Question 1

The debt ratio is an indicator of a company's ability to incur more debt.

Accepted Answer

A) True 
 B)False

Question 2

Bonds payable are supported by a promissory note.

Accepted Answer

A) True 
 B)False

Question 3

A $400,000 issue of bonds that sold for $363,000 matures on August 1,2015.The journal entry to record the payment of the bond on the maturity date is to:

Accepted Answer

A) debit Cash,$400,000;credit Bonds payable,$400,000. 
B) debit Bonds payable,$400,000;credit Cash,$400,000. 
C) debit Cash,$363,000;credit Bonds payable,$363,000. 
D) debit Bonds payable,$363,000;credit Cash,$363,000. 
A) debit Cash,$400,000;credit Bonds payable,$400,000. 
B) debit Bonds payable,$400,000;credit Cash,$400,000. 
C) debit Cash,$363,000;credit Bonds payable,$363,000. 
D) debit Bonds payable,$363,000;credit Cash,$363,000.

Question 4

The amount that a borrower must pay back to the bondholders on the maturity date is the:

Accepted Answer

A) principal. 
B) interest. 
C) stated value. 
D) market value. 
A) principal. 
B) interest. 
C) stated value. 
D) market value.

Question 5

Unearned revenues are typically classified as current liabilities.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following would be treated as a rental agreement?

Accepted Answer

A) Capital leases 
B) Operating leases 
C) Expense leases 
D) Revenue leases 
A) Capital leases 
B) Operating leases 
C) Expense leases 
D) Revenue leases

Question 7

Debenture bonds are the same as:

Accepted Answer

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

Question 8

By NOT accruing warranty expense:

Accepted Answer

A) reported liabilities will be overstated and net income will be understated. 
B) reported expenses will be overstated and reported liabilities will be understated. 
C) reported liabilities will be understated and net income will be overstated. 
D) reported expenses will be understated and net income will be understated. 
A) reported liabilities will be overstated and net income will be understated. 
B) reported expenses will be overstated and reported liabilities will be understated. 
C) reported liabilities will be understated and net income will be overstated. 
D) reported expenses will be understated and net income will be understated.

Question 9

Making a payment on an account would be journalized with a debit to Accounts Payable and credit to Cash.

Accepted Answer

A) True 
 B)False

Question 10

Vintage Boutique reported Interest expense of $5,200,Income tax expense of $23,000 and Net income of $78,000.Vintage Boutique's interest coverage ratio is (rounded to two decimals):

Accepted Answer

A) 19.42. 
B) 0)50. 
C) 0)05. 
D) 20.42. 
A) 19.42. 
B) 0)50. 
C) 0)05. 
D) 20.42.

Question 11

The Print Shoppe had sales on account of $4,500 which were subject to state sales tax of 9.5%.The entry to record the sales would be to:

Accepted Answer

A) debit Accounts Receivable $4,500;credit Sales Revenue $4,500. 
B) debit Accounts Receivable $4,500;debit Sales Tax Payable $427.50;credit Sales Revenue $4,927.50. 
C) debit Accounts Receivable $4,927.50;credit Sales Revenue $4,927.50. 
D) debit Accounts Receivable $4,927.50;credit Sales Revenue $4,500;credit Sales Tax Payable $427.50. 
A) debit Accounts Receivable $4,500;credit Sales Revenue $4,500. 
B) debit Accounts Receivable $4,500;debit Sales Tax Payable $427.50;credit Sales Revenue $4,927.50. 
C) debit Accounts Receivable $4,927.50;credit Sales Revenue $4,927.50. 
D) debit Accounts Receivable $4,927.50;credit Sales Revenue $4,500;credit Sales Tax Payable $427.50.

Question 12

If the market rate of interest is less than the bond's stated rate of interest,the bond will be issued at:

Accepted Answer

A) par. 
B) a premium. 
C) a discount. 
D) maturity value. 
A) par. 
B) a premium. 
C) a discount. 
D) maturity value.

Question 13

Which of the following would be a required payroll tax for both the employee and the employer?

Accepted Answer

A) Federal income tax 
B) FICA 
C) FUTA 
D) SUTA 
A) Federal income tax 
B) FICA 
C) FUTA 
D) SUTA

Question 14

FUTA is paid by the employer on:

Accepted Answer

A) the first $106,800 of an employee's earnings. 
B) the first $8,000 of an employee's earnings. 
C) the first $7,000 of an employee's earnings. 
D) all of the employee's earnings. 
A) the first $106,800 of an employee's earnings. 
B) the first $8,000 of an employee's earnings. 
C) the first $7,000 of an employee's earnings. 
D) all of the employee's earnings.

Question 15

Contingent liabilities represent actual-NOT potential-obligations.

Accepted Answer

A) True 
 B)False

Question 16

Discount on bonds payable and Premium on bonds payable are examples of:

Accepted Answer

A) contra-accounts. 
B) companion accounts. 
C) estimated accounts. 
D) equity accounts. 
A) contra-accounts. 
B) companion accounts. 
C) estimated accounts. 
D) equity accounts.

