Question 1

The times interest earned ratio reflects:

Accepted Answer

A) A company's ability to pay its operating expenses on time. 
B) A company's ability to pay interest expense. 
C) A company's profitability. 
D) The relation between income and assets. 
E) The relation between assets and liabilities. 
A) A company's ability to pay its operating expenses on time. 
B) A company's ability to pay interest expense. 
C) A company's profitability. 
D) The relation between income and assets. 
E) The relation between assets and liabilities. B

Question 2

Unearned revenues are amounts received in advance from customers for future products or services.

Accepted Answer

A) True 
 B)False  True

Question 3

A liability is incurred when income is earned because income tax expense is created by earning income.

Accepted Answer

A) True 
 B)False  True

Question 4

A company estimates that warranty expense will be 4% of sales.The company's sales for the current period are $185,000.The current period's entry to record the warranty expense is:

Accepted Answer

A) Debit Warranty Expense $7,400; credit Sales $7,400. 
B) Debit Warranty Expense $7,400; credit Estimated Warranty Liability $7,400. 
C) Debit Estimated Warranty Liability $7,400; credit Warranty Expense $7,400. 
D) Debit Estimated Warranty Liability $7,400; credit Cash $7,400. 
E) No entry is recorded until the items are returned for warranty repairs. 
A) Debit Warranty Expense $7,400; credit Sales $7,400. 
B) Debit Warranty Expense $7,400; credit Estimated Warranty Liability $7,400. 
C) Debit Estimated Warranty Liability $7,400; credit Warranty Expense $7,400. 
D) Debit Estimated Warranty Liability $7,400; credit Cash $7,400. 
E) No entry is recorded until the items are returned for warranty repairs.

Question 5

A high merit rating for state unemployment taxes means that an employer has high employee turnover or seasonal hiring.

Accepted Answer

A) True 
 B)False

Question 6

To compute the amount of tax withheld from an employee's pay,employers can use a ________ table.

Accepted Answer

wage brack

Question 7

A liability cannot be divided between current and noncurrent liabilities.

Accepted Answer

A) True 
 B)False

Question 8

Obligations due within one year or the company's operating cycle,whichever is longer,are ________.

Accepted Answer

The answer of Obligations due within one year or the...

Question 9

What is a short-term note payable? Explain the accounting issues related to notes payable.

Accepted Answer

A short-term note payable is a written p

Question 10

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 11

Accrued vacation benefits are a form of estimated liability for an employer.

Accepted Answer

A) True 
 B)False

Question 12

Identify and explain the types of employer payroll taxes.

Accepted Answer

Employers are required to contribute an

Question 13

Each employee records the number of withholding allowances claimed on the withholding allowance certificate that is filed with the employer,which is the Form W-4.

Accepted Answer

A) True 
 B)False

Question 14

A table that shows the amount of federal income tax to be withheld from an employee's pay is the:

Accepted Answer

A) Form 941. 
B) Tax table. 
C) Wage bracket withholding table. 
D) W-2. 
E) W-4. 
A) Form 941. 
B) Tax table. 
C) Wage bracket withholding table. 
D) W-2. 
E) W-4.

Question 15

Triston Vale is paid on a monthly basis.For the month of January of the current year,he earned a total of $5,210.FICA tax for Social Security is 6.2% on the first $128,400 of earnings each calendar year and the FICA tax for Medicare is 1.45% of all earnings.The FUTA tax rate is 0.6% and the SUTA tax rate is 5.4%.Both unemployment taxes are applied to the first $7,000 of an employee's pay.The amount of Federal Income Tax withheld from his earnings was $885.70.What is the amount of the employer's payroll taxes expenses for this employee?

Accepted Answer

A) $1,284.27 
B) $312.60 
C) $398.57 
D) $711.17 
E) $1,596.87 
A) $1,284.27 
B) $312.60 
C) $398.57 
D) $711.17 
E) $1,596.87

Question 16

A company sells sofas with a 6-month warranty.In January,the company sold 100,000 sofas at $1,750 each; and 500 sofas needed repairs during that same month.The total repairs amounted to $85,000 costs from the upholstery materials inventory.It is estimated that 2% of all units sold will need repairs under warranty at an estimated cost of $200 per unit.Prepare the journal entries to record (a)estimated warranty expense for January and (b)warranty repair costs for January.

Accepted Answer

The answer of A company sells sofas with a 6-month...

Question 17

Estimated liabilities commonly arise from all of the following except:

Accepted Answer

A) Warranties. 
B) Vacation benefits. 
C) Pension benefits. 
D) Employee benefits. 
E) Unearned revenues. 
A) Warranties. 
B) Vacation benefits. 
C) Pension benefits. 
D) Employee benefits. 
E) Unearned revenues.

Question 18

FUTA requires employers to pay a federal unemployment tax on the first $1 million in salary or wages paid to each employee.

Accepted Answer

A) True 
 B)False

Question 19

Kelso had income before interest expense and income taxes of $570 million and interest expense of $37 million.Calculate Kelso' times interest earned.

Accepted Answer

15.4
Times Interest Earned Rat

Question 20

During the first week of January,an employee works 46 hours.For this company,workers earn 150% of their regular rate for hours in excess of 40 per week.Her pay rate is $16 per hour,and her wages are subject to no deductions other than FICA Social Security,FICA Medicare,and federal income taxes.The tax rate for Social Security is 6.2% of the first $128,400 earned each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings.The current FUTA tax rate is 0.6%,and the SUTA tax rate is 5.4%.Both unemployment taxes are applied to the first $7,000 of an employee's pay.The employee has $80 in federal income taxes withheld.What is the amount of this employee's gross pay for the first week of January?

Accepted Answer

A) $736 
B) $784 
C) $1,104 
D) $1,156 
E) $1,004 
A) $736 
B) $784 
C) $1,104 
D) $1,156 
E) $1,004

Exam 9: Accounting for Current Liabilities

The times interest earned ratio reflects:

Unearned revenues are amounts received in advance from customers for future products or services.

A liability is incurred when income is earned because income tax expense is created by earning income.

A company estimates that warranty expense will be 4% of sales.The company's sales for the current period are $185,000.The current period's entry to record the warranty expense is:

A high merit rating for state unemployment taxes means that an employer has high employee turnover or seasonal hiring.

To compute the amount of tax withheld from an employee's pay,employers can use a ________ table.

A liability cannot be divided between current and noncurrent liabilities.

Obligations due within one year or the company's operating cycle,whichever is longer,are ________.

What is a short-term note payable? Explain the accounting issues related to notes payable.

FUTA taxes are:

Accrued vacation benefits are a form of estimated liability for an employer.

Identify and explain the types of employer payroll taxes.

Each employee records the number of withholding allowances claimed on the withholding allowance certificate that is filed with the employer,which is the Form W-4.

A table that shows the amount of federal income tax to be withheld from an employee's pay is the:

Estimated liabilities commonly arise from all of the following except:

FUTA requires employers to pay a federal unemployment tax on the first $1 million in salary or wages paid to each employee.

Kelso had income before interest expense and income taxes of $570 million and interest expense of $37 million.Calculate Kelso' times interest earned.

Accounting in Business

Accounting for Business Transactions

Adjusting Accounts for Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash,fraud,and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Time Value of Money

Investments

Lean Principles and Accounting

Filters