Question 1

Federal unemployment compensation tax is a tax that is paid only by employers.

Accepted Answer

A) True 
 B)False  True

Question 2

Which of the following will be classified as a current liability?

Accepted Answer

A) Two-year notes payable 
B) Bonds payable 
C) Mortgage loan 
D) Unearned rent 
A) Two-year notes payable 
B) Bonds payable 
C) Mortgage loan 
D) Unearned rent D

Question 3

As interest is recorded on an interest-bearing note,the Interest Expense account is:

Accepted Answer

A) decreased; the Interest Payable account is increased. 
B) increased; the Interest Payable account is increased. 
C) increased; the Notes Payable account is decreased. 
D) increased; the Notes Payable account is increased. 
A) decreased; the Interest Payable account is increased. 
B) increased; the Interest Payable account is increased. 
C) increased; the Notes Payable account is decreased. 
D) increased; the Notes Payable account is increased. B

Question 4

liabilities may arise from past transactions if certain events occur in the future.

Accepted Answer

A) Current 
B) Noncurrent 
C) Long-term 
D) Contingent 
A) Current 
B) Noncurrent 
C) Long-term 
D) Contingent

Question 5

On March 15,Silver Co.issued a $80,000,5%,90-day note payable to Gold Co.How much will Silver Co.have to pay at maturity? (Assume 360 days in a year)

Accepted Answer

A) $84,000 
B) $79,000 
C) $80,000 
D) $81,000 
A) $84,000 
B) $79,000 
C) $80,000 
D) $81,000

Question 6

If prior to the last weekly payroll period of the calendar year,the cumulative earnings for an employee are $75,200,earnings subject to social security tax are $106,800,and the tax rate is 7.5%,the employer's social security tax on the $800 gross earnings paid on the last day of the year is $60.

Accepted Answer

A) True 
 B)False

Question 7

An employee receives an hourly rate of $30,with time and a half for all hours worked in excess of 40 during a week.Payroll data for the current week are as follows: hours worked,46; federal income tax withheld,$300; cumulative earnings for year prior to current week,$90,700; social security tax rate,6.0% on maximum of $106,800; and Medicare tax rate,1.5% on all earnings.What is the net pay for the employee?

Accepted Answer

A) $1,147.95 
B) $1,059.75 
C) $1,470.00 
D) $1,359.75 
A) $1,147.95 
B) $1,059.75 
C) $1,470.00 
D) $1,359.75

Question 8

If the market rate of interest is 6% and a corporation's bonds bear interest at 7%,the bonds will sell at a discount.

Accepted Answer

A) True 
 B)False

Question 9

If $4,000,000 of 12% bonds are issued at 103 1/4,the amount of cash received from the sale is:

Accepted Answer

A) $4,040,000. 
B) $4,000,000. 
C) $4,130,000. 
D) $3,520,000. 
A) $4,040,000. 
B) $4,000,000. 
C) $4,130,000. 
D) $3,520,000.

Question 10

The declaration of a stock dividend decreases a corporation's stockholders' equity and decreases its liabilities.

Accepted Answer

A) True 
 B)False

Question 11

During the first year of operations,employees earned vacation pay of $50,000.The vacations will be taken during the second year.The vacation pay expense should be recorded in the first year of operations.

Accepted Answer

A) True 
 B)False

Question 12

For accounting purposes,stated value is treated the same way as par value.

Accepted Answer

A) True 
 B)False

Question 13

If $500,000 of 8% bonds are issued at 102,the amount of cash received from the sale is:

Accepted Answer

A) $540,000 
B) $510,000 
C) $500,000 
D) $530,000 
A) $540,000 
B) $510,000 
C) $500,000 
D) $530,000

Question 14

A bond is simply a form of an interest-bearing note.

Accepted Answer

A) True 
 B)False

Question 15

The following information is for employee William Heedy for the week ended March 15.

Accepted Answer

(a) (1) 40 hours at $16 $640.00 8 hours

Question 16

Ratio of liabilities to total assets is computed by:

Accepted Answer

A) dividing total liabilities by total assets. 
B) dividing total current liabilities by total current assets. 
C) dividing total current liabilities by total quick assets. 
D) dividing total liabilities by total quick assets. 
A) dividing total liabilities by total assets. 
B) dividing total current liabilities by total current assets. 
C) dividing total current liabilities by total quick assets. 
D) dividing total liabilities by total quick assets.

