Question 1

There are times when contingent liabilities are never recorded.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following liabilities can be classified as either current or long term?

Accepted Answer

A) known and estimated 
B) estimated and contingent 
C) known and contingent 
D) known,estimated,and contingent 
A) known and estimated 
B) estimated and contingent 
C) known and contingent 
D) known,estimated,and contingent

Question 3

Which of the following would be considered a known liability?

Accepted Answer

A) Federal income tax payable 
B) Warranties payable 
C) Pending litigation 
D) Possible contingency payable 
A) Federal income tax payable 
B) Warranties payable 
C) Pending litigation 
D) Possible contingency payable

Question 4

Which of the following would be considered a contingent liability?

Accepted Answer

A) Sales tax obligation 
B) Mortgage obligation 
C) Accounts Payable obligation 
D) Pending legal action 
A) Sales tax obligation 
B) Mortgage obligation 
C) Accounts Payable obligation 
D) Pending legal action

Question 5

Which are generally paid at an hourly rate?

Accepted Answer

A) Salaries 
B) Wages 
C) Bonuses 
D) Commissions 
A) Salaries 
B) Wages 
C) Bonuses 
D) Commissions

Question 6

If the market rate of interest is higher than the stated rate of interest,then investors will be willing to pay more and the bond is sold at a premium.

Accepted Answer

A) True 
 B)False

Question 7

Warranty expense is always recorded in the period that the warranty claims are paid.

Accepted Answer

A) True 
 B)False

Question 8

One type of liability that is easy to overlook is a(n):

Accepted Answer

A) tax liability. 
B) note payable. 
C) account payable. 
D) contingent liability. 
A) tax liability. 
B) note payable. 
C) account payable. 
D) contingent liability.

Question 9

Bonds are interest-bearing notes that are issued to a single lender.

Accepted Answer

A) True 
 B)False

Question 10

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 HI 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 11

The tax rate on the OASDI portion of FICA is:

Accepted Answer

A) 7)65%. 
B) 1)45%. 
C) 6)20%. 
D) 0)80%. 
A) 7)65%. 
B) 1)45%. 
C) 6)20%. 
D) 0)80%.

Question 12

A $250,000 issue of bonds that sold for $275,000 matures on June 25,2020.The journal entry to record the payment of the bond on the maturity date is to:

Accepted Answer

A) debit Cash,$250,000;credit Bonds payable,$250,000. 
B) debit Bonds payable,$250,000;credit Cash,$250,000. 
C) debit Cash,$275,000;credit Bonds payable,$275,000. 
D) debit Bonds payable,$275,000;credit Cash,$275,000. 
A) debit Cash,$250,000;credit Bonds payable,$250,000. 
B) debit Bonds payable,$250,000;credit Cash,$250,000. 
C) debit Cash,$275,000;credit Bonds payable,$275,000. 
D) debit Bonds payable,$275,000;credit Cash,$275,000.

Question 13

The journal entry to record $200,000 of bonds that were issued at 97 would be to:

Accepted Answer

A) debit Cash,$194,000;debit Discount on bonds payable,$6,000;credit Bonds payable,$200,000. 
B) debit Cash,$194,000;credit Bonds payable,$194,000. 
C) debit Cash,$200,000;credit Bonds payable,$194,000;credit Premium on bonds payable,$6,000. 
D) debit Cash,$200,000;credit Bonds payable,$200,000. 
A) debit Cash,$194,000;debit Discount on bonds payable,$6,000;credit Bonds payable,$200,000. 
B) debit Cash,$194,000;credit Bonds payable,$194,000. 
C) debit Cash,$200,000;credit Bonds payable,$194,000;credit Premium on bonds payable,$6,000. 
D) debit Cash,$200,000;credit Bonds payable,$200,000.

Question 14

A company will want a lower interest coverage ratio if it is unsure of its EBIT.

Accepted Answer

A) True 
 B)False

Question 15

Accrued liabilities,such as interest payable,would be considered a(n):

Accepted Answer

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

Question 16

$300,000 of 10%,20-year bonds were sold for $320,000 on January 1.The bonds require semiannual interest payments on June 30 and December 31.The entry to record the June 30 interest payment on the bonds would be to:

Accepted Answer

A) debit Interest Expense $15,000;credit Cash,$15,000. 
B) debit Interest Expense $15,500;credit Premium on bonds payable,$500;credit Cash,$15,000. 
C) debit Interest Expense $14,500;debit Premium on bonds payable,$500;credit Cash,$15,000. 
D) debit Interest Expense $14,500;credit Cash,$14,500. 
A) debit Interest Expense $15,000;credit Cash,$15,000. 
B) debit Interest Expense $15,500;credit Premium on bonds payable,$500;credit Cash,$15,000. 
C) debit Interest Expense $14,500;debit Premium on bonds payable,$500;credit Cash,$15,000. 
D) debit Interest Expense $14,500;credit Cash,$14,500.

