Question 1

What accounting concept requires a company to accrue interest expense on a note payable?

Accepted Answer

The matchi

Question 2

Fisher Company has been named as the defendant in a class action lawsuit.Indicate whether each of the following statements regarding the lawsuit is true or false.
_____ a)If the outcome is likely,a liability should be recognized on the balance sheet for the full amount of the suit,even if the company's attorneys estimate the outcome to be much lower.
_____ b)If the outcome is likely,but cannot be reasonably estimated,the contingency should be disclosed in the notes to the financial statements.
_____ c)If the outcome is reasonably possible,the contingency should be disclosed in the notes to the financial statements.
_____ d)Every lawsuit,regardless how frivolous,should be disclosed in the notes to the financial statements.
_____ e)If an active hurricane season has been predicted for the Florida gulf coast,businesses in that region should not disclose contingencies for catastrophic loss in the notes to their financial statements.

Accepted Answer

a)False b)

Question 3

The current ratio is a measure of a company's liquidity.

Accepted Answer

A) True 
 B)False

Question 4

A company's classified balance sheet shows current assets of $8,650 and current liabilities of $6,000.The company's current ratio is closest to:

Accepted Answer

A) 0.69 to 1 
B) 1.44 to 1 
C) 1.16 to 1 
D) 3.26 to 1 
A) 0.69 to 1 
B) 1.44 to 1 
C) 1.16 to 1 
D) 3.26 to 1

Question 5

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts.Enter only one letter for each element.
  
-Gilliam Co.repaid a note payable on September 30,2016.The 8-month note had been issued on February 1,2016.The $20,800 cash payment included a $20,000 repayment of principal and an $800 payment for interest.

Accepted Answer

(D)(D)(D)(

Question 6

A classified balance sheet is necessary for calculating a company's current ratio.

Accepted Answer

A) True 
 B)False

Question 7

Recording an adjusting entry for product warranties is a claims exchange transaction.

Accepted Answer

A) True 
 B)False

Question 8

The amount of cash flow from operating activities that would appear on the 2017 statement of cash flows would be:

Accepted Answer

A) $770 inflow 
B) $1,400 inflow 
C) $38,520 outflow 
D) $1,120 outflow 
A) $770 inflow 
B) $1,400 inflow 
C) $38,520 outflow 
D) $1,120 outflow

Question 9

When calculating interest expense on a 6-month note,multiply the principal by the interest rate,and then multiply by 6/12.

Accepted Answer

A) True 
 B)False

Question 10

Why does the recording of a taxable sale increase a company's liabilities?

Accepted Answer

Liabilities increase because t

Question 11

Selling $130 of merchandise to a customer for $200 cash in a state where the sales tax rate is 4%:

Accepted Answer

A) Increases cash flow from operating activities by $208. 
B) Increases total assets by $78. 
C) Increases equity by $70. 
D) All of these answer choices are correct. 
A) Increases cash flow from operating activities by $208. 
B) Increases total assets by $78. 
C) Increases equity by $70. 
D) All of these answer choices are correct.

Question 12

How does the going concern assumption affect accounting for notes payable?

Accepted Answer

A) It dictates that notes payable be reported at their face value. 
B) It dictates that interest expense be accrued at the end of the accounting period. 
C) It dictates that notes payable be reported at their net realizable value. 
D) It dictates that interest expense be paid when the note matures. 
A) It dictates that notes payable be reported at their face value. 
B) It dictates that interest expense be accrued at the end of the accounting period. 
C) It dictates that notes payable be reported at their net realizable value. 
D) It dictates that interest expense be paid when the note matures.

Question 13

When do the effects of product warranties appear on the statement of cash flows?

Accepted Answer

A) When the sale of merchandise is made. 
B) When the warranty obligation is recognized. 
C) When there is a settlement of a warranty claim made by a customer. 
D) None of these answer choices are correct. 
A) When the sale of merchandise is made. 
B) When the warranty obligation is recognized. 
C) When there is a settlement of a warranty claim made by a customer. 
D) None of these answer choices are correct.

Question 14

The following is a list of balance sheet accounts (in random order)and balances for the Premium Office Supply Company.They have been updated as of December 31,2016.
Required: Prepare a classified balance sheet for Premium Office Supply Company at December 31,2016.

Accepted Answer

The answer of The following is a list of balance...

Question 15

A company with a high current ratio should be concerned that it is not maximizing its earnings potential.

Accepted Answer

A) True 
 B)False

Question 16

On October 1,2015,Harrison Company borrowed money by issuing a $24,000 face value discount note to its bank.The note had an 8% discount rate and had a term of 1 year.On that date,Harrison recorded a Discount on Notes Payable in the amount of $1,920.

Accepted Answer

A) True 
 B)False

Question 17

What factor distinguishes an employee from an independent contractor?

Accepted Answer

A) The amount of the pay. 
B) Whether or not the company supervises and controls the work. 
C) Whether or not the work is performed on company property. 
D) Whether the individual chooses to be treated as an independent contractor. 
A) The amount of the pay. 
B) Whether or not the company supervises and controls the work. 
C) Whether or not the work is performed on company property. 
D) Whether the individual chooses to be treated as an independent contractor.

