Question 1

Under a capital lease,the title of an asset remains with the lessor at the end of the lease.

Accepted Answer

A) True 
 B)False  False

Question 2

Accounts Payable would be an example of a(n):

Accepted Answer

A) contingent liability. 
B) estimated liability. 
C) known liability. 
D) accrued liability. 
A) contingent liability. 
B) estimated liability. 
C) known liability. 
D) accrued liability. C

Question 3

When a company issues bonds,what are they doing?

Accepted Answer

A) The company is loaning money to third parties. 
B) The company is borrowing money from third parties. 
C) The company is selling part of itself. 
D) The company is guaranteeing the products they sell. 
A) The company is loaning money to third parties. 
B) The company is borrowing money from third parties. 
C) The company is selling part of itself. 
D) The company is guaranteeing the products they sell. B

Question 4

Notes payable would be an example of a known liability.

Accepted Answer

A) True 
 B)False

Question 5

After being withheld,payroll taxes become an asset for the company.

Accepted Answer

A) True 
 B)False

Question 6

Bonds payable minus the Discount on bonds payable yields the:

Accepted Answer

A) maturity value. 
B) annual interest. 
C) carrying amount. 
D) principle amount. 
A) maturity value. 
B) annual interest. 
C) carrying amount. 
D) principle amount.

Question 7

The debt ratio is an indicator of a company's profitability.

Accepted Answer

A) True 
 B)False

Question 8

On September 30,2014,Arctic Enterprises recorded their semi-annual bond interest expense that contained a credit to Discount on bonds payable of $1,600.The adjusting entry on December 31,2014 will show a credit to Discount on bonds payable of:

Accepted Answer

A) $1,200. 
B) $800. 
C) $600. 
D) $400. 
A) $1,200. 
B) $800. 
C) $600. 
D) $400.

Question 9

Bonds that mature all at the same time are:

Accepted Answer

A) serial bonds. 
B) term bonds. 
C) secured bonds. 
D) callable bonds. 
A) serial bonds. 
B) term bonds. 
C) secured bonds. 
D) callable bonds.

Question 10

Which of the following would NOT be a liability?

Accepted Answer

A) The signing of a three-year employment contract at a fixed annual salary 
B) An obligation to provide goods or services in the future 
C) A note payable with no specified maturity date 
D) An obligation that is estimated in amount 
A) The signing of a three-year employment contract at a fixed annual salary 
B) An obligation to provide goods or services in the future 
C) A note payable with no specified maturity date 
D) An obligation that is estimated in amount

Question 11

A person or business who pays another party for the use of an asset is a lessee.

Accepted Answer

A) True 
 B)False

Question 12

Pay stated at a monthly or annual rate is considered to be a:

Accepted Answer

A) salary. 
B) wage. 
C) bonus. 
D) commission. 
A) salary. 
B) wage. 
C) bonus. 
D) commission.

Question 13

Tazo Inc.signed a $30,000 10% 15-year installment note on December 1,2014.The note requires quarterly payments of $500 plus interest on March 1,June 1,September 1,and December 1 of each year.How will Budget Auto classify this loan on its December 31,2014 Balance Sheet?

Accepted Answer

A) Current Portion of Long-term debt,$1,000;Long-term debt,$29,000 
B) Current Portion of Long-term debt,$2,000;Long-term debt,$28,000 
C) Current Portion of Long-term debt,$500;Long-term debt,$29,500 
D) Current Portion of Long-term debt,$1,500;Long-term debt,$28,500 
A) Current Portion of Long-term debt,$1,000;Long-term debt,$29,000 
B) Current Portion of Long-term debt,$2,000;Long-term debt,$28,000 
C) Current Portion of Long-term debt,$500;Long-term debt,$29,500 
D) Current Portion of Long-term debt,$1,500;Long-term debt,$28,500

Question 14

For a liability to exist:

Accepted Answer

A) a past transaction or event must have occurred. 
B) the exact amount must be known. 
C) the identity of the party must be known. 
D) an obligation to pay cash in the future must exist. 
A) a past transaction or event must have occurred. 
B) the exact amount must be known. 
C) the identity of the party must be known. 
D) an obligation to pay cash in the future must exist.

Question 15

Lionworks Inc.signed a $45,000 8% 30-year installment note on November 1,2014.The note requires semiannual payments of $750 plus interest on May 1 and November 1 of each year.How will Budget Auto classify this loan on its December 31,2014 Balance Sheet?

Accepted Answer

A) Current Portion of Long-term debt,$0;Long-term debt,$45,000 
B) Current Portion of Long-term debt,$45,000;Long-term debt,$0 
C) Current Portion of Long-term debt,$750;Long-term debt,$44,250 
D) Current Portion of Long-term debt,$1,500;Long-term debt,$43,500 
A) Current Portion of Long-term debt,$0;Long-term debt,$45,000 
B) Current Portion of Long-term debt,$45,000;Long-term debt,$0 
C) Current Portion of Long-term debt,$750;Long-term debt,$44,250 
D) Current Portion of Long-term debt,$1,500;Long-term debt,$43,500

Question 16

During the month,Northwest Electric paid $582 to settle warranty claims.Northwest uses an estimated warranty account.The journal entry to record the payment would have been:

Accepted Answer

A) debit Estimated warranty payable,$582;credit Cash,$582. 
B) debit Warranty expense,$582;credit Estimated Warranty payable,$582. 
C) debit Estimated warranty payable,582;credit Warranty expense,$582. 
D) debit Warranty expense,$582;credit Cash,$582. 
A) debit Estimated warranty payable,$582;credit Cash,$582. 
B) debit Warranty expense,$582;credit Estimated Warranty payable,$582. 
C) debit Estimated warranty payable,582;credit Warranty expense,$582. 
D) debit Warranty expense,$582;credit Cash,$582.

Question 17

Richard is paid a salary of $9,000.At the end of November,his cumulative gross earnings were $99,000.How much will his employer take out for the OASDI portion of social security for December?

Accepted Answer

A) $558.00 
B) $688.50 
C) $130.50 
D) $483.60 
A) $558.00 
B) $688.50 
C) $130.50 
D) $483.60

Question 18

A company signs a note payable for $3,500 at 9% for 45 days.How much interest (to the nearest cent)will the company owe using a 360-day year?

Accepted Answer

A) $354.38 
B) $315.00 
C) $39.38 
D) $38.84 
A) $354.38 
B) $315.00 
C) $39.38 
D) $38.84

Question 19

A $5,000 bond issue with a stated interest rate of 8%,when the market rate of interest is 8%,means that the bond will sell for:

Accepted Answer

A) the maturity value. 
B) $5,000. 
C) more than $5,000. 
D) less than $5,000. 
A) the maturity value. 
B) $5,000. 
C) more than $5,000. 
D) less than $5,000.

Question 20

Which of the following would be considered an estimated liability?

Accepted Answer

A) Notes payable 
B) Warranties payable 
C) Pending litigation 
D) Sales tax payable 
A) Notes payable 
B) Warranties payable 
C) Pending litigation 
D) Sales tax payable

Under a capital lease,the title of an asset remains with the lessor at the end of the lease.

Accounts Payable would be an example of a(n):

When a company issues bonds,what are they doing?

Notes payable would be an example of a known liability.

After being withheld,payroll taxes become an asset for the company.

Bonds payable minus the Discount on bonds payable yields the:

The debt ratio is an indicator of a company's profitability.

On September 30,2014,Arctic Enterprises recorded their semi-annual bond interest expense that contained a credit to Discount on bonds payable of $1,600.The adjusting entry on December 31,2014 will show a credit to Discount on bonds payable of:

Bonds that mature all at the same time are:

Which of the following would NOT be a liability?

A person or business who pays another party for the use of an asset is a lessee.

Pay stated at a monthly or annual rate is considered to be a:

Tazo Inc.signed a $30,000 10% 15-year installment note on December 1,2014.The note requires quarterly payments of $500 plus interest on March 1,June 1,September 1,and December 1 of each year.How will Budget Auto classify this loan on its December 31,2014 Balance Sheet?

For a liability to exist:

Lionworks Inc.signed a $45,000 8% 30-year installment note on November 1,2014.The note requires semiannual payments of $750 plus interest on May 1 and November 1 of each year.How will Budget Auto classify this loan on its December 31,2014 Balance Sheet?

During the month,Northwest Electric paid $582 to settle warranty claims.Northwest uses an estimated warranty account.The journal entry to record the payment would have been:

Richard is paid a salary of $9,000.At the end of November,his cumulative gross earnings were $99,000.How much will his employer take out for the OASDI portion of social security for December?

A company signs a note payable for $3,500 at 9% for 45 days.How much interest (to the nearest cent)will the company owe using a 360-day year?

A $5,000 bond issue with a stated interest rate of 8%,when the market rate of interest is 8%,means that the bond will sell for:

Which of the following would be considered an estimated liability?

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Accounting for a Merchandising Business

Inventory

The Challenges of Accounting: Standards, internal Control, audits, fraud, and Ethics

Cash and Receivables

Long-Term and Other Assets

Corporations: Paid-In Capital and Retained Earnings

The Statement of Cash Flows

Financial Statement Analysis

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Exam 9: Current Liabilities and Long-Term Debt

Under a capital lease,the title of an asset remains with the lessor at the end of the lease.

Accounts Payable would be an example of a(n):

When a company issues bonds,what are they doing?

Notes payable would be an example of a known liability.

After being withheld,payroll taxes become an asset for the company.

Bonds payable minus the Discount on bonds payable yields the:

The debt ratio is an indicator of a company's profitability.

On September 30,2014,Arctic Enterprises recorded their semi-annual bond interest expense that contained a credit to Discount on bonds payable of $1,600.The adjusting entry on December 31,2014 will show a credit to Discount on bonds payable of:

Bonds that mature all at the same time are:

Which of the following would NOT be a liability?

A person or business who pays another party for the use of an asset is a lessee.

Pay stated at a monthly or annual rate is considered to be a:

Tazo Inc.signed a $30,000 10% 15-year installment note on December 1,2014.The note requires quarterly payments of $500 plus interest on March 1,June 1,September 1,and December 1 of each year.How will Budget Auto classify this loan on its December 31,2014 Balance Sheet?

For a liability to exist:

Lionworks Inc.signed a $45,000 8% 30-year installment note on November 1,2014.The note requires semiannual payments of $750 plus interest on May 1 and November 1 of each year.How will Budget Auto classify this loan on its December 31,2014 Balance Sheet?

During the month,Northwest Electric paid $582 to settle warranty claims.Northwest uses an estimated warranty account.The journal entry to record the payment would have been:

Richard is paid a salary of $9,000.At the end of November,his cumulative gross earnings were $99,000.How much will his employer take out for the OASDI portion of social security for December?

A company signs a note payable for $3,500 at 9% for 45 days.How much interest (to the nearest cent)will the company owe using a 360-day year?

A $5,000 bond issue with a stated interest rate of 8%,when the market rate of interest is 8%,means that the bond will sell for:

Which of the following would be considered an estimated liability?

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Accounting for a Merchandising Business

Inventory

The Challenges of Accounting: Standards, internal Control, audits, fraud, and Ethics

Cash and Receivables

Long-Term and Other Assets

Corporations: Paid-In Capital and Retained Earnings

The Statement of Cash Flows

Financial Statement Analysis

Filters