Question 1

Liabilities not due within one year or the company's operating cycle,whichever is longer,are reported as current liabilities.

Accepted Answer

A) True 
 B)False

Question 2

Furniture World is required by law to collect and remit sales taxes to the state.If Furniture World has $78,000 of cash sales that are subject to a 6% sales tax,what is the journal entry to record the cash sales?

Accepted Answer

A) Debit Cash $82,680; credit Sales $78,000; credit Sales Taxes Payable $4,680. 
B) Debit Sales Taxes Payable $4,680; debit Cash $73,220; credit Sales $78,000. 
C) Debit Cash $78,000; credit Sales $78,000; and record the taxes when paid. 
D) Debit Cash $78,000; credit Sales $73,320; credit Sales Taxes Payable $4,680. 
E) Debit Accounts Receivable $82,680; credit Sales $78,000; credit Sales Taxes Payable $4,680. 
A) Debit Cash $82,680; credit Sales $78,000; credit Sales Taxes Payable $4,680. 
B) Debit Sales Taxes Payable $4,680; debit Cash $73,220; credit Sales $78,000. 
C) Debit Cash $78,000; credit Sales $78,000; and record the taxes when paid. 
D) Debit Cash $78,000; credit Sales $73,320; credit Sales Taxes Payable $4,680. 
E) Debit Accounts Receivable $82,680; credit Sales $78,000; credit Sales Taxes Payable $4,680.

Question 3

The report that shows the pay period dates,hours worked,gross pay,deductions,and net pay of each employee for every pay period is the payroll register.

Accepted Answer

A) True 
 B)False

Question 4

A liability is a probable future payment of assets or services that a company is presently obligated to make as a result of past transactions or events.

Accepted Answer

A) True 
 B)False

Question 5

A short-term note payable:

Accepted Answer

A) Is 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. 
B) Is a contingent liability. 
C) Is an estimated liability. 
D) Is not a liability until the due date. 
E) Cannot be used to extend the payment period for an account payable. 
A) Is 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. 
B) Is a contingent liability. 
C) Is an estimated liability. 
D) Is not a liability until the due date. 
E) Cannot be used to extend the payment period for an account payable.

Question 6

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 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 $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 of net pay for the employee for the month of January? (Round your intermediate calculations to two decimal places.)

Accepted Answer

A) $4,827.00 
B) $4,672.25 
C) $4,628.25 
D) $4,386.25 
E) $4,430.25 
A) $4,827.00 
B) $4,672.25 
C) $4,628.25 
D) $4,386.25 
E) $4,430.25

Question 7

On May 22,Jarrett Company borrows $7,500 from Fairmont Financing,signing a 90-day,8%,$7,500 note.What is the journal entry needed to record the transaction by Jarrett Company?

Accepted Answer

A) Debit Cash $7,500; credit Accounts Payable $7,500. 
B) Debit Accounts Payable $7,500; credit Notes Payable $7,500. 
C) Debit Cash $7,650; credit Notes Payable $7,650. 
D) Debit Cash $7,500; credit Notes Payable $7,500. 
E) Debit Notes Receivable $7,500; credit Cash $7,500. 
A) Debit Cash $7,500; credit Accounts Payable $7,500. 
B) Debit Accounts Payable $7,500; credit Notes Payable $7,500. 
C) Debit Cash $7,650; credit Notes Payable $7,650. 
D) Debit Cash $7,500; credit Notes Payable $7,500. 
E) Debit Notes Receivable $7,500; credit Cash $7,500.

Question 8

A high value for the times interest earned ratio means that a company is a lower risk borrower.

Accepted Answer

A) True 
 B)False

Question 9

If the end of an accounting period occurs between the signing of a note payable and its maturity date,interest expense should not be accrued until the note is paid.

Accepted Answer

A) True 
 B)False

Question 10

Portia Grant is an employee who is paid monthly.For the month of January of the current year,she earned a total of $8,260.The FICA tax for social security is 6.2% of the first $128,400 of employee earnings each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings.The FUTA tax rate of .6% and the SUTA tax rate of 5.4% are applied to the first $7,000 of an employee's pay.The amount of federal income tax withheld from her earnings was $1,325.17.Her net pay for the month is: (Round your intermediate calculations to two decimal places.)

Accepted Answer

A) $6,422.71 
B) $6,246.94 
C) $6,302.94 
D) $5,868.94 
E) $7,194.11 
A) $6,422.71 
B) $6,246.94 
C) $6,302.94 
D) $5,868.94 
E) $7,194.11

Question 11

Hollow Company provides you with following information for two of its employees.The company is subject to the following taxes.
   Compute amounts for each of these four taxes as applied to each employee's gross earnings for November.

Accepted Answer

The answer of Hollow Company provides you with following information...

