Question 1

Obligations not expected to be paid within the longer of one year or the company's operating cycle are reported as:

Accepted Answer

A) Current assets. 
B) Current liabilities. 
C) Long-term liabilities. 
D) Operating cycle liabilities. 
E) Bills. 
A) Current assets. 
B) Current liabilities. 
C) Long-term liabilities. 
D) Operating cycle liabilities. 
E) Bills.

Question 2

Debt guarantees are:

Accepted Answer

A) Never disclosed in the financial statements. 
B) Considered to be contingent liabilities. 
C) A bad business practice. 
D) Recorded as liabilities even though it is highly unlikely that the original debtor will default. 
E) Considered to be an unearned revenue. 
A) Never disclosed in the financial statements. 
B) Considered to be contingent liabilities. 
C) A bad business practice. 
D) Recorded as liabilities even though it is highly unlikely that the original debtor will default. 
E) Considered to be an unearned revenue.

Question 3

The payroll records of a company provided the following data for the current weekly pay period ended March 12.
 
 Assume that the Social Security portion of the FICA taxes is 6.2% on the first $128,400 and the Medicare portion is 1.45% of all wages paid to each employee for this pay period.The federal and state unemployment tax rates are 0.6% and 5.4%,respectively,on the first $7,000 paid to each employee.Calculate the net pay for each employee.

Accepted Answer

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

Question 4

Contingent liabilities that are reasonably possible are disclosed in the notes.

Accepted Answer

A) True 
 B)False

Question 5

The deferred income tax liability:

Accepted Answer

A) Results from the income tax expense reported on the income statement differing from the amount of income taxes payable to the government. 
B) Is a contingent liability. 
C) Can result in a deferred income tax asset. 
D) Is never recorded. 
E) Is recorded whether or not the difference between taxable income and financial accounting income is permanent or temporary. 
A) Results from the income tax expense reported on the income statement differing from the amount of income taxes payable to the government. 
B) Is a contingent liability. 
C) Can result in a deferred income tax asset. 
D) Is never recorded. 
E) Is recorded whether or not the difference between taxable income and financial accounting income is permanent or temporary.

Question 6

Recording employee payroll deductions may involve:

Accepted Answer

A) Liabilities to the employer. 
B) Liabilities to federal and state governments. 
C) Expenses for state unemployment. 
D) Expenses for the gross wages and salaries. 
E) Expenses for the employer portion of any medical insurance. 
A) Liabilities to the employer. 
B) Liabilities to federal and state governments. 
C) Expenses for state unemployment. 
D) Expenses for the gross wages and salaries. 
E) Expenses for the employer portion of any medical insurance.

Question 7

On December 1,Victoria Company signed a 90-day,6% note payable,with a face value of $15,000.What amount of interest expense is accrued at December 31 on the note? (Use 360 days a year.)

Accepted Answer

A) $0 
B) $75 
C) $900 
D) $225 
E) $300 
A) $0 
B) $75 
C) $900 
D) $225 
E) $300

Question 8

On December 1,Williams Company borrowed $45,000 cash from Second National Bank by signing a 90-day,9% note payable.
a.Prepare Williams' journal entry to record the issuance of the note payable.
b.Prepare Williams' journal entry to record the accrued interest due at December 31.
c.Prepare Williams' journal entry to record the payment of the note on March 1 of the next year.

Accepted Answer

The answer of On December 1,Williams Company borrowed $45,000 cash...

Question 9

________ are probable future payments of assets or services that a company is presently obligated to make as a result of past transactions or events.

Accepted Answer

The answer of ________ are probable future payments of assets...

Question 10

A liability may exist even if there is uncertainty about whom to pay,when to pay,or how much to pay.

Accepted Answer

A) True 
 B)False

Question 11

Employee vacation benefits:

Accepted Answer

A) Are estimated liabilities. 
B) Are contingent liabilities. 
C) Are recorded as an expense when the employee takes a vacation. 
D) Are recorded as an expense when the employee retires. 
E) Increase net income. 
A) Are estimated liabilities. 
B) Are contingent liabilities. 
C) Are recorded as an expense when the employee takes a vacation. 
D) Are recorded as an expense when the employee retires. 
E) Increase net income.

Question 12

A company has a selling price of $1,800 each for its printers.Each printer has a 2 year warranty that covers replacement of defective parts.It is estimated that 2% of all printers sold will be returned under the warranty at an average cost of $150 each.During November,the company sold 30,000 printers,and 400 printers were serviced under the warranty.What is the company's warranty expense for the month of November?

