Question 1

Unearned revenues are amounts received _________from______ for future products or services.

Accepted Answer

in advance

Question 2

An estimated liability is a known obligation of an uncertain amount that can at least be reasonably estimated.

Accepted Answer

A) True 
 B)False

Question 3

The payroll records of a company provided the following data for the weekly pay period ended December 7:
   The FICA Social Security tax rate is 6.2% and the FICA Medicare tax rate is 1.45% on all of this week's wages paid to each employee.The federal and state unemployment tax rates are 0.8% and 5.4%,respectively,on the first $7,000 paid to each employee.Prepare the journal entries to (a) accrue the payroll and (b) record payroll taxes expense.

Accepted Answer

Salaries and Wages Expense = ($1,200 + $

Question 4

On November 1,2012,Bob's Skateboards Store signed a $12,000,3-month,5% note payable to cover a past due account payable.This company uses a calendar year to report financial activity and updates the accounting records monthly.
a.What amount of total interest will the company pay on this note?
b.Prepare Bob's general journal entry to record the issuance of the note payable.
c.Prepare Bob's general journal entry to record the payment of the note on February 1,2013.

Accepted Answer

a.Total interest = $12,000 x 0

Question 5

When the times interest earned ratio declines,the likelihood of default on liabilities increases.

Accepted Answer

A) True 
 B)False

Question 6

A company's income before interest expense and taxes is $250,000 and its interest expense is $100,000.Its times interest earned ratio is equal to .4.

Accepted Answer

A) True 
 B)False

Question 7

An employee earnings report:

Accepted Answer

A) Is the W-2. 
B) Is the W-4. 
C) Is the cumulative record of an employee's hours worked,gross earnings,deductions,and net pay. 
D) Shows the pay period dates,hours worked,gross pay,deductions,and net pay of each employee for every pay period. 
E) Is used to compute the federal income taxes withheld from each employee's gross pay. 
A) Is the W-2. 
B) Is the W-4. 
C) Is the cumulative record of an employee's hours worked,gross earnings,deductions,and net pay. 
D) Shows the pay period dates,hours worked,gross pay,deductions,and net pay of each employee for every pay period. 
E) Is used to compute the federal income taxes withheld from each employee's gross pay.

Question 8

The matching principle requires that interest expense not be accrued on a note payable until the note is paid,even if the end of an accounting period occurs between the signing of a note payable and its maturity date.

Accepted Answer

A) True 
 B)False

Question 9

Tree Frog Company is organized as a LLC and does not pay income taxes.The company has fixed interest expense of $5,750,sales of $253,000,and variable expenses of $189,750.What is the company's times interest earned ratio?

Accepted Answer

A) 44 
B) 33 
C) 11 
D) 10 
E) $63,250 
A) 44 
B) 33 
C) 11 
D) 10 
E) $63,250

Question 10

Debt guarantees are not disclosed because the guarantor is not the primary debtor.

Accepted Answer

A) True 
 B)False

Question 11

Times interest earned ratio is computed by dividing _______________ by interest expense.

Accepted Answer

income bef

Question 12

Apple Company has three employees:
     What is the amount that Apple Company will record as total payroll taxes for August?

Accepted Answer

The answer of Apple Company has three employees:
  ...

Question 13

FUTA taxes are:

Accepted Answer

A) Social Security taxes 
B) Medicare taxes 
C) Employee income taxes 
D) Unemployment taxes 
E) Employee deductions 
A) Social Security taxes 
B) Medicare taxes 
C) Employee income taxes 
D) Unemployment taxes 
E) Employee deductions

Question 14

In the accounting records of a defendant,lawsuits:

Accepted Answer

A) Are estimated liabilities, 
B) Should always be recorded, 
C) Should always be disclosed, 
D) Should be recorded if payment for damages is probable and the amount can be reasonably estimated, 
E) Should never be recorded, 
A) Are estimated liabilities, 
B) Should always be recorded, 
C) Should always be disclosed, 
D) Should be recorded if payment for damages is probable and the amount can be reasonably estimated, 
E) Should never be recorded,

Question 15

A ________________________ is a potential obligation arising from a past transaction or event that depends on a future event.

Accepted Answer

contingent

Question 16

Payments of FUTA are made quarterly to a federal depository bank if the total amount due exceeds $1,000.