Question 12

A note payable cannot be sold or transferred under any circumstance.

Accepted Answer

A) True 
 B)False

Question 13

An employee earnings report is a cumulative record of each employee's hours worked,gross earnings,deductions,and net pay.

Accepted Answer

A) True 
 B)False

Question 14

In the accounting records of a defendant,lawsuits:

Accepted Answer

A) Are known 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 known 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

The Form W-2 must be given to employees before January 31 following the year covered by the Form W-2.

Accepted Answer

A) True 
 B)False

Question 16

On November 1,Alan Company signed a 120-day,8% note payable,with a face value of $9,000.What is the adjusting entry for the accrued interest at December 31 on the note? (Use 360 days a year.)

Accepted Answer

A) No adjusting entry is required. 
B) Debit Interest Payable,$120; credit Interest Expense,$120. 
C) Debit Interest Expense,$120; credit Interest Payable,$120. 
D) Debit Interest Expense,$720; credit Interest Payable,$720. 
E) Debit Interest Payable,$240; credit Interest Expense,$240. 
A) No adjusting entry is required. 
B) Debit Interest Payable,$120; credit Interest Expense,$120. 
C) Debit Interest Expense,$120; credit Interest Payable,$120. 
D) Debit Interest Expense,$720; credit Interest Payable,$720. 
E) Debit Interest Payable,$240; credit Interest Expense,$240.

Question 17

A company had income before interest expense and income taxes of $186,000,and its interest expense is $55,000.Calculate the company's times interest earned ratio.

Accepted Answer

3.38
Times Interest Earned Rat

Question 18

The chief executive officer earns $20,000 per month.As of May 31,her gross pay was $100,000.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 - Medicare withheld from this employee for the month of June?

Accepted Answer

A) $7,347.00 
B) $620.00 
C) $1,240.00 
D) $268.25 
E) $290.00 
A) $7,347.00 
B) $620.00 
C) $1,240.00 
D) $268.25 
E) $290.00

Question 19

An employer's federal unemployment taxes (FUTA)are reported:

Accepted Answer

A) Annually. 
B) Semiannually. 
C) Quarterly. 
D) Monthly. 
E) Weekly. 
A) Annually. 
B) Semiannually. 
C) Quarterly. 
D) Monthly. 
E) Weekly.

Question 20

A company's payroll for the week ended May 15 included earned salaries of $20,000.All of that week's pay is subject to FICA social security taxes of 6.2% and Medicare taxes of 1.45%.In addition,the company withholds the following amounts for this weekly pay period: $900 for medical insurance,$3,400 for federal income taxes,and $180 for union dues.
a.Prepare the general journal entry to accrue the payroll.
b.The company is subject to state unemployment taxes at the rate of 5.4% and federal unemployment taxes at the rate of 0.6%.By May 15,some employees had earned over $7,000,so only $11,000 of the $20,000 weekly gross pay was subject to unemployment tax.Prepare the general journal entry to accrue the employer's payroll tax expense.

Accepted Answer

The answer of A company's payroll for the week ended...

Exam 9: Accounting for Current Liabilities

Liabilities not due within one year or the company's operating cycle,whichever is longer,are reported as current liabilities.

Furniture World is required by law to collect and remit sales taxes to the state.If Furniture World has $78,000 of cash sales that are subject to a 6% sales tax,what is the journal entry to record the cash sales?

The report that shows the pay period dates,hours worked,gross pay,deductions,and net pay of each employee for every pay period is the payroll register.

A liability is a probable future payment of assets or services that a company is presently obligated to make as a result of past transactions or events.

A short-term note payable:

On May 22,Jarrett Company borrows $7,500 from Fairmont Financing,signing a 90-day,8%,$7,500 note.What is the journal entry needed to record the transaction by Jarrett Company?

A high value for the times interest earned ratio means that a company is a lower risk borrower.

If the end of an accounting period occurs between the signing of a note payable and its maturity date,interest expense should not be accrued until the note is paid.

Hollow Company provides you with following information for two of its employees.The company is subject to the following taxes. Compute amounts for each of these four taxes as applied to each employee's gross earnings for November.

A note payable cannot be sold or transferred under any circumstance.

An employee earnings report is a cumulative record of each employee's hours worked,gross earnings,deductions,and net pay.

In the accounting records of a defendant,lawsuits:

The Form W-2 must be given to employees before January 31 following the year covered by the Form W-2.

On November 1,Alan Company signed a 120-day,8% note payable,with a face value of $9,000.What is the adjusting entry for the accrued interest at December 31 on the note? (Use 360 days a year.)

A company had income before interest expense and income taxes of $186,000,and its interest expense is $55,000.Calculate the company's times interest earned ratio.

An employer's federal unemployment taxes (FUTA)are reported:

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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