Accepted Answer

A) $26,000 
B) $45,000 
C) $55,000 
D) $60,000 
E) $90,000 
A) $26,000 
B) $45,000 
C) $55,000 
D) $60,000 
E) $90,000

Question 13

A company has three employees.Total salaries for the month of January were $8,000.The federal income tax rate for all employees is 15%.The FICA-social security tax rate is 6.2% and the FICA-Medicare tax rate is 1.45%.Calculate the amount of employee taxes withheld and prepare the company's journal entry to record the January payroll assuming these were the only deductions.

Accepted Answer

The answer of A company has three employees.Total salaries for...

Question 14

The amount of FICA tax that employers must pay is exactly twice the amount of the FICA taxes withheld from their employees.

Accepted Answer

A) True 
 B)False

Question 15

Uncertainties such as natural disasters are:

Accepted Answer

A) Not contingent liabilities because they are future events not arising from past transactions or events. 
B) Contingent liabilities because they are future events arising from past transactions or events. 
C) Disclosed because of their usefulness to financial statements. 
D) Estimated liabilities because the amounts are uncertain. 
E) Reported in the same way as debt guarantees. 
A) Not contingent liabilities because they are future events not arising from past transactions or events. 
B) Contingent liabilities because they are future events arising from past transactions or events. 
C) Disclosed because of their usefulness to financial statements. 
D) Estimated liabilities because the amounts are uncertain. 
E) Reported in the same way as debt guarantees.

Question 16

Obligations to be paid within one year or the company's operating cycle,whichever is longer,are:

Accepted Answer

A) Current assets. 
B) Current liabilities. 
C) Earned revenues. 
D) Operating cycle liabilities. 
E) Bills. 
A) Current assets. 
B) Current liabilities. 
C) Earned revenues. 
D) Operating cycle liabilities. 
E) Bills.

Question 17

Match between columns
                        Premises: A record for a pay period that shows the pay period dates, regular and overtime hours worked, gross pay, net pay and deductions.
Liabilities due within one year or the company's operating cycle, whichever is longer.
A calculation of a company's ability to pay interest when due.
A special bank account used solely for paying employees; each pay period an amount equal to the total employees' net pay is deposited and the employees' payroll checks are drawn on that account.
A bank authorized to accept deposits of amounts payable to the federal government, including payroll taxes.
Employee withholdings and equal employer taxes, paid to cover medical benefits.
Compensation provided to employees beyond salaries and wages, such as premiums for medical insurance and contributions to pension plans.
Total compensation earned by an employee.
A seller's obligation to replace or fix a product or service that fails to perform as expected within a specified period.
A written promise to pay a specified amount on a stated future date within one year or the company's operating cycle, whichever is longer.

Accepted Answer

The Answer of Federal depository bank and Payroll register and is...

Question 18

The chief executive officer earns $10,000 per month.As of May 31,her gross pay was $50,000.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.What is the amount of FICA-Social Security withheld from this employee for the month of June?

Accepted Answer

A) $7,347 
B) $620 
C) $1,240 
D) $268 
E) $290 
A) $7,347 
B) $620 
C) $1,240 
D) $268 
E) $290

Question 19

In order to be reported,liabilities must:

Accepted Answer

A) Be certain. 
B) Sometimes be estimated. 
C) Be for a specific amount. 
D) Always have a definite date for payment. 
E) Involve an outflow of cash. 
A) Be certain. 
B) Sometimes be estimated. 
C) Be for a specific amount. 
D) Always have a definite date for payment. 
E) Involve an outflow of cash.

Question 20

Describe employer responsibilities for reporting payroll taxes.(To the extent possible,reference the form to be filed for each tax.)

Accepted Answer

Employers are required to report FICA ta

Exam 9: Accounting for Current Liabilities

Obligations not expected to be paid within the longer of one year or the company's operating cycle are reported as:

Debt guarantees are:

Contingent liabilities that are reasonably possible are disclosed in the notes.

The deferred income tax liability:

Recording employee payroll deductions may involve:

On December 1,Victoria Company signed a 90-day,6% note payable,with a face value of $15,000.What amount of interest expense is accrued at December 31 on the note? (Use 360 days a year.)

________ are probable future payments of assets or services that a company is presently obligated to make as a result of past transactions or events.

A liability may exist even if there is uncertainty about whom to pay,when to pay,or how much to pay.

Employee vacation benefits:

The amount of FICA tax that employers must pay is exactly twice the amount of the FICA taxes withheld from their employees.

Uncertainties such as natural disasters are:

Obligations to be paid within one year or the company's operating cycle,whichever is longer,are:

In order to be reported,liabilities must:

Describe employer responsibilities for reporting payroll taxes.(To the extent possible,reference the form to be filed for each tax.)

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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