Question 1

Match each of the following terms with the appropriate definitions.
-A potential obligation that depends on a future event arising from a past transaction.

Accepted Answer

A) Long-term liability 
B) Warranty 
C) FUTA taxes 
D) FICA taxes 
E) Contingent liability
F)Net pay
G)Withholding allowance
H)Estimated liability
I)Merit rating
J)Wage bracket withholding table 
A) Long-term liability 
B) Warranty 
C) FUTA taxes 
D) FICA taxes 
E) Contingent liability
F)Net pay
G)Withholding allowance
H)Estimated liability
I)Merit rating
J)Wage bracket withholding table

Question 2

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 3

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

Question 4

A short-term note payable is a written promise to pay a specified amount on a definite future date within one year or the operating cycle,whichever is shorter.

Accepted Answer

A) True 
 B)False

Question 5

Match the following items with the appropriate designation (Current liability, Long-term liability, or Not a liability).
-60-day promissory note

Accepted Answer

A) Long-term liability 
B) Not a liability 
C) Current liability 
A) Long-term liability 
B) Not a liability 
C) Current liability

Question 6

A company's income before interest expense and income taxes is $302,400,and its interest expense is $62,000.Calculate the company's times interest earned ratio.

Accepted Answer

Times Interest Earned Ratio =

Question 7

Match each of the following terms with the appropriate definitions.
-Payroll taxes on employers assessed by the federal government to support the federal unemployment insurance program.

Accepted Answer

A) Long-term liability 
B) Warranty 
C) FUTA taxes 
D) FICA taxes 
E) Contingent liability
F)Net pay
G)Withholding allowance
H)Estimated liability
I)Merit rating
J)Wage bracket withholding table 
A) Long-term liability 
B) Warranty 
C) FUTA taxes 
D) FICA taxes 
E) Contingent liability
F)Net pay
G)Withholding allowance
H)Estimated liability
I)Merit rating
J)Wage bracket withholding table

Question 8

All of the following are true of known liabilities except:

Accepted Answer

A)  Include accounts payable, notes payable, and payroll. 
B)  Are obligations set by agreements, contracts, or laws. 
C)  Are measurable. 
D)  Are definitely determinable. 
E)  May depend on some future event occurring. 
A)  Include accounts payable, notes payable, and payroll. 
B)  Are obligations set by agreements, contracts, or laws. 
C)  Are measurable. 
D)  Are definitely determinable. 
E)  May depend on some future event occurring.

Question 9

All of the following statements related to current liabilities for U.S.GAAP and IFRS are true except:

Accepted Answer

A)  The definitions and characteristics of current liabilities are broadly similar for both U.S. GAAP and IFRS. 
B)  The term provision is typically used under IFRS to refer to what is titled liability under U.S. GAAP. 
C)  Because tax regulatory systems of countries are different, the approach to recording taxes is totally different. 
D)  When there is little uncertainty surrounding current liabilities, both require companies to record them in a similar manner. 
E)  When there is a known current obligation that involves an uncertain amount, but one that can be reasonable estimated, both require similar treatment. 
A)  The definitions and characteristics of current liabilities are broadly similar for both U.S. GAAP and IFRS. 
B)  The term provision is typically used under IFRS to refer to what is titled liability under U.S. GAAP. 
C)  Because tax regulatory systems of countries are different, the approach to recording taxes is totally different. 
D)  When there is little uncertainty surrounding current liabilities, both require companies to record them in a similar manner. 
E)  When there is a known current obligation that involves an uncertain amount, but one that can be reasonable estimated, both require similar treatment.

Question 10

Trade accounts payable are amounts owed to suppliers for products or services purchased on credit.

Accepted Answer

A) True 
 B)False

Question 11

A company's had fixed interest expense of $5,000,its income before interest expense and income taxes is $17,000,and its net income is $9,400.The company's times interest earned ratio equals:

Accepted Answer

A)  0.5. 
B)  1.8. 
C)  1.9. 
D)  3.4. 
E)  0.3. 
A)  0.5. 
B)  1.8. 
C)  1.9. 
D)  3.4. 
E)  0.3.

Question 12

On April 12,Hong Company agrees to accept a 60-day,10%,$4,500 note from Indigo Company to extend the due date on an overdue account.What is the journal entry needed to record the transaction by Indigo Company?

Accepted Answer

A)  Debit Notes Payable $4,500; credit Accounts Payable $4,500. 
B)  Debit Accounts Payable $4,500; credit Notes Payable $4,500. 
C)  Debit Accounts Receivable $4,500; credit Notes Payable $4,500. 
D)  Debit Cash $4,500; credit Notes Payable $4,500. 
E)  Debit Sales $4,500; credit Notes Payable $4,500. 
A)  Debit Notes Payable $4,500; credit Accounts Payable $4,500. 
B)  Debit Accounts Payable $4,500; credit Notes Payable $4,500. 
C)  Debit Accounts Receivable $4,500; credit Notes Payable $4,500. 
D)  Debit Cash $4,500; credit Notes Payable $4,500. 
E)  Debit Sales $4,500; credit Notes Payable $4,500.

Question 13

An employee earned $4,600 in February working for an employer.Cumulative earnings of the previous pay periods are $4,800.The FICA tax rate for Social Security is 6.2% of the first $118,500 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.What is the amount the employer should record as payroll taxes expense for the month of February?

Accepted Answer

A)  $581.90 
B)  $110.00 
C)  $351.90 
D)  $483.90 
E)  $230.00 
A)  $581.90 
B)  $110.00 
C)  $351.90 
D)  $483.90 
E)  $230.00

Question 14

Accounts payable are:

Accepted Answer

A)  Amounts owed to suppliers for products and/or services purchased on credit. 
B)  Long-term liabilities. 
C)  Estimated liabilities. 
D)  Not usually due on specific dates. 
E)  Always payable within 30 days. 
A)  Amounts owed to suppliers for products and/or services purchased on credit. 
B)  Long-term liabilities. 
C)  Estimated liabilities. 
D)  Not usually due on specific dates. 
E)  Always payable within 30 days.

Question 15

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 16

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

Accepted Answer

Liabilities are probable future payments

Question 17

Describe contingent liabilities and how to account for and/or report them.

Accepted Answer

Contingent liabilities are uncertain obl

Question 18

The Federal Insurance Contributions Act (FICA)requires that each employer file a:

Accepted Answer

A)  W-4. 
B)  Form 941. 
C)  Form 1040. 
D)  Form 1099. 
E)  W-2. 
A)  W-4. 
B)  Form 941. 
C)  Form 1040. 
D)  Form 1099. 
E)  W-2.

Question 19

Match the following items with the appropriate designation (Current liability, Long-term liability, or Not a liability).
-Income taxes payable

Accepted Answer

A) Long-term liability 
B) Not a liability 
C) Current liability 
A) Long-term liability 
B) Not a liability 
C) Current liability

Question 20

Employees earn vacation pay at the rate of one day per month.During the month of July,25 employees qualify for one vacation day each.Their average daily wage is $100 per day.What is the amount of vacation benefit expense to be recorded for the month of July?

Accepted Answer

A)  $25 
B)  $100 
C)  $250 
D)  $2,500 
E)  $25,000 
A)  $25 
B)  $100 
C)  $250 
D)  $2,500 
E)  $25,000

Match each of the following terms with the appropriate definitions. -A potential obligation that depends on a future event arising from a past transaction.

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

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

A short-term note payable is a written promise to pay a specified amount on a definite future date within one year or the operating cycle,whichever is shorter.

Match the following items with the appropriate designation (Current liability, Long-term liability, or Not a liability). -60-day promissory note

A company's income before interest expense and income taxes is $302,400,and its interest expense is $62,000.Calculate the company's times interest earned ratio.

Match each of the following terms with the appropriate definitions. -Payroll taxes on employers assessed by the federal government to support the federal unemployment insurance program.

All of the following are true of known liabilities except:

All of the following statements related to current liabilities for U.S.GAAP and IFRS are true except:

Trade accounts payable are amounts owed to suppliers for products or services purchased on credit.

A company's had fixed interest expense of $5,000,its income before interest expense and income taxes is $17,000,and its net income is $9,400.The company's times interest earned ratio equals:

On April 12,Hong Company agrees to accept a 60-day,10%,$4,500 note from Indigo Company to extend the due date on an overdue account.What is the journal entry needed to record the transaction by Indigo Company?

Accounts payable are:

The deferred income tax liability:

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

Describe contingent liabilities and how to account for and/or report them.

The Federal Insurance Contributions Act (FICA)requires that each employer file a:

Match the following items with the appropriate designation (Current liability, Long-term liability, or Not a liability). -Income taxes payable

Employees earn vacation pay at the rate of one day per month.During the month of July,25 employees qualify for one vacation day each.Their average daily wage is $100 per day.What is the amount of vacation benefit expense to be recorded for the month of July?

Accounting in Business

Analyzing 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

Time Value of Money

Investments

Partnership Accounting

Filters

Exam 9: Accounting for Current Liabilities

Match each of the following terms with the appropriate definitions. -A potential obligation that depends on a future event arising from a past transaction.

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

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

A short-term note payable is a written promise to pay a specified amount on a definite future date within one year or the operating cycle,whichever is shorter.

Match the following items with the appropriate designation (Current liability, Long-term liability, or Not a liability). -60-day promissory note

A company's income before interest expense and income taxes is $302,400,and its interest expense is $62,000.Calculate the company's times interest earned ratio.

Match each of the following terms with the appropriate definitions. -Payroll taxes on employers assessed by the federal government to support the federal unemployment insurance program.

All of the following are true of known liabilities except:

All of the following statements related to current liabilities for U.S.GAAP and IFRS are true except:

Trade accounts payable are amounts owed to suppliers for products or services purchased on credit.

A company's had fixed interest expense of $5,000,its income before interest expense and income taxes is $17,000,and its net income is $9,400.The company's times interest earned ratio equals:

On April 12,Hong Company agrees to accept a 60-day,10%,$4,500 note from Indigo Company to extend the due date on an overdue account.What is the journal entry needed to record the transaction by Indigo Company?

Accounts payable are:

The deferred income tax liability:

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

Describe contingent liabilities and how to account for and/or report them.

The Federal Insurance Contributions Act (FICA)requires that each employer file a:

Match the following items with the appropriate designation (Current liability, Long-term liability, or Not a liability). -Income taxes payable

Employees earn vacation pay at the rate of one day per month.During the month of July,25 employees qualify for one vacation day each.Their average daily wage is $100 per day.What is the amount of vacation benefit expense to be recorded for the month of July?

Accounting in Business

Analyzing 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

Time Value of Money

Investments

Partnership Accounting

Filters