Exam 10: Current Liabilities and Payroll

Which of the following is a major control risk in the payroll area?

Which of the following correctly describes the unearned revenue account?

Good internal controls over payroll would include all of the following EXCEPT that:

Archie's had sales of $6,758.The state sales tax rate is 7%.All sales are cash.What amount will be debited to Cash?

Which of the following is a liability created when a company receives cash for services to be provided in the future?

Which of the following is an important internal control over payroll?

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.The total amount of FICA that the company pays to the government on Art Parrish's behalf is $612.

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%.His year-to-date pay has already exceeded the $7,000 cap for FUTA and SUTA.The fifth journal entry in the payroll cycle to record the payment by the company of payroll taxes to the government includes a debit to FICA payable of $612.

Warranty expense would be included in the operating expense section of the income statement.

In which of the following periods should the estimated warranty liability be debited?

A certain contingent liability was evaluated at year-end; the company felt it was probable that it would become an actual liability,and the amount could be reasonably estimated.If the accountant decided NOT to report it on the balance sheet or in the notes to the financial statement,this could be considered unethical behavior.

Parrish Sales withholds $720 from Art Parrish's paycheck for federal income tax.This amount is part of the company's payroll tax expense.

Which of the following accounting principles requires that warranty expenses must be estimated and recognized in the same period as the related sales revenue is recognized?

Estimated warranty payable would be included in the operating expense section of the income statement.

A $20,000,3-month,8% note payable was issued on November 1,2015.Which of the following would be included in the journal entry required on the note's maturity date?

In which of the following periods should the expense for warranty costs be recorded?

The face amount of a promissory note is called the:

Archie's had sales of $6,758.The state sales tax rate is 7%.All sales are cash.What amount will be credited to Sales revenue?

Which of the following is NOT an expense of the employer?

Carter Company records sales on account of $950,500.The company operates in a state that imposes a 5% sales tax.Which of the following would be the amount of the Sales tax payable to the state?