Question 1

FICA taxes include:

Accepted Answer

A) Social Security and Medicare taxes. 
B) Charitable giving. 
C) Employee state income tax. 
D) Federal and state unemployment taxes. 
E) Farming income crop adjustment taxes. 
A) Social Security and Medicare taxes. 
B) Charitable giving. 
C) Employee state income tax. 
D) Federal and state unemployment taxes. 
E) Farming income crop adjustment taxes.

Question 2

Contingent liabilities are recorded or disclosed unless they are:

Accepted Answer

A) Probable and estimable. 
B) Remote (very unlikely). 
C) Reasonably possible. 
D) Probable and not estimable. 
E) Possible and estimable. 
A) Probable and estimable. 
B) Remote (very unlikely). 
C) Reasonably possible. 
D) Probable and not estimable. 
E) Possible and estimable.

Question 3

Carson Company sells sporting tickets in advance of the event for $500,000.The journal entry to record the sale is:

Accepted Answer

A) Debit Prepaid Sales $500,000; credit Sales Revenue $500,000. 
B) Debit Cash $500,000; credit Accounts Payable $500,000. 
C) Debit Cash $500,000,credit Unearned Ticket Revenue $500,000. 
D) Debit Cost of Sales $500,000,credit Inventory $500,000. 
E) No journal entry is required. 
A) Debit Prepaid Sales $500,000; credit Sales Revenue $500,000. 
B) Debit Cash $500,000; credit Accounts Payable $500,000. 
C) Debit Cash $500,000,credit Unearned Ticket Revenue $500,000. 
D) Debit Cost of Sales $500,000,credit Inventory $500,000. 
E) No journal entry is required.

Question 4

SaveMart had income before interest expense and income taxes of $12,581 million and interest expense of $1,063 million.Valueland had income before interest expense and income taxes of $3,596 million and interest expense of $1,143 million.Calculate the times interest earned for each company and comment on the results.

Accepted Answer

SaveMart times interest earned = 11.8; V

Question 5

A company has 90 employees and a weekly payroll of $117,000.The FICA-social security tax withheld totals $7,254 and the FICA-Medicare tax withheld totals $1,696.50.The total withholding for federal income tax is $16,500.Prepare the journal entry to accrue this week's salaries expense and withholdings.

Accepted Answer

The answer of A company has 90 employees and a...

Question 6

A contingent liability is:

Accepted Answer

A) Always of a specific amount. 
B) A potential obligation that depends on a future event arising from a past transaction or event. 
C) An obligation not requiring future payment. 
D) An obligation arising from the purchase of goods or services on credit. 
E) An obligation arising from a future event. 
A) Always of a specific amount. 
B) A potential obligation that depends on a future event arising from a past transaction or event. 
C) An obligation not requiring future payment. 
D) An obligation arising from the purchase of goods or services on credit. 
E) An obligation arising from a future event.

Question 7

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

Accepted Answer

The answer of ________ are amounts received in advance from...

Question 8

Banks authorized to accept deposits of amounts payable to the federal government,including amounts due for payroll taxes are ________.

Accepted Answer

federal de

Question 9

A company has interest expense of $52,000,income taxes expense of $121,000,and net income of $281,000.The company's times interest earned ratio equals:

Accepted Answer

A) 8.73. 
B) 5.40. 
C) 7.73. 
D) 2.33. 
E) 0.11. 
A) 8.73. 
B) 5.40. 
C) 7.73. 
D) 2.33. 
E) 0.11.

Question 10

Explain how to calculate times interest earned and how it is used to analyze a company's risk.

Accepted Answer

The times interest earned ratio is calcu

Question 11

An employee earns $5,500 per month working for an employer.The FICA tax rate for Social Security is 6.2% of the first $128,400 of earnings 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 $182 in federal income taxes withheld.The employee has voluntary deductions for health insurance of $150 and contributes $75 to a retirement plan each month.What is the amount the employer should record as payroll taxes expense for the employee for the month of January?