Question 17

Which current liability is generally listed first?

Accepted Answer

A) Notes payable 
B) Accounts Payable 
C) Current portions of long-term debt 
D) Accrued payables 
A) Notes payable 
B) Accounts Payable 
C) Current portions of long-term debt 
D) Accrued payables

Question 18

Which of the following accurately describes how contingent liabilities are reported on the Balance Sheet?

Accepted Answer

A) Contingent liabilities are not reported. 
B) Contingent liabilities are disclosed in the footnotes only. 
C) Contingent liabilities are reported in the liabilities section. 
D) The accounting treatment for contingent liability could be A,B,or C depending on the likelihood of an actual obligation occurring. 
A) Contingent liabilities are not reported. 
B) Contingent liabilities are disclosed in the footnotes only. 
C) Contingent liabilities are reported in the liabilities section. 
D) The accounting treatment for contingent liability could be A,B,or C depending on the likelihood of an actual obligation occurring.

Question 19

Which of the following would NOT be part of an employer's payroll taxes?

Accepted Answer

A) Federal income tax 
B) FICA 
C) FUTA 
D) SUTA 
A) Federal income tax 
B) FICA 
C) FUTA 
D) SUTA

Question 20

Metropolitan Masonry had sales on account of $7,200 which were subject to state sales tax of 7%.The entry to record the sales would be to:

Accepted Answer

A) debit Accounts Receivable,$7,704;credit Sales revenue,$7,200;credit Sales tax payable,$504. 
B) debit Accounts Receivable,$7,704;credit Sale revenue,$7,704. 
C) debit Accounts Receivable,$7,200;credit Sales revenue,$7,200. 
D) debit Accounts Receivable,$7,200;debit Sales tax payable,$504;credit Sales revenue,$7,704. 
A) debit Accounts Receivable,$7,704;credit Sales revenue,$7,200;credit Sales tax payable,$504. 
B) debit Accounts Receivable,$7,704;credit Sale revenue,$7,704. 
C) debit Accounts Receivable,$7,200;credit Sales revenue,$7,200. 
D) debit Accounts Receivable,$7,200;debit Sales tax payable,$504;credit Sales revenue,$7,704.

The debt ratio is an indicator of a company's ability to incur more debt.

Bonds payable are supported by a promissory note.

A $400,000 issue of bonds that sold for $363,000 matures on August 1,2015.The journal entry to record the payment of the bond on the maturity date is to:

The amount that a borrower must pay back to the bondholders on the maturity date is the:

Unearned revenues are typically classified as current liabilities.

Which of the following would be treated as a rental agreement?

Debenture bonds are the same as:

By NOT accruing warranty expense:

Making a payment on an account would be journalized with a debit to Accounts Payable and credit to Cash.

Vintage Boutique reported Interest expense of $5,200,Income tax expense of $23,000 and Net income of $78,000.Vintage Boutique's interest coverage ratio is (rounded to two decimals):

The Print Shoppe had sales on account of $4,500 which were subject to state sales tax of 9.5%.The entry to record the sales would be to:

If the market rate of interest is less than the bond's stated rate of interest,the bond will be issued at:

Which of the following would be a required payroll tax for both the employee and the employer?

FUTA is paid by the employer on:

Contingent liabilities represent actual-NOT potential-obligations.

Discount on bonds payable and Premium on bonds payable are examples of:

Which current liability is generally listed first?

Which of the following accurately describes how contingent liabilities are reported on the Balance Sheet?

Which of the following would NOT be part of an employer's payroll taxes?

Metropolitan Masonry had sales on account of $7,200 which were subject to state sales tax of 7%.The entry to record the sales would be to:

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

The debt ratio is an indicator of a company's ability to incur more debt.

Bonds payable are supported by a promissory note.

A $400,000 issue of bonds that sold for $363,000 matures on August 1,2015.The journal entry to record the payment of the bond on the maturity date is to:

The amount that a borrower must pay back to the bondholders on the maturity date is the:

Unearned revenues are typically classified as current liabilities.

Which of the following would be treated as a rental agreement?

Debenture bonds are the same as:

By NOT accruing warranty expense:

Making a payment on an account would be journalized with a debit to Accounts Payable and credit to Cash.

Vintage Boutique reported Interest expense of $5,200,Income tax expense of $23,000 and Net income of $78,000.Vintage Boutique's interest coverage ratio is (rounded to two decimals):

The Print Shoppe had sales on account of $4,500 which were subject to state sales tax of 9.5%.The entry to record the sales would be to:

If the market rate of interest is less than the bond's stated rate of interest,the bond will be issued at:

Which of the following would be a required payroll tax for both the employee and the employer?

FUTA is paid by the employer on:

Contingent liabilities represent actual-NOT potential-obligations.

Discount on bonds payable and Premium on bonds payable are examples of:

Which current liability is generally listed first?

Which of the following accurately describes how contingent liabilities are reported on the Balance Sheet?

Which of the following would NOT be part of an employer's payroll taxes?

Metropolitan Masonry had sales on account of $7,200 which were subject to state sales tax of 7%.The entry to record the sales would be to:

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