Accepted Answer

A) True 
 B)False

Question 17

Accounts payable:

Accepted Answer

A) Are amounts owed to suppliers for products and/or services purchased on credit. 
B) Are long-term liabilities. 
C) Are estimated liabilities. 
D) Do not include specific due dates. 
E) Must be paid within 30 days. 
A) Are amounts owed to suppliers for products and/or services purchased on credit. 
B) Are long-term liabilities. 
C) Are estimated liabilities. 
D) Do not include specific due dates. 
E) Must be paid within 30 days.

Question 18

Experience shows that when times interest earned falls below 1.5 to 2.0 and remains at that level or lower for several time periods,the default rate on liabilities increases sharply.

Accepted Answer

A) True 
 B)False

Question 19

On December 1,Martin Company signed a $5,000,3-month,6% note payable,with the principle plus interest due on March 1 of the following year.What amount of interest expense is accrued at December 31 on the note?

Accepted Answer

A) $0 
B) $25 
C) $50 
D) $75 
E) $300 
A) $0 
B) $25 
C) $50 
D) $75 
E) $300

Question 20

A single liability can be divided between current and noncurrent liabilities.

Accepted Answer

A) True 
 B)False

Unearned revenues are amounts received ___from for future products or services.

An estimated liability is a known obligation of an uncertain amount that can at least be reasonably estimated.

When the times interest earned ratio declines,the likelihood of default on liabilities increases.

A company's income before interest expense and taxes is $250,000 and its interest expense is $100,000.Its times interest earned ratio is equal to .4.

An employee earnings report:

The matching principle requires that interest expense not be accrued on a note payable until the note is paid,even if the end of an accounting period occurs between the signing of a note payable and its maturity date.

Tree Frog Company is organized as a LLC and does not pay income taxes.The company has fixed interest expense of $5,750,sales of $253,000,and variable expenses of $189,750.What is the company's times interest earned ratio?

Debt guarantees are not disclosed because the guarantor is not the primary debtor.

Times interest earned ratio is computed by dividing _______________ by interest expense.

Apple Company has three employees: What is the amount that Apple Company will record as total payroll taxes for August?

FUTA taxes are:

In the accounting records of a defendant,lawsuits:

A ________________________ is a potential obligation arising from a past transaction or event that depends on a future event.

Payments of FUTA are made quarterly to a federal depository bank if the total amount due exceeds $1,000.

Accounts payable:

Experience shows that when times interest earned falls below 1.5 to 2.0 and remains at that level or lower for several time periods,the default rate on liabilities increases sharply.

On December 1,Martin Company signed a $5,000,3-month,6% note payable,with the principle plus interest due on March 1 of the following year.What amount of interest expense is accrued at December 31 on the note?

A single liability can be divided between current and noncurrent liabilities.

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters

Exam 9: Reporting and Analyzing Current Liabilities

Unearned revenues are amounts received _________from______ for future products or services.

An estimated liability is a known obligation of an uncertain amount that can at least be reasonably estimated.

When the times interest earned ratio declines,the likelihood of default on liabilities increases.

A company's income before interest expense and taxes is $250,000 and its interest expense is $100,000.Its times interest earned ratio is equal to .4.

An employee earnings report:

The matching principle requires that interest expense not be accrued on a note payable until the note is paid,even if the end of an accounting period occurs between the signing of a note payable and its maturity date.

Tree Frog Company is organized as a LLC and does not pay income taxes.The company has fixed interest expense of $5,750,sales of $253,000,and variable expenses of $189,750.What is the company's times interest earned ratio?

Debt guarantees are not disclosed because the guarantor is not the primary debtor.

Times interest earned ratio is computed by dividing _______________ by interest expense.

Apple Company has three employees: What is the amount that Apple Company will record as total payroll taxes for August?

FUTA taxes are:

In the accounting records of a defendant,lawsuits:

A ________________________ is a potential obligation arising from a past transaction or event that depends on a future event.

Payments of FUTA are made quarterly to a federal depository bank if the total amount due exceeds $1,000.

Accounts payable:

Experience shows that when times interest earned falls below 1.5 to 2.0 and remains at that level or lower for several time periods,the default rate on liabilities increases sharply.

On December 1,Martin Company signed a $5,000,3-month,6% note payable,with the principle plus interest due on March 1 of the following year.What amount of interest expense is accrued at December 31 on the note?

A single liability can be divided between current and noncurrent liabilities.

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters

Unearned revenues are amounts received ___from for future products or services.