Accepted Answer

A) $420.75 
B) $464.75 
C) $602.75 
D) $841.50 
E) $750.75 
A) $420.75 
B) $464.75 
C) $602.75 
D) $841.50 
E) $750.75

Question 12

Amounts received in advance from customers for future products or services:

Accepted Answer

A) Are revenues. 
B) Increase income. 
C) Are liabilities. 
D) Are not allowed under GAAP. 
E) Require an outlay of cash in the future. 
A) Are revenues. 
B) Increase income. 
C) Are liabilities. 
D) Are not allowed under GAAP. 
E) Require an outlay of cash in the future.

Question 13

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

Accepted Answer

contingent

Question 14

All expected future payments are liabilities.

Accepted Answer

A) True 
 B)False

Question 15

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 0.6% 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

The answer of The payroll records of a company provided...

Question 16

All of the following statements regarding uncertainty in liabilities are true except:

Accepted Answer

A) Liabilities can involve uncertainty in whom to pay. 
B) A company can create a liability with a known amount even when the holder of the note may not be known until the maturity date. 
C) A company can have an obligation of a known amount to a known creditor but not know when it must be paid. 
D) A company only records liabilities when it knows whom to pay,when to pay,and how much to pay.Without all three,a liability cannot be recorded. 
E) A company can be aware of an obligation but not know how much will be required to settle it. 
A) Liabilities can involve uncertainty in whom to pay. 
B) A company can create a liability with a known amount even when the holder of the note may not be known until the maturity date. 
C) A company can have an obligation of a known amount to a known creditor but not know when it must be paid. 
D) A company only records liabilities when it knows whom to pay,when to pay,and how much to pay.Without all three,a liability cannot be recorded. 
E) A company can be aware of an obligation but not know how much will be required to settle it.

Question 17

An employee earned $100,000 working for an employer in the current year.The current rate for FICA Social Security is 6.2% payable on earnings up to $128,400 maximum per year and the rate for FICA Medicare 1.45% of all earnings.The employer's total FICA payroll tax for this employee is:

Accepted Answer

A) $7,650. 
B) $9,830. 
C) $879. 
D) $8,950. 
E) $0,since the FICA tax is only deducted from an employee's pay. 
A) $7,650. 
B) $9,830. 
C) $879. 
D) $8,950. 
E) $0,since the FICA tax is only deducted from an employee's pay.

Question 18

Define liabilities and explain the difference between current and long-term liabilities.

Accepted Answer

Liabilities are probable future payments

Question 19

Trey Morgan is an employee who is paid monthly.For the month of January of the current year,he earned a total of $4,538.The FICA tax 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 for both the employee and the employer.The amount of federal income tax withheld from his earnings was $680.70.His net pay for the month is:

Accepted Answer

A) $3,510.14 
B) $3,857.30 
C) $4,190.84 
D) $4,538.00 
E) $3,162.98 
A) $3,510.14 
B) $3,857.30 
C) $4,190.84 
D) $4,538.00 
E) $3,162.98

Exam 9: Accounting for Current Liabilities

FICA taxes include:

Contingent liabilities are recorded or disclosed unless they are:

Carson Company sells sporting tickets in advance of the event for $500,000.The journal entry to record the sale is:

A contingent liability is:

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

Banks authorized to accept deposits of amounts payable to the federal government,including amounts due for payroll taxes are ________.

A company has interest expense of $52,000,income taxes expense of $121,000,and net income of $281,000.The company's times interest earned ratio equals:

Explain how to calculate times interest earned and how it is used to analyze a company's risk.

Amounts received in advance from customers for future products or services:

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

All expected future payments are liabilities.

All of the following statements regarding uncertainty in liabilities are true except:

An employee earned $100,000 working for an employer in the current year.The current rate for FICA Social Security is 6.2% payable on earnings up to $128,400 maximum per year and the rate for FICA Medicare 1.45% of all earnings.The employer's total FICA payroll tax for this employee is:

Define liabilities and explain the difference between current and long-term liabilities.

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

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