Question 17

Bonds that are backed only by the credit of the issuing company are:

Accepted Answer

A) collateral bonds. 
B) callable bonds. 
C) unsecured bonds. 
D) term bonds. 
A) collateral bonds. 
B) callable bonds. 
C) unsecured bonds. 
D) term bonds.

Question 18

On January 1,Clive Corporation signed a $175,000,8%,30-year mortgage that requires semiannual payments of $7,735 on June 30 and December 31 of each year.The journal entry to record the first semiannual payment would be (round interest calculation to the nearest dollar)to:

Accepted Answer

A) debit Interest Expense,$735;debit Mortgage Payable,$7,000;credit Cash,$7,735. 
B) debit Interest Expense,$7,000;debit Mortgage Payable,$735;credit Cash,$7,735. 
C) debit Mortgage Payable,$7,735;credit Cash,$7,735. 
D) debit Interest Expense,$7,000;debit Mortgage expense,$735;credit Cash,$7,735. 
A) debit Interest Expense,$735;debit Mortgage Payable,$7,000;credit Cash,$7,735. 
B) debit Interest Expense,$7,000;debit Mortgage Payable,$735;credit Cash,$7,735. 
C) debit Mortgage Payable,$7,735;credit Cash,$7,735. 
D) debit Interest Expense,$7,000;debit Mortgage expense,$735;credit Cash,$7,735.

Question 19

If a $6,000,10 percent,10-year bond was issued at 104 on October 1,how much will accrued interest payable be on December 31 if interest payments are made annually?

Accepted Answer

A) $104 
B) $144 
C) $150 
D) $156 
A) $104 
B) $144 
C) $150 
D) $156

Question 20

EBIT is also called operating profit.

Accepted Answer

A) True 
 B)False

There are times when contingent liabilities are never recorded.

Which of the following liabilities can be classified as either current or long term?

Which of the following would be considered a known liability?

Which of the following would be considered a contingent liability?

Which are generally paid at an hourly rate?

If the market rate of interest is higher than the stated rate of interest,then investors will be willing to pay more and the bond is sold at a premium.

Warranty expense is always recorded in the period that the warranty claims are paid.

One type of liability that is easy to overlook is a(n):

Bonds are interest-bearing notes that are issued to a single lender.

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 HI portion of social security for December?

The tax rate on the OASDI portion of FICA is:

A $250,000 issue of bonds that sold for $275,000 matures on June 25,2020.The journal entry to record the payment of the bond on the maturity date is to:

The journal entry to record $200,000 of bonds that were issued at 97 would be to:

A company will want a lower interest coverage ratio if it is unsure of its EBIT.

Accrued liabilities,such as interest payable,would be considered a(n):

$300,000 of 10%,20-year bonds were sold for $320,000 on January 1.The bonds require semiannual interest payments on June 30 and December 31.The entry to record the June 30 interest payment on the bonds would be to:

Bonds that are backed only by the credit of the issuing company are:

On January 1,Clive Corporation signed a $175,000,8%,30-year mortgage that requires semiannual payments of $7,735 on June 30 and December 31 of each year.The journal entry to record the first semiannual payment would be (round interest calculation to the nearest dollar)to:

If a $6,000,10 percent,10-year bond was issued at 104 on October 1,how much will accrued interest payable be on December 31 if interest payments are made annually?

EBIT is also called operating profit.

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

Exam 9: Current Liabilities and Long-Term Debt

There are times when contingent liabilities are never recorded.

Which of the following liabilities can be classified as either current or long term?

Which of the following would be considered a known liability?

Which of the following would be considered a contingent liability?

Which are generally paid at an hourly rate?

If the market rate of interest is higher than the stated rate of interest,then investors will be willing to pay more and the bond is sold at a premium.

Warranty expense is always recorded in the period that the warranty claims are paid.

One type of liability that is easy to overlook is a(n):

Bonds are interest-bearing notes that are issued to a single lender.

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 HI portion of social security for December?

The tax rate on the OASDI portion of FICA is:

A $250,000 issue of bonds that sold for $275,000 matures on June 25,2020.The journal entry to record the payment of the bond on the maturity date is to:

The journal entry to record $200,000 of bonds that were issued at 97 would be to:

A company will want a lower interest coverage ratio if it is unsure of its EBIT.

Accrued liabilities,such as interest payable,would be considered a(n):

$300,000 of 10%,20-year bonds were sold for $320,000 on January 1.The bonds require semiannual interest payments on June 30 and December 31.The entry to record the June 30 interest payment on the bonds would be to:

Bonds that are backed only by the credit of the issuing company are:

On January 1,Clive Corporation signed a $175,000,8%,30-year mortgage that requires semiannual payments of $7,735 on June 30 and December 31 of each year.The journal entry to record the first semiannual payment would be (round interest calculation to the nearest dollar)to:

If a $6,000,10 percent,10-year bond was issued at 104 on October 1,how much will accrued interest payable be on December 31 if interest payments are made annually?

EBIT is also called operating profit.

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