Question 1

All expected future payments are liabilities.

Accepted Answer

A) True 
 B)False

Question 2

Identify and explain the types of employer payroll taxes.

Accepted Answer

Employers are required to contribute an

Question 3

An employee earned $43,300 working for an employer in the current year.The current rate for FICA Social Security is 6.2% payable on earnings up to $118,500 maximum per year and the rate for FICA Medicare 1.45%.The employer's total FICA payroll tax for this employee is:

Accepted Answer

A)  $8,950.50. 
B)  $5,638.05. 
C)  $3,312.45. 
D)  $2,684.60. 
E)  $0, since the FICA tax is only deducted from an employee's pay. 
A)  $8,950.50. 
B)  $5,638.05. 
C)  $3,312.45. 
D)  $2,684.60. 
E)  $0, since the FICA tax is only deducted from an employee's pay.

Question 4

On November 1,Alan Company signed a 120-day,8% note payable,with a face value of $9,000.
-What is the maturity value of the note on March 1? (Use 360 days a year.)

Accepted Answer

A)  $9,000 
B)  $720 
C)  $9,120 
D)  $9,720 
E)  $9,240 
A)  $9,000 
B)  $720 
C)  $9,120 
D)  $9,720 
E)  $9,240

Question 5

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 6

Match the following items with the appropriate designation (Estimated liability, Contingent liability, or Known liability).
-Income taxes payable

Accepted Answer

A) Contingent liability 
B) Estimated liability 
C) Known liability 
A) Contingent liability 
B) Estimated liability 
C) Known liability

Question 7

Deacon Company provides you with following information related to payroll transactions for the month of May.Prepare journal entries to record the transactions for May.
 $$\begin{array} { | c | c | c | c | c | } 
\hline \begin{array} { c } 
\text { Office } \
\text { Salaries }
\end{array} & \text { Sales Salaries } & \begin{array} { c } 
\text { Social Security } \
\text { Taxes }
\end{array} & \text { Medicare Taxes } & \begin{array} { c } 
\text { Federal Income } \
\text { Taxes }
\end{array} \
\hline \$ 38,000 & \$ 26,000 & \$ 3,968 & \$ 928 & \$ 5,600 \
\hline
\end{array}$$ 
a.Recorded the May payroll using the payroll register information given above.
b.Recorded the employer's payroll taxes resulting from the May payroll.The company had a merit rating that reduces its state unemployment tax rate to 3.5% of the first $7,000 paid each employee.Only $42,000 of the current months salaries are subject to unemployment taxes.The federal rate is 0.6%.
c.Issued a check to Reliant Bank in payment of the May FICA and employee taxes.
d.Issued a check to the state for the payment of the SUTA taxes for the month of May.
e.Issued a check to Reliant Bank in payment of the employer's quarterly FUTA taxes for the first quarter in the amount of $1,020.

Accepted Answer

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

Question 8

The payroll records of a company provided the following data for the weekly pay period ended December 7:
 $\begin{array}{lcccccc}
&\text { to End of } && \text { Federal }& \text { Medical }\
&\text { Previous}& \text { Gross }& \text {Income }& \text {Insurance }& \text {Union }& \text {United }\ 
\text { Employee} &\text {Week} &\text { Pay } &\text { Taxes } &\text { Deduction } &\text {Dues } &\text {Way }\ 
\text { Ronald Arthur } & \$ 54,000 & \$ 1,200 & \$ 216 & \$ 125 & \$ 15 & \$ 15 \
\text { John Baines } & 40,500 & 900 & 162 & 125 & 15 & 30 \
\text { Ted Carter } & 45,000 & 1,000 & 180 & 150 & -0- & 20
\end{array}$
 
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 0.8% 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

None

Question 9

A company's income before interest expense and taxes is $250,000 and its interest expense is $100,000.Its times interest earned ratio is 2.5.

Accepted Answer

A) True 
 B)False

Question 10

Match each of the following terms with the appropriate definitions.
-A record for a pay period that shows the pay period dates,regular and overtime hours worked,gross pay,net pay and deductions.

Accepted Answer

A) Short-term note payable 
B) Deferred income tax liability 
C) Current liabilities 
D) Warranty 
E) Employee benefits
F)Federal depository bank
G)Payroll register
H)Gross pay
I)Payroll bank account
J)Times interest earned 
A) Short-term note payable 
B) Deferred income tax liability 
C) Current liabilities 
D) Warranty 
E) Employee benefits
F)Federal depository bank
G)Payroll register
H)Gross pay
I)Payroll bank account
J)Times interest earned

Question 11

Match the following items with the appropriate designation (Estimated liability, Contingent liability, or Known liability).
-Lawsuit against the company

Accepted Answer

A) Contingent liability 
B) Estimated liability 
C) Known liability 
A) Contingent liability 
B) Estimated liability 
C) Known liability

Question 12

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 13

Match each of the following terms with the appropriate definitions.
-A written promise to pay a specified amount on a definite future date within one year or the company's operating cycle,whichever is longer.

Accepted Answer

A) Short-term note payable 
B) Deferred income tax liability 
C) Current liabilities 
D) Warranty 
E) Employee benefits
F)Federal depository bank
G)Payroll register
H)Gross pay
I)Payroll bank account
J)Times interest earned 
A) Short-term note payable 
B) Deferred income tax liability 
C) Current liabilities 
D) Warranty 
E) Employee benefits
F)Federal depository bank
G)Payroll register
H)Gross pay
I)Payroll bank account
J)Times interest earned

Question 14

A ________ is a seller's obligation to replace or correct a product or service that fails to perform as expected within a specified period.

Accepted Answer

The answer of A ________ is a seller's obligation to...

Question 15

A company's income before interest expense and income taxes in 2014 and 2015 is $225,000 and $250,000,respectively.Its interest expense was $45,000 for both years.Calculate the company's times interest earned ratio,and comment on its level of risk.

Accepted Answer

2014: 5.0
2015: 5.6
Risk analysis: The i

Question 16

All of the following statements regarding liabilities are true except:

Accepted Answer

A)  A liability is a probable future payment of assets or services. 
B)  Unearned future wages to be paid to employees should be recorded as liabilities. 
C)  For a liability to be reported, it must be a present obligation that results from a past transaction or event, and requires a future payment of assets or services. 
D)  Information about liabilities is more useful when the balance sheet identifies them as either current or long term. 
E)  Liabilities can involve uncertainty in whom to pay. 
A)  A liability is a probable future payment of assets or services. 
B)  Unearned future wages to be paid to employees should be recorded as liabilities. 
C)  For a liability to be reported, it must be a present obligation that results from a past transaction or event, and requires a future payment of assets or services. 
D)  Information about liabilities is more useful when the balance sheet identifies them as either current or long term. 
E)  Liabilities can involve uncertainty in whom to pay.

Question 17

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

None

Question 18

A company sells tablet computers for $1,300 each.The price includes a two-year warranty.During the current year,the company sells 400 tablets.On the basis of past experience,the warranty costs are estimated to be $280 per tablet.The actual warranty costs (paid in cash)by the company during the current year were $65,000.Prepare general journal entries to record the (a)estimated warranty expense and (b)warranty repair costs during current year.

Accepted Answer

None

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

Match the following items with the appropriate designation (Estimated liability, Contingent liability, or Known liability).
-Accounts payable

Accepted Answer

A) Contingent liability 
B) Estimated liability 
C) Known liability 
A) Contingent liability 
B) Estimated liability 
C) Known liability

All expected future payments are liabilities.

Identify and explain the types of employer payroll taxes.

An employee earned $43,300 working for an employer in the current year.The current rate for FICA Social Security is 6.2% payable on earnings up to $118,500 maximum per year and the rate for FICA Medicare 1.45%.The employer's total FICA payroll tax for this employee is:

On November 1,Alan Company signed a 120-day,8% note payable,with a face value of $9,000. -What is the maturity value of the note on March 1? (Use 360 days a year.)

Uncertainties such as natural disasters are:

Match the following items with the appropriate designation (Estimated liability, Contingent liability, or Known liability). -Income taxes payable

A company's income before interest expense and taxes is $250,000 and its interest expense is $100,000.Its times interest earned ratio is 2.5.

Match each of the following terms with the appropriate definitions. -A record for a pay period that shows the pay period dates,regular and overtime hours worked,gross pay,net pay and deductions.

Match the following items with the appropriate designation (Estimated liability, Contingent liability, or Known liability). -Lawsuit against the company

Recording employee payroll deductions may involve:

Match each of the following terms with the appropriate definitions. -A written promise to pay a specified amount on a definite future date within one year or the company's operating cycle,whichever is longer.

A ________ is a seller's obligation to replace or correct a product or service that fails to perform as expected within a specified period.

A company's income before interest expense and income taxes in 2014 and 2015 is $225,000 and $250,000,respectively.Its interest expense was $45,000 for both years.Calculate the company's times interest earned ratio,and comment on its level of risk.

All of the following statements regarding liabilities are true except:

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

Match the following items with the appropriate designation (Estimated liability, Contingent liability, or Known liability). -Accounts payable

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

All expected future payments are liabilities.

Identify and explain the types of employer payroll taxes.

An employee earned $43,300 working for an employer in the current year.The current rate for FICA Social Security is 6.2% payable on earnings up to $118,500 maximum per year and the rate for FICA Medicare 1.45%.The employer's total FICA payroll tax for this employee is:

On November 1,Alan Company signed a 120-day,8% note payable,with a face value of $9,000. -What is the maturity value of the note on March 1? (Use 360 days a year.)

Uncertainties such as natural disasters are:

Match the following items with the appropriate designation (Estimated liability, Contingent liability, or Known liability). -Income taxes payable

A company's income before interest expense and taxes is $250,000 and its interest expense is $100,000.Its times interest earned ratio is 2.5.

Match each of the following terms with the appropriate definitions. -A record for a pay period that shows the pay period dates,regular and overtime hours worked,gross pay,net pay and deductions.

Match the following items with the appropriate designation (Estimated liability, Contingent liability, or Known liability). -Lawsuit against the company

Recording employee payroll deductions may involve:

Match each of the following terms with the appropriate definitions. -A written promise to pay a specified amount on a definite future date within one year or the company's operating cycle,whichever is longer.

A ________ is a seller's obligation to replace or correct a product or service that fails to perform as expected within a specified period.

A company's income before interest expense and income taxes in 2014 and 2015 is $225,000 and $250,000,respectively.Its interest expense was $45,000 for both years.Calculate the company's times interest earned ratio,and comment on its level of risk.

All of the following statements regarding liabilities are true except:

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

Match the following items with the appropriate designation (Estimated liability, Contingent liability, or Known liability). -Accounts payable

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