 
E) Is greater than 3.0, the company is likely carrying too much debt. 
A) Increases, then risk increases. 
B) Increases, then risk decreases. 
C) Is greater than 1.5, then the company is in default. 
D) Is less than 1.5, the company is carrying too little debt. 
E) Is greater than 3.0, the company is likely carrying too much debt.

Question 16

_________________ are probable future payments of assets or services that a company is presently obligated to make as a result of past transactions or events.

Accepted Answer

The answer of _________________ are probable future payments of assets...

Question 17

Maryland Company offers a bonus plan to its employees equal to 3% of net income.Maryland's net income is expected to be $960,000.The amount of the employee bonus expense is estimated to be:

Accepted Answer

A) $27,961 
B) $28,800 
C) $29,000 
D) $29,691 
E) $30,000 
A) $27,961 
B) $28,800 
C) $29,000 
D) $29,691 
E) $30,000

Question 18

Payments of FUTA are made quarterly to a federal depository bank if the total amount due exceeds $500.

Accepted Answer

A) True 
 B)False

Question 19

If a company uses a special payroll bank account:

Accepted Answer

A) The company does not need to issue paychecks. 
B) The company draws one check for the entire payroll on the regular bank account and deposits it in the payroll bank account. 
C) The company must use a federal depository bank for the payroll bank account. 
D) There is no need for a payroll register. 
E) There is no need to issue W-2's. 
A) The company does not need to issue paychecks. 
B) The company draws one check for the entire payroll on the regular bank account and deposits it in the payroll bank account. 
C) The company must use a federal depository bank for the payroll bank account. 
D) There is no need for a payroll register. 
E) There is no need to issue W-2's.

Question 20

The Wage and Tax Statement is:

Accepted Answer

A) Form 940. 
B) Form 941. 
C) Form 1040 
D) Form W-2. 
E) Form W-4. 
A) Form 940. 
B) Form 941. 
C) Form 1040 
D) Form W-2. 
E) Form W-4.

Exam 11: Current Liabilities and Payroll Accounting

Short-term notes payable:

Employer payroll taxes are an added employee _______________ beyond the wages and salaries earned by the employees.

Arena Company's salaried employees earn two weeks of vacation per year.It pays $858,000 in total employee salaries for 52 weeks but its employees work only 50.Record Arena Company's weekly journal entry to record the vacation expense:

Unearned revenues are amounts received _______________ for future products or services.

Contingent liabilities can be:

Advance ticket sales totaling $6,000,000 cash would be recognized as follows:

Explain how to calculate times interest earned.Explain how it is used to analyze a company's risk.

The tax rate for FICA-social security is 6.2% and the tax rate for FICA-Medicare is 1.45%.Calculate the total amount of FICA withholding for an employee whose pay is $2,400 and is entirely subject to these FICA taxes.

A _____________________ is a seller's obligation to replace or correct a product or service that fails to perform as expected within a specified period.

Uncertainties such as natural disasters:

Employers' responsibilities for payroll include:

______________ are amounts owed to suppliers for products or services purchased on credit.

If the times interest ratio:

_________________ are probable future payments of assets or services that a company is presently obligated to make as a result of past transactions or events.

Maryland Company offers a bonus plan to its employees equal to 3% of net income.Maryland's net income is expected to be $960,000.The amount of the employee bonus expense is estimated to be:

Payments of FUTA are made quarterly to a federal depository bank if the total amount due exceeds $500.

If a company uses a special payroll bank account:

The Wage and Tax Statement is:

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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