Exam 11: Current Liabilities and Payroll

Barter Company sold goods for $875,500 on account. The company operates in a state that imposes a 6% sales tax. Which of the following would be the amount of the sales tax payable to the state?

Which of the following is included in the entry to record the employer's payroll taxes?

FUTA, Federal unemployment compensation tax, is not withheld from an employees' gross earnings.

Jade signs a $6,500, 8.5%, six-month note dated November 1, 2013. The interest expense recorded for this note in 2013 will be:

Revenue collected but not yet earned is recorded as:

________ is a pay amount stated at an hourly rate.

When a company co-signs a note payable for another entity, a current liability must be recorded.

At the maturity of a note payable, a borrower will pay:

Steve's gross pay for the week is $980. His yearly pay is under the limit for OASDI. Assume that the rate for state and federal unemployment compensation taxes is 6.2%, and that Steve's pay year-to-date has previously exceeded the $7,000 cap. His yearly pay is under the limit for OASDI. How much is the total amount of payroll taxes that Steve'e employer must record as payroll tax expenses? (Do not round your intermediate calculations. Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%.)

The employee federal and state income tax and Social Security tax are optional deductions under payroll withholding deductions.

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

Notes payable are considered long-term debts, usually involving interest, if they are to be paid within one year or less.

Which of the following would be included in the journal entry to record the payment of sales taxes payable?

SUTA, State unemployment compensation tax, is not withheld from an employees' gross earnings.

Which of the following deductions is paid by both the employer and employee?

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, what effect would it have on the financial reporting of the company?

Which of the following statements about the times-interest-earned ratio is true?

Berkley's gross pay for the month is $5,400. His deduction for federal income tax is based on a rate of 18%. He has no voluntary deductions. His yearly pay is under the limit for OASDI. What is the amount of Berkley's net pay? (Assume a FICA-OASDI Tax of 4.2% and FICA-Medicare Tax of 1.45%.)

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

Northwest Company's records indicate that January sales on account were $109,000. The company's management estimates warranty expense to be 3.6% of sales. Provide the journal entry to record warranty expense.