Question 18

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts.Enter only one letter for each element.
  
-Charles Company paid Jason Hewitt for work he performed as an independent contractor.The work had not been previously accrued.

Accepted Answer

(D)(N)(D)(

Question 19

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.You do not need to enter amounts.Enter only one letter for each element.
  
-On October 1,2015,Kramer Co.issued a one-year discount note with a face value of $100,000 and interest of 6% to the North Star Bank and received cash in the amount of $94,000.

Accepted Answer

(I)(I)(N)(

Question 20

Greer Company pays Jamal Perry a salary of $3,000 per week.How much FICA tax must Greer pay on Jamal's behalf,including both the employee and employer portions?

Accepted Answer

A) $225. 
B) $360. 
C) $0.00 Jamal is responsible for making his own payments. 
D) $450. 
A) $225. 
B) $360. 
C) $0.00 Jamal is responsible for making his own payments. 
D) $450.

What accounting concept requires a company to accrue interest expense on a note payable?

The current ratio is a measure of a company's liquidity.

A company's classified balance sheet shows current assets of $8,650 and current liabilities of $6,000.The company's current ratio is closest to:

A classified balance sheet is necessary for calculating a company's current ratio.

Recording an adjusting entry for product warranties is a claims exchange transaction.

The amount of cash flow from operating activities that would appear on the 2017 statement of cash flows would be:

When calculating interest expense on a 6-month note,multiply the principal by the interest rate,and then multiply by 6/12.

Why does the recording of a taxable sale increase a company's liabilities?

Selling $130 of merchandise to a customer for $200 cash in a state where the sales tax rate is 4%:

How does the going concern assumption affect accounting for notes payable?

When do the effects of product warranties appear on the statement of cash flows?

The following is a list of balance sheet accounts (in random order)and balances for the Premium Office Supply Company.They have been updated as of December 31,2016. Required: Prepare a classified balance sheet for Premium Office Supply Company at December 31,2016.

A company with a high current ratio should be concerned that it is not maximizing its earnings potential.

On October 1,2015,Harrison Company borrowed money by issuing a $24,000 face value discount note to its bank.The note had an 8% discount rate and had a term of 1 year.On that date,Harrison recorded a Discount on Notes Payable in the amount of $1,920.

What factor distinguishes an employee from an independent contractor?

Greer Company pays Jamal Perry a salary of $3,000 per week.How much FICA tax must Greer pay on Jamal's behalf,including both the employee and employer portions?

An Introduction to Accounting

Understanding the Accounting Cycle

The Double-Entry Accounting System

Accounting for Merchandising Businesses

Accounting for Inventories

Internal Control and Accounting for Cash

Accounting for Receivables

Accounting for Long-Term Operational Assets

Accounting for Long-Term Debt

Proprietorships,partnerships,and Corporations

Statement of Cash Flows

Financial Statement Analysis

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Exam 9: Accounting for Current Liabilities and Payroll

What accounting concept requires a company to accrue interest expense on a note payable?

The current ratio is a measure of a company's liquidity.

A company's classified balance sheet shows current assets of $8,650 and current liabilities of $6,000.The company's current ratio is closest to:

A classified balance sheet is necessary for calculating a company's current ratio.

Recording an adjusting entry for product warranties is a claims exchange transaction.

The amount of cash flow from operating activities that would appear on the 2017 statement of cash flows would be:

When calculating interest expense on a 6-month note,multiply the principal by the interest rate,and then multiply by 6/12.

Why does the recording of a taxable sale increase a company's liabilities?

Selling $130 of merchandise to a customer for $200 cash in a state where the sales tax rate is 4%:

How does the going concern assumption affect accounting for notes payable?

When do the effects of product warranties appear on the statement of cash flows?

The following is a list of balance sheet accounts (in random order)and balances for the Premium Office Supply Company.They have been updated as of December 31,2016. Required: Prepare a classified balance sheet for Premium Office Supply Company at December 31,2016.

A company with a high current ratio should be concerned that it is not maximizing its earnings potential.

On October 1,2015,Harrison Company borrowed money by issuing a $24,000 face value discount note to its bank.The note had an 8% discount rate and had a term of 1 year.On that date,Harrison recorded a Discount on Notes Payable in the amount of $1,920.

What factor distinguishes an employee from an independent contractor?

Greer Company pays Jamal Perry a salary of $3,000 per week.How much FICA tax must Greer pay on Jamal's behalf,including both the employee and employer portions?

An Introduction to Accounting

Understanding the Accounting Cycle

The Double-Entry Accounting System

Accounting for Merchandising Businesses

Accounting for Inventories

Internal Control and Accounting for Cash

Accounting for Receivables

Accounting for Long-Term Operational Assets

Accounting for Long-Term Debt

Proprietorships,partnerships,and Corporations

Statement of Cash Flows

Financial Statement Analysis

Filters