Question 1

A company borrowed $60,000 by signing a 60-day,5% note payable from its bank.Compute the total cash payment due on the note's maturity date.

Accepted Answer

At maturity: $60,000

Question 2

Short-term notes payable:

Accepted Answer

A)  Cannot replace an account payable. 
B)  Can be issued in return for money borrowed from a bank. 
C)  Are not negotiable. 
D)  Are a conditional promise to pay. 
E)  Rarely involve interest charges. 
A)  Cannot replace an account payable. 
B)  Can be issued in return for money borrowed from a bank. 
C)  Are not negotiable. 
D)  Are a conditional promise to pay. 
E)  Rarely involve interest charges.

Question 3

Early Co.offers its employees a bonus equal to 2% of the company's net income.The estimated net income for the year is expected to be $800,000.Prepare the general journal entry to record the estimated employee bonus plan expense.

Accepted Answer

B = 0.02($800,000 -

Question 4

Employees earn vacation pay at the rate of one day per month.During the month of June,10 employees qualify for one vacation day each.Their average daily wage is $150 per day.Which of the following is the necessary adjusting journal entry to record the June vacation benefits?

Accepted Answer

A)  Debit Vacation Benefits Expense $1,500; credit Prepaid Vacation Benefits $1,500. 
B)  Debit Vacation Benefits Expense $1,500; credit Vacation Benefits Payable $1,500. 
C)  Debit Payroll Tax Expense $1,500; credit Payroll Taxes Payable $1,500. 
D)  Debit Prepaid Vacation Benefits $1,500; credit Vacation Benefits Payable $1,500. 
E)  Debit Vacation Benefits Payable; credit Vacation Benefits Expense $1,500. 
A)  Debit Vacation Benefits Expense $1,500; credit Prepaid Vacation Benefits $1,500. 
B)  Debit Vacation Benefits Expense $1,500; credit Vacation Benefits Payable $1,500. 
C)  Debit Payroll Tax Expense $1,500; credit Payroll Taxes Payable $1,500. 
D)  Debit Prepaid Vacation Benefits $1,500; credit Vacation Benefits Payable $1,500. 
E)  Debit Vacation Benefits Payable; credit Vacation Benefits Expense $1,500.

Question 5

A company sells its product subject to a warranty that covers the cost of parts for repairs during the six months after the date of sale.Warranty costs are estimated to be 5% of sales.During the month of July,the company performed warranty work and used $11,000 of parts to perform the warranty work.Sales for July were $450,000.
1.Record the warranty expense for the month of July.
2.Record the costs of the warranty work completed in June.
3.If the Estimated Warranty Liability account had a credit balance of $10,000 on May 31,what is the account balance at July 31?

Accepted Answer

1.
 3.$10,

Question 6

The amount of federal income tax withheld from employee pay depends on the employee's annual earnings rate and the number of withholding allowances claimed by the employee.

Accