Question 1

A company's income before interest expense and income taxes is $350,000 and its interest expense is $100,000.Its times interest earned ratio is:

Accepted Answer

A)  0.29 
B)  3.50 
C)  2.50 
D)  1.75 
E)  0.50 
A)  0.29 
B)  3.50 
C)  2.50 
D)  1.75 
E)  0.50

Question 2

When the number of withholding allowances claimed on Form W-4 increases,the amount of income tax withheld decreases.

Accepted Answer

A) True 
 B)False

Question 3

Match the following items with the appropriate designation (Current liability, Long-term liability, or Not a liability).
-Salaries 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 4

Employers must keep individual earnings reports for each employee.

Accepted Answer

A) True 
 B)False

Question 5

Obligations 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 6

A ________ shows the pay period dates,hours worked,gross pay,deductions,and net pay of each employee for every pay period.

Accepted Answer

The answer of A ________ shows the pay period dates,hours...

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Match each of the following terms with the appropriate definitions.
-A calculation of a company's risk of its ability to pay interest when due.

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 9

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 $118,500 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)  $1,147.00 
C)  $1,240.00 
D)  $268.25 
E)  $290.00 
A)  $7,347.00 
B)  $1,147.00 
C)  $1,240.00 
D)  $268.25 
E)  $290.00

Question 10

Match the following items with the appropriate designation (Current liability, Long-term liability, or Not a liability).
-Payment of a 30-year term loan due next year.(The company's operating cycle is 2 months.)

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 11

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 12

If the times interest earned ratio:

Accepted Answer

A)  Increases, then risk increases. 
B)  Increases, then risk decreases. 
C)  Is greater than 1.5, the company is in default. 
D)  Is less than 1.5, the company is carrying too little debt. 
E)  Is greater than 3.0, the company is likely carrying too much debt. 
A)  Increases, then risk increases. 
B)  Increases, then risk decreases. 
C)  Is greater than 1.5, the company is in default. 
D)  Is less than 1.5, the company is carrying too little debt. 
E)  Is greater than 3.0, the company is likely carrying too much debt.

Question 13

Gary Marks is paid on a monthly basis.For the month of January of the current year,he earned a total of $8,288.FICA tax for Social Security is 6.2% on the first $118,500 of earnings each calendar year and the FICA tax for Medicare is 1.45% of all earnings.The 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 amount of Federal Income Tax withheld from his earnings was $1,375.17.What is the amount of the employer's payroll taxes expenses for this employee? (Round your intermediate calculations to two decimal places.)

Accepted Answer

A)  $2,009.21 
B)  $1,131.31 
C)  $2,506.48 
D)  $420.00 
E)  $1,054.04 
A)  $2,009.21 
B)  $1,131.31 
C)  $2,506.48 
D)  $420.00 
E)  $1,054.04

Question 14

A short-term note payable:

Accepted Answer

A)  Is 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. 
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 definite 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 15

All of the following statements regarding long-term liabilities are true except?

Accepted Answer

A)  Liabilities not expected to be paid within the longer of one year or the company's operating cycle are reported as long-term liabilities. 
B)  Long-term liabilities include long-term notes payable, warranty liabilities, lease liabilities, and bonds payable. 
C)  Liabilities that do not have a fixed due date, but are payable on demand, are reported as long-term liabilities. 
D)  Long-term liabilities can be reported on the balance sheet in a single total or in multiple categories. 
E)  A single long-term liability can be divided between current and noncurrent sections on the balance sheet. 
A)  Liabilities not expected to be paid within the longer of one year or the company's operating cycle are reported as long-term liabilities. 
B)  Long-term liabilities include long-term notes payable, warranty liabilities, lease liabilities, and bonds payable. 
C)  Liabilities that do not have a fixed due date, but are payable on demand, are reported as long-term liabilities. 
D)  Long-term liabilities can be reported on the balance sheet in a single total or in multiple categories. 
E)  A single long-term liability can be divided between current and noncurrent sections on the balance sheet.

Question 16

All of the following are employer payroll taxes except:

Accepted Answer

A)  Social Security tax equal to that withheld from employees. 
B)  Medicare tax equal to that withheld from employees. 
C)  State unemployment tax. 
D)  Federal unemployment tax. 
E)  Federal income tax equal to that withheld from employees. 
A)  Social Security tax equal to that withheld from employees. 
B)  Medicare tax equal to that withheld from employees. 
C)  State unemployment tax. 
D)  Federal unemployment tax. 
E)  Federal income tax equal to that withheld from employees.

Question 17

Estimated liabilities commonly arise from all of the following except:

Accepted Answer

A)  Warranties. 
B)  Vacation benefits. 
C)  Income taxes. 
D)  Employee benefits. 
E)  Unearned revenues. 
A)  Warranties. 
B)  Vacation benefits. 
C)  Income taxes. 
D)  Employee benefits. 
E)  Unearned revenues.

Question 18

A single liability cannot be divided between current and noncurrent liabilities.

Accepted Answer

A) True 
 B)False

Question 19

An estimated liability:

Accepted Answer

A)  Is an unknown liability of a certain amount. 
B)  Is a known obligation of an uncertain amount that can be reasonably estimated. 
C)  Is a liability that may occur if a future event occurs. 
D)  Can be the result of a lawsuit. 
E)  Is not recorded until the amount is known for certain. 
A)  Is an unknown liability of a certain amount. 
B)  Is a known obligation of an uncertain amount that can be reasonably estimated. 
C)  Is a liability that may occur if a future event occurs. 
D)  Can be the result of a lawsuit. 
E)  Is not recorded until the amount is known for certain.

Question 20

A company has advance subscription sales totaling $45,000 for the upcoming year when four quarterly journals will mailed to customers.When the company mails the first quarterly journal to customers,it should record:

Accepted Answer

A)  Debit Prepaid Subscriptions $33,750; credit Unearned Revenue $33,750. 
B)  Debit Unearned Revenue $45,000; credit Cash $45,000. 
C)  Debit Cash $11,250, credit Sales $11,250. 
D)  Debit Unearned Revenue $11,250, credit Sales $11,250. 
E)  Debit Prepaid Subscriptions $11,250, credit Sales $11,250. 
A)  Debit Prepaid Subscriptions $33,750; credit Unearned Revenue $33,750. 
B)  Debit Unearned Revenue $45,000; credit Cash $45,000. 
C)  Debit Cash $11,250, credit Sales $11,250. 
D)  Debit Unearned Revenue $11,250, credit Sales $11,250. 
E)  Debit Prepaid Subscriptions $11,250, credit Sales $11,250.

A company's income before interest expense and income taxes is $350,000 and its interest expense is $100,000.Its times interest earned ratio is:

When the number of withholding allowances claimed on Form W-4 increases,the amount of income tax withheld decreases.

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

Employers must keep individual earnings reports for each employee.

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

A ________ shows the pay period dates,hours worked,gross pay,deductions,and net pay of each employee for every pay period.

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

Match each of the following terms with the appropriate definitions. -A calculation of a company's risk of its ability to pay interest when due.

Match the following items with the appropriate designation (Current liability, Long-term liability, or Not a liability). -Payment of a 30-year term loan due next year.(The company's operating cycle is 2 months.)

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

If the times interest earned ratio:

A short-term note payable:

All of the following statements regarding long-term liabilities are true except?

All of the following are employer payroll taxes except:

Estimated liabilities commonly arise from all of the following except:

A single liability cannot be divided between current and noncurrent liabilities.

An estimated liability:

A company has advance subscription sales totaling $45,000 for the upcoming year when four quarterly journals will mailed to customers.When the company mails the first quarterly journal to customers,it should record:

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

A company's income before interest expense and income taxes is $350,000 and its interest expense is $100,000.Its times interest earned ratio is:

When the number of withholding allowances claimed on Form W-4 increases,the amount of income tax withheld decreases.

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

Employers must keep individual earnings reports for each employee.

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

A ________ shows the pay period dates,hours worked,gross pay,deductions,and net pay of each employee for every pay period.

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

Match each of the following terms with the appropriate definitions. -A calculation of a company's risk of its ability to pay interest when due.

Match the following items with the appropriate designation (Current liability, Long-term liability, or Not a liability). -Payment of a 30-year term loan due next year.(The company's operating cycle is 2 months.)

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

If the times interest earned ratio:

A short-term note payable:

All of the following statements regarding long-term liabilities are true except?

All of the following are employer payroll taxes except:

Estimated liabilities commonly arise from all of the following except:

A single liability cannot be divided between current and noncurrent liabilities.

An estimated liability:

A company has advance subscription sales totaling $45,000 for the upcoming year when four quarterly journals will mailed to customers.When the company mails the first quarterly journal to customers,it should record:

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