Question 17

The summary of the payroll for the monthly pay period ending July 15 indicated the following:

Accepted Answer

(a) Assets = Liabilities + Stockholders'

Question 18

The two main sources of stockholders' equity are investments contributed by stockholders and net income retained in the business.

Accepted Answer

A) True 
 B)False

Question 19

The main source of paid-in capital is from issuing stock.

Accepted Answer

A) True 
 B)False

Question 20

If $1,000,000 of 10% bonds are issued at 98,the amount of cash received from the sale is:

Accepted Answer

A) $980,000. 
B) $975,000. 
C) $987,500. 
D) $1,000,000. 
A) $980,000. 
B) $975,000. 
C) $987,500. 
D) $1,000,000.

Federal unemployment compensation tax is a tax that is paid only by employers.

Which of the following will be classified as a current liability?

As interest is recorded on an interest-bearing note,the Interest Expense account is:

liabilities may arise from past transactions if certain events occur in the future.

On March 15,Silver Co.issued a $80,000,5%,90-day note payable to Gold Co.How much will Silver Co.have to pay at maturity? (Assume 360 days in a year)

If prior to the last weekly payroll period of the calendar year,the cumulative earnings for an employee are $75,200,earnings subject to social security tax are $106,800,and the tax rate is 7.5%,the employer's social security tax on the $800 gross earnings paid on the last day of the year is $60.

If the market rate of interest is 6% and a corporation's bonds bear interest at 7%,the bonds will sell at a discount.

If $4,000,000 of 12% bonds are issued at 103 1/4,the amount of cash received from the sale is:

The declaration of a stock dividend decreases a corporation's stockholders' equity and decreases its liabilities.

During the first year of operations,employees earned vacation pay of $50,000.The vacations will be taken during the second year.The vacation pay expense should be recorded in the first year of operations.

For accounting purposes,stated value is treated the same way as par value.

If $500,000 of 8% bonds are issued at 102,the amount of cash received from the sale is:

A bond is simply a form of an interest-bearing note.

The following information is for employee William Heedy for the week ended March 15.

Ratio of liabilities to total assets is computed by:

The summary of the payroll for the monthly pay period ending July 15 indicated the following:

The two main sources of stockholders' equity are investments contributed by stockholders and net income retained in the business.

The main source of paid-in capital is from issuing stock.

If $1,000,000 of 10% bonds are issued at 98,the amount of cash received from the sale is:

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley, internal Control, and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

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Exam 8: Liabilities and Stockholders Equity

Federal unemployment compensation tax is a tax that is paid only by employers.

Which of the following will be classified as a current liability?

As interest is recorded on an interest-bearing note,the Interest Expense account is:

liabilities may arise from past transactions if certain events occur in the future.

On March 15,Silver Co.issued a $80,000,5%,90-day note payable to Gold Co.How much will Silver Co.have to pay at maturity? (Assume 360 days in a year)

If prior to the last weekly payroll period of the calendar year,the cumulative earnings for an employee are $75,200,earnings subject to social security tax are $106,800,and the tax rate is 7.5%,the employer's social security tax on the $800 gross earnings paid on the last day of the year is $60.

If the market rate of interest is 6% and a corporation's bonds bear interest at 7%,the bonds will sell at a discount.

If $4,000,000 of 12% bonds are issued at 103 1/4,the amount of cash received from the sale is:

The declaration of a stock dividend decreases a corporation's stockholders' equity and decreases its liabilities.

During the first year of operations,employees earned vacation pay of $50,000.The vacations will be taken during the second year.The vacation pay expense should be recorded in the first year of operations.

For accounting purposes,stated value is treated the same way as par value.

If $500,000 of 8% bonds are issued at 102,the amount of cash received from the sale is:

A bond is simply a form of an interest-bearing note.

The following information is for employee William Heedy for the week ended March 15.

Ratio of liabilities to total assets is computed by:

The summary of the payroll for the monthly pay period ending July 15 indicated the following:

The two main sources of stockholders' equity are investments contributed by stockholders and net income retained in the business.

The main source of paid-in capital is from issuing stock.

If $1,000,000 of 10% bonds are issued at 98,the amount of cash received from the sale is:

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley, internal Control, and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Financial Statement Analysis

Accounting Systems for Manufacturing Businesses

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters