Question 1

Which of the following would be included in the journal entry to record the payment of accrued sales tax?

Accepted Answer

A)  A debit to Sales tax payable 
B)  A credit to Sales tax expense 
C)  A debit to Sales tax expense 
D)  A credit to Sales tax payable 
A)  A debit to Sales tax payable 
B)  A credit to Sales tax expense 
C)  A debit to Sales tax expense 
D)  A credit to Sales tax payable

Question 2

An accrued expense is an expense that has been incurred,but has not yet been paid.

Accepted Answer

A) True 
 B)False

Question 3

Where does Unearned subscription revenue appear on the balance sheet?

Accepted Answer

A)  Under Long-term investments 
B)  Under Current liabilities or Long-term liabilities 
C)  Under Current assets or Long-term investments 
D)  Under Long-term assets 
A)  Under Long-term investments 
B)  Under Current liabilities or Long-term liabilities 
C)  Under Current assets or Long-term investments 
D)  Under Long-term assets

Question 4

SUTA (state unemployment compensation)tax is paid by the employee and deducted from gross pay.

Accepted Answer

A) True 
 B)False

Question 5

Tom's gross pay for this month is $8,150.His gross pay year-to-date,prior to this month totaled $101,000.Tom's rate for federal income tax is 24%.His voluntary deductions total $900.What is the amount of Tom's net pay?

Accepted Answer

A)  $4,816.22 
B)  $5,716.00 
C)  $4,670.52 
D)  $4,290.65 
A)  $4,816.22 
B)  $5,716.00 
C)  $4,670.52 
D)  $4,290.65

Question 6

Contingent liabilities sometimes pose an ethical challenge because they are not real liabilities and are easy to overlook.

Accepted Answer

A) True 
 B)False

Question 7

Barnaby Sales made total cash sales in January of $500,000,and they are subject to a 6% sales tax.Please provide the summary entry to record sales revenues and sales tax payable.
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Accepted Answer

Calculations: $500,

Question 8

Mary's gross pay for the week is $1,000.Mary's deduction for federal income tax is based on a rate of 20%.Mary has voluntary deductions of $150.Her yearly pay is under the limit for OASDI.What is the amount of FICA deducted from her pay?

Accepted Answer

A)  $59.80 
B)  $76.50 
C)  $65.00 
D)  $153.00 
A)  $59.80 
B)  $76.50 
C)  $65.00 
D)  $153.00

Question 9

Ace Appliances sells dishwashers with a 3-year warranty.In 2013,there are $90,000 of sales revenues for dishwashers.The company estimates warranty expense at 3% of revenues.What is the 2013 warranty expense?

Accepted Answer

A)  $2,700 
B)  $800 
C)  $0 
D)  $3,000 
A)  $2,700 
B)  $800 
C)  $0 
D)  $3,000

Question 10

Unearned revenue is an obligation to provide goods or services to the customer.

Accepted Answer

A) True 
 B)False

Question 11

ABC Company signed a 5-year note payable for $80,000 at 9% annual interest.What is the interest expense for December 31,2012 if the note was signed on May 1,2012?

Accepted Answer

A)  $7,200 
B)  $4,800 
C)  $2,400 
D)  $36,000 
A)  $7,200 
B)  $4,800 
C)  $2,400 
D)  $36,000

Question 12

Which of the following is the proper treatment for a liability that exists,but the exact amount of which is not known?

Accepted Answer

A)  The liability should be treated as a contingent liability. 
B)  The amount of the liability should be estimated and recorded. 
C)  The liability should be ignored. 
D)  The liability should be reported in the notes to the financial statements. 
A)  The liability should be treated as a contingent liability. 
B)  The amount of the liability should be estimated and recorded. 
C)  The liability should be ignored. 
D)  The liability should be reported in the notes to the financial statements.

Question 13

Gross pay is the total amount of compensation earned by an employee,before any deductions are made.

Accepted Answer

A) True 
 B)False

Question 14

The old age,survivors,and disability insurance portion of FICA taxes is imposed on all of an individual employee's earnings.

Accepted Answer

A) True 
 B)False

Question 15

When a note is payable in installments,the installments must be separately recorded in two different accounts-Short-term notes payable and Long-term notes payable-depending on the due dates of the installments.

Accepted Answer

A) True 
 B)False

Question 16

For which of the following taxes is there a ceiling on the amount of annual earnings subject to the tax?

Accepted Answer

A)  FICA 
B)  Medicare 
C)  Federal income tax 
D)  State income tax 
A)  FICA 
B)  Medicare 
C)  Federal income tax 
D)  State income tax

Question 17

Art Parrish,the sole employee of Parrish Sales,has gross salary for March of $4,000.The entire amount is under the OASDI limit of $106,800,and thus subject to FICA.He is also subject to federal income tax at a rate of 18%.Art has a deduction of $320 for health insurance and $80 for United Way.Please provide the second entry in the payroll cycle to record the disbursement of his net pay.
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Accepted Answer

Calculations:
$4,000 × 18% =

Question 18

Which of the following is associated with cash received in advance for services to be performed in the future?

Accepted Answer

A)  Accounts payable 
B)  Estimated warranty payable 
C)  Accrued expense 
D)  Unearned revenue 
A)  Accounts payable 
B)  Estimated warranty payable 
C)  Accrued expense 
D)  Unearned revenue

Question 19

Model Maker sold 6,000 one-year prepaid subscriptions to its monthly magazine for $40 per subscription.The subscription year runs from September to August.What is the December 31 adjusting entry for subscription revenue?
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Accepted Answer

Calculations: $6,00

Question 20

The Statewide Sales Company has gross pay for March of $45,000.The first journal entry in the payroll cycle to record salary expense would include a credit to Cash for $45,000.

Accepted Answer

A) True 
 B)False

Which of the following would be included in the journal entry to record the payment of accrued sales tax?

An accrued expense is an expense that has been incurred,but has not yet been paid.

Where does Unearned subscription revenue appear on the balance sheet?

SUTA (state unemployment compensation)tax is paid by the employee and deducted from gross pay.

Tom's gross pay for this month is $8,150.His gross pay year-to-date,prior to this month totaled $101,000.Tom's rate for federal income tax is 24%.His voluntary deductions total $900.What is the amount of Tom's net pay?

Contingent liabilities sometimes pose an ethical challenge because they are not real liabilities and are easy to overlook.

Barnaby Sales made total cash sales in January of $500,000,and they are subject to a 6% sales tax.Please provide the summary entry to record sales revenues and sales tax payable.

Mary's gross pay for the week is $1,000.Mary's deduction for federal income tax is based on a rate of 20%.Mary has voluntary deductions of $150.Her yearly pay is under the limit for OASDI.What is the amount of FICA deducted from her pay?

Ace Appliances sells dishwashers with a 3-year warranty.In 2013,there are $90,000 of sales revenues for dishwashers.The company estimates warranty expense at 3% of revenues.What is the 2013 warranty expense?

Unearned revenue is an obligation to provide goods or services to the customer.

ABC Company signed a 5-year note payable for $80,000 at 9% annual interest.What is the interest expense for December 31,2012 if the note was signed on May 1,2012?

Which of the following is the proper treatment for a liability that exists,but the exact amount of which is not known?

Gross pay is the total amount of compensation earned by an employee,before any deductions are made.

The old age,survivors,and disability insurance portion of FICA taxes is imposed on all of an individual employee's earnings.

When a note is payable in installments,the installments must be separately recorded in two different accounts-Short-term notes payable and Long-term notes payable-depending on the due dates of the installments.

For which of the following taxes is there a ceiling on the amount of annual earnings subject to the tax?

Which of the following is associated with cash received in advance for services to be performed in the future?

Model Maker sold 6,000 one-year prepaid subscriptions to its monthly magazine for $40 per subscription.The subscription year runs from September to August.What is the December 31 adjusting entry for subscription revenue?

The Statewide Sales Company has gross pay for March of $45,000.The first journal entry in the payroll cycle to record salary expense would include a credit to Cash for $45,000.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandising Inventory

Internal Control and Cash

Receivables

Plant Assets and Intangibles

Long-Term Liabilities, bonds Payable, and Classification of Liabilities on the Balance Sheet

Filters

Exam 10: Current Liabilities and Payroll

Which of the following would be included in the journal entry to record the payment of accrued sales tax?

An accrued expense is an expense that has been incurred,but has not yet been paid.

Where does Unearned subscription revenue appear on the balance sheet?

SUTA (state unemployment compensation)tax is paid by the employee and deducted from gross pay.

Tom's gross pay for this month is $8,150.His gross pay year-to-date,prior to this month totaled $101,000.Tom's rate for federal income tax is 24%.His voluntary deductions total $900.What is the amount of Tom's net pay?

Contingent liabilities sometimes pose an ethical challenge because they are not real liabilities and are easy to overlook.

Barnaby Sales made total cash sales in January of $500,000,and they are subject to a 6% sales tax.Please provide the summary entry to record sales revenues and sales tax payable.

Mary's gross pay for the week is $1,000.Mary's deduction for federal income tax is based on a rate of 20%.Mary has voluntary deductions of $150.Her yearly pay is under the limit for OASDI.What is the amount of FICA deducted from her pay?

Ace Appliances sells dishwashers with a 3-year warranty.In 2013,there are $90,000 of sales revenues for dishwashers.The company estimates warranty expense at 3% of revenues.What is the 2013 warranty expense?

Unearned revenue is an obligation to provide goods or services to the customer.

ABC Company signed a 5-year note payable for $80,000 at 9% annual interest.What is the interest expense for December 31,2012 if the note was signed on May 1,2012?

Which of the following is the proper treatment for a liability that exists,but the exact amount of which is not known?

Gross pay is the total amount of compensation earned by an employee,before any deductions are made.

The old age,survivors,and disability insurance portion of FICA taxes is imposed on all of an individual employee's earnings.

When a note is payable in installments,the installments must be separately recorded in two different accounts-Short-term notes payable and Long-term notes payable-depending on the due dates of the installments.

For which of the following taxes is there a ceiling on the amount of annual earnings subject to the tax?

Which of the following is associated with cash received in advance for services to be performed in the future?

Model Maker sold 6,000 one-year prepaid subscriptions to its monthly magazine for $40 per subscription.The subscription year runs from September to August.What is the December 31 adjusting entry for subscription revenue?

The Statewide Sales Company has gross pay for March of $45,000.The first journal entry in the payroll cycle to record salary expense would include a credit to Cash for $45,000.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandising Inventory

Internal Control and Cash

Receivables

Plant Assets and Intangibles

Long-Term Liabilities, bonds Payable, and Classification of Liabilities on the Balance Sheet

Filters