Question 1

Most employers use payroll checks drawn on a special bank account for paying the payroll.

Accepted Answer

A) True 
 B)False

Question 2

For a current liability to exist,the liability must be due usually within a year and must be paid out of current assets.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following forms is typically given to employees at the end of the calendar year so that employees can file their individual income tax forms?

Accepted Answer

A) Employee's Withholding Allowance Certificate W­4 
B) Wage and Tax Statement Form W-2 
C) Employer's Quarterly Federal Tax Return Form 941 
D) 401k plans 
A) Employee's Withholding Allowance Certificate W­4 
B) Wage and Tax Statement Form W-2 
C) Employer's Quarterly Federal Tax Return Form 941 
D) 401k plans

Question 4

Which of the following will have no effect on an employee's take-home pay?

Accepted Answer

A) social security tax 
B) unemployment tax 
C) marital status 
D) number of exemptions claimed 
A) social security tax 
B) unemployment tax 
C) marital status 
D) number of exemptions claimed

Question 5

The amount borrowed is equal to the face amount of the note on an interest bearing note payable.

Accepted Answer

A) True 
 B)False

Question 6

Current liabilities are due

Accepted Answer

A) but not receivable for more than one year 
B) but not payable for more than one year 
C) and receivable within one year 
D) and payable within one year 
A) but not receivable for more than one year 
B) but not payable for more than one year 
C) and receivable within one year 
D) and payable within one year

Question 7

Chang Co.issued a $50,000,120-day,discounted note to Guarantee Bank.The discount rate is 6%.Assuming a 360-day year,the cash proceeds to Chang Co.are

Accepted Answer

A) $49,750 
B) $47,000 
C) $49,000 
D) $51,000 
A) $49,750 
B) $47,000 
C) $49,000 
D) $51,000

Question 8

An interest-beating note is a loan in which the lender deducts interest from the amount loaned before the money is advanced to the borrower.

Accepted Answer

A) True 
 B)False

Question 9

For proper matching of revenues and expenses,the estimated cost of fringe benefits must be recognized as an expense of the period during which the employee earns the benefits.

Accepted Answer

A) True 
 B)False

Question 10

Employers are required to compute and report payroll taxes on a calendar-year basis,even if a different fiscal year is used for financial reporting and income tax purposes.

Accepted Answer

A) True 
 B)False

Question 11

The following totals for the month of June were taken from the payroll register of Young Company:
 $\begin{array}{lr}
\text { Salaries expense } & \$ 15,000 \
\text { Social security and Medicare taxes withheld } & 1,125 \
\text { Income taxes withheld } & 3,000 \
\text { Retirement savings } & 500 \
\text { Salaries subject to federal and state } & \
\text { unemployment taxes of } 6.2 \text { percent } & 4,000
\end{array}$ 
The entry to record the accrual of employer's payroll taxes would include a debit to

Accepted Answer

A) Payroll Tax Expense for $2,498 
B) Social Security and Medicare Tax Payable for $2,250 
C) Payroll Tax Expense for $1,373 
D) Payroll Tax Expense for $1,125 
A) Payroll Tax Expense for $2,498 
B) Social Security and Medicare Tax Payable for $2,250 
C) Payroll Tax Expense for $1,373 
D) Payroll Tax Expense for $1,125

Question 12

Payroll taxes are based on the employee's net pay.

Accepted Answer

A) True 
 B)False

Question 13

On January 5,Thomas Company,a calendar-year company,issued $1,000,000 of notes payable,of which $250,000 is due on January 1 each of the next four years.The proper balance sheet presentation on December 31 is

Accepted Answer

A) Current Liabilities,$1,000,000 
B) Current Liabilities,$250,000; Long-Term Debt,$750,000 
C) Long-Term Debt,$1,000,000 
D) Current Liabilities,$750,000; Long-Term Debt,$250,000 
A) Current Liabilities,$1,000,000 
B) Current Liabilities,$250,000; Long-Term Debt,$750,000 
C) Long-Term Debt,$1,000,000 
D) Current Liabilities,$750,000; Long-Term Debt,$250,000

Question 14

Martinez Co.borrowed $50,000 on March 1 of the current year by signing a 60­day,9%,interest-bearing note.Assuming a 360-day year,when the note is paid on April 30,the entry to record the payment should include a

Accepted Answer

A) debit to Interest Payable for $750 
B) debit to Interest Expense for $750 
C) credit to Cash for $50,000 
D) credit to Cash for $54,500 
A) debit to Interest Payable for $750 
B) debit to Interest Expense for $750 
C) credit to Cash for $50,000 
D) credit to Cash for $54,500

Question 15

181.	For Company A and Company B:

a	Calculate the quick ratio for each company.
b	Comment on which one is more able to meet current liabilities.

Accepted Answer

a  	Company A Quick ratio: $42

Question 16

Hadley Industries warrants its products for one year.The estimated product warranty expense is 4% of sales.Assume that sales were $210,000 for June.In July,a customer received warranty repairs requiring $205 of parts and $75 of labor.
a. Journalize the adjusting entry required at June 30,the end of the first month of the current year,to record the estimated product warranty expense.
b. Journalize the entry to record the warranty work provided in July.

Accepted Answer

None

Question 17

The journal entry to record the payment of an interest-bearing note is

Accepted Answer

A) debit Cash; credit Notes Payable 
B) debit Accounts Payable; credit Cash 
C) debit Notes Payable and Interest Expense; credit Cash 
D) debit Notes Payable and Interest Receivable; credit Cash 
A) debit Cash; credit Notes Payable 
B) debit Accounts Payable; credit Cash 
C) debit Notes Payable and Interest Expense; credit Cash 
D) debit Notes Payable and Interest Receivable; credit Cash

Question 18

The current portion of long-term debt should

Accepted Answer

A) be classified as a long-term liability 
B) not be separated from the long-term portion of debt 
C) be paid immediately 
D) be reclassified as a current liability 
A) be classified as a long-term liability 
B) not be separated from the long-term portion of debt 
C) be paid immediately 
D) be reclassified as a current liability

Question 19

Use the following information and calculate the quick ratio for Davis Company and for Bender Inc.
a Calculate the quick ratio for each company.
b Comment on which one is more able to meet current liabilities.

Accepted Answer

a. Davis Co. Quick r

Question 20

The amount of federal income taxes withheld from an employee's gross pay is recorded as an

Accepted Answer

A) payroll expense 
B) contra account 
C) asset 
D) liability 
A) payroll expense 
B) contra account 
C) asset 
D) liability

Most employers use payroll checks drawn on a special bank account for paying the payroll.

For a current liability to exist,the liability must be due usually within a year and must be paid out of current assets.

Which of the following forms is typically given to employees at the end of the calendar year so that employees can file their individual income tax forms?

Which of the following will have no effect on an employee's take-home pay?

The amount borrowed is equal to the face amount of the note on an interest bearing note payable.

Current liabilities are due

Chang Co.issued a $50,000,120-day,discounted note to Guarantee Bank.The discount rate is 6%.Assuming a 360-day year,the cash proceeds to Chang Co.are

An interest-beating note is a loan in which the lender deducts interest from the amount loaned before the money is advanced to the borrower.

For proper matching of revenues and expenses,the estimated cost of fringe benefits must be recognized as an expense of the period during which the employee earns the benefits.

Employers are required to compute and report payroll taxes on a calendar-year basis,even if a different fiscal year is used for financial reporting and income tax purposes.

Payroll taxes are based on the employee's net pay.

On January 5,Thomas Company,a calendar-year company,issued $1,000,000 of notes payable,of which $250,000 is due on January 1 each of the next four years.The proper balance sheet presentation on December 31 is

Martinez Co.borrowed $50,000 on March 1 of the current year by signing a 60day,9%,interest-bearing note.Assuming a 360-day year,when the note is paid on April 30,the entry to record the payment should include a

181. For Company A and Company B: a Calculate the quick ratio for each company. b Comment on which one is more able to meet current liabilities.

The journal entry to record the payment of an interest-bearing note is

The current portion of long-term debt should

Use the following information and calculate the quick ratio for Davis Company and for Bender Inc. a Calculate the quick ratio for each company. b Comment on which one is more able to meet current liabilities.

The amount of federal income taxes withheld from an employee's gross pay is recorded as an

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley,internal Control,and Cash

Receivables

Fixed Assets and Intangible Assets

Corporations: Organization,stock Transactions,and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 10: Current Liabilities and Payroll

Most employers use payroll checks drawn on a special bank account for paying the payroll.

For a current liability to exist,the liability must be due usually within a year and must be paid out of current assets.

Which of the following forms is typically given to employees at the end of the calendar year so that employees can file their individual income tax forms?

Which of the following will have no effect on an employee's take-home pay?

The amount borrowed is equal to the face amount of the note on an interest bearing note payable.

Current liabilities are due

Chang Co.issued a $50,000,120-day,discounted note to Guarantee Bank.The discount rate is 6%.Assuming a 360-day year,the cash proceeds to Chang Co.are

An interest-beating note is a loan in which the lender deducts interest from the amount loaned before the money is advanced to the borrower.

For proper matching of revenues and expenses,the estimated cost of fringe benefits must be recognized as an expense of the period during which the employee earns the benefits.

Employers are required to compute and report payroll taxes on a calendar-year basis,even if a different fiscal year is used for financial reporting and income tax purposes.

Payroll taxes are based on the employee's net pay.

On January 5,Thomas Company,a calendar-year company,issued $1,000,000 of notes payable,of which $250,000 is due on January 1 each of the next four years.The proper balance sheet presentation on December 31 is

Martinez Co.borrowed $50,000 on March 1 of the current year by signing a 60­day,9%,interest-bearing note.Assuming a 360-day year,when the note is paid on April 30,the entry to record the payment should include a

181. For Company A and Company B: a Calculate the quick ratio for each company. b Comment on which one is more able to meet current liabilities.

The journal entry to record the payment of an interest-bearing note is

The current portion of long-term debt should

Use the following information and calculate the quick ratio for Davis Company and for Bender Inc. a Calculate the quick ratio for each company. b Comment on which one is more able to meet current liabilities.

The amount of federal income taxes withheld from an employee's gross pay is recorded as an

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley,internal Control,and Cash

Receivables

Fixed Assets and Intangible Assets

Corporations: Organization,stock Transactions,and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Filters

Martinez Co.borrowed $50,000 on March 1 of the current year by signing a 60day,9%,interest-bearing note.Assuming a 360-day year,when the note is paid on April 30,the entry to record the payment should include a