Question 1

Obligations due to be paid within one year or the company's operating cycle,whichever is longer,are:

Accepted Answer

A) Current assets. 
B) Current liabilities. 
C) Earned revenues. 
D) Operating cycle liabilities. 
E) Bills. 
A) Current assets. 
B) Current liabilities. 
C) Earned revenues. 
D) Operating cycle liabilities. 
E) Bills.

Question 2

A short-term note payable is a written promise to pay a specified amount on a definite future date within one year or the operating cycle,whichever is longer.

Accepted Answer

A) True 
 B)False

Question 3

All of the following statements regarding uncertainty in liabilities are true except:

Accepted Answer

A) Liabilities can involve uncertainty in whom to pay. 
B) A company can create a known amount when issuing a note even though the holder of the not may not be known until the maturity date. 
C) A company can have an obligation of a known amount to a known creditor but not know when it must be paid. 
D) A company only records liabilities when it knows whom to pay, when to pay, and how much to pay. 
E) A company can be aware of an obligation but not know how much will be required to settle it. 
A) Liabilities can involve uncertainty in whom to pay. 
B) A company can create a known amount when issuing a note even though the holder of the not may not be known until the maturity date. 
C) A company can have an obligation of a known amount to a known creditor but not know when it must be paid. 
D) A company only records liabilities when it knows whom to pay, when to pay, and how much to pay. 
E) A company can be aware of an obligation but not know how much will be required to settle it.

Question 4

On November 1,Carter Company signed a 120-day,10% note payable,with a face value of $9,000.What is the maturity value of the note on March 1?

Accepted Answer

A) $9,000 
B) $9,100 
C) $9,150 
D) $9,200 
E) $9,300 
A) $9,000 
B) $9,100 
C) $9,150 
D) $9,200 
E) $9,300

Question 5

A short-term note payable:

Accepted Answer

A) Is a written promise to pay a specified amount on a definite future date within one year or the company's operating cycle, whichever is longer. 
B) Is a contingent liability. 
C) Is an estimated liability. 
D) Is not a liability until the due date. 
E) Cannot be used to extend the payment period for an account payable. 
A) Is a written promise to pay a specified amount on a definite future date within one year or the company's operating cycle, whichever is longer. 
B) Is a contingent liability. 
C) Is an estimated liability. 
D) Is not a liability until the due date. 
E) Cannot be used to extend the payment period for an account payable.

Question 6

A _______________________ is a written promise to pay a specified amount on a definite future date within one year or the company's operating cycle,whichever is longer.

Accepted Answer

short-term

Question 7

A liability does not exist if there is any uncertainty about whom to pay,when to pay,or how much to pay.

Accepted Answer

A) True 
 B)False

Question 8

FICA taxes include:

Accepted Answer

A) Social Security taxes. 
B) Charitable giving. 
C) Employee income taxes. 
D) Unemployment taxes. 
E) All of the choices are correct. 
A) Social Security taxes. 
B) Charitable giving. 
C) Employee income taxes. 
D) Unemployment taxes. 
E) All of the choices are correct.

Question 9

FUTA taxes are:

Accepted Answer

A) Social Security taxes. 
B) Medicare taxes. 
C) Employee income taxes. 
D) Unemployment taxes. 
E) Employee deductions. 
A) Social Security taxes. 
B) Medicare taxes. 
C) Employee income taxes. 
D) Unemployment taxes. 
E) Employee deductions.

Question 10

The payroll records of a company provided the following data for the weekly pay period ended December 7:
   The FICA social security tax rate is 6.2% and the FICA Medicare tax rate is 1.45% on all of this week's wages paid to each employee.The federal and state unemployment tax rates are 0.8% and 5.4%,respectively,on the first $7,000 paid to each employee.Prepare the journal entries to (a)accrue the payroll and (b)record payroll taxes expense.

Accepted Answer

The answer of The payroll records of a company provided...

Question 11

Each employee records the number of withholding allowances claimed on form W-4,which is the withholding allowance certificate that is filed with the employer.

Accepted Answer

A) True 
 B)False

Question 12

Classify each of the following items as either:
a.Estimated liability
b.Contingent liability
c.Current liability that is neither a nor b
1.Lawsuit against the company
2.Warranty on products sold this year
3.Accounts payable
4.Income taxes payable
5.Vacation benefits
6.Accrued wages payable
7.Debt guarantees
8.Property taxes payable
9.Payroll taxes payable
10.Unearned revenues

Accepted Answer

1.B; 2.A;

Question 13

Amounts received in advance from customers for future products or services:

Accepted Answer

A) Are revenues. 
B) Increase income. 
C) Are liabilities. 
D) Are not allowed under GAAP. 
E) Require an outlay of cash in the future. 
A) Are revenues. 
B) Increase income. 
C) Are liabilities. 
D) Are not allowed under GAAP. 
E) Require an outlay of cash in the future.

Question 14

A payroll register usually shows the pay period dates,hours worked,gross pay,deductions,and net pay of each employee for every pay period.

Accepted Answer

A) True 
 B)False

Question 15

All of the following statements related to recording warranty expense are true except:

Accepted Answer

A) Recording estimated warranty expense complies with the full disclosure principle. 
B) Warranty expense should be recorded in the period when the warranty service is performed. 
C) Recording estimated warranty expense complies with the matching principle. 
D) The seller reports a warranty obligation as a liability. 
E) Warranty costs are probable and the amount can be estimated. 
A) Recording estimated warranty expense complies with the full disclosure principle. 
B) Warranty expense should be recorded in the period when the warranty service is performed. 
C) Recording estimated warranty expense complies with the matching principle. 
D) The seller reports a warranty obligation as a liability. 
E) Warranty costs are probable and the amount can be estimated.

Question 16

Accounting for contingent liabilities covers three possibilities:
 (1)The future event is probable and the amount cannot be reasonably estimated; (2)The future event is remote or unlikely to recur; (3)The likelihood of the liability to occur is impossible.

Accepted Answer

A) True 
 B)False

Question 17

When the number of withholding allowances claimed on Form W-4 increases,the amount of income tax withheld increases.

Accepted Answer

A) True 
 B)False

Question 18

Blake Company pays its employees for two weeks vacation each year.The total annual cost of the vacation benefit is $113,000.Prepare the journal entry to record the weekly accrued vacation expense.

Accepted Answer

Vacation Benefits Ex

Question 19

A company's employer payroll tax rates are 0.8% for federal unemployment taxes,5.4% for state unemployment taxes,6.2% for FICA social security taxes on earnings up to $106,800,and 1.45% for FICA Medicare taxes on all earnings.Compute the W-2 Wage and Tax Statement information required below for the following employees:

Accepted Answer

The answer of A company's employer payroll tax rates are...

Question 20

An employee earned $4,300 working for an employer.The current rate for FICA Social Security is 6.2% and the rate for FICA Medicare 1.45%.The employer's total FICA payroll tax for this employee is:

Accepted Answer

A) $ 62.35. 
B) $266.60. 
C) $328.95. 
D) $657.90. 
E) Zero, since the FICA tax is a deduction from an employee's pay, and not an employer tax. 
A) $ 62.35. 
B) $266.60. 
C) $328.95. 
D) $657.90. 
E) Zero, since the FICA tax is a deduction from an employee's pay, and not an employer tax.

Exam 11: Current Liabilities and Payroll Accounting

Obligations due to be paid within one year or the company's operating cycle,whichever is longer,are:

A short-term note payable is a written promise to pay a specified amount on a definite future date within one year or the operating cycle,whichever is longer.

All of the following statements regarding uncertainty in liabilities are true except:

On November 1,Carter Company signed a 120-day,10% note payable,with a face value of $9,000.What is the maturity value of the note on March 1?

A short-term note payable:

A _______________________ is a written promise to pay a specified amount on a definite future date within one year or the company's operating cycle,whichever is longer.

A liability does not exist if there is any uncertainty about whom to pay,when to pay,or how much to pay.

FICA taxes include:

FUTA taxes are:

Each employee records the number of withholding allowances claimed on form W-4,which is the withholding allowance certificate that is filed with the employer.

Amounts received in advance from customers for future products or services:

A payroll register usually shows the pay period dates,hours worked,gross pay,deductions,and net pay of each employee for every pay period.

All of the following statements related to recording warranty expense are true except:

Accounting for contingent liabilities covers three possibilities: (1)The future event is probable and the amount cannot be reasonably estimated; (2)The future event is remote or unlikely to recur; (3)The likelihood of the liability to occur is impossible.

When the number of withholding allowances claimed on Form W-4 increases,the amount of income tax withheld increases.

Blake Company pays its employees for two weeks vacation each year.The total annual cost of the vacation benefit is $113,000.Prepare the journal entry to record the weekly accrued vacation expense.

An employee earned $4,300 working for an employer.The current rate for FICA Social Security is 6.2% and the rate for FICA Medicare 1.45%.The employer's total FICA payroll tax for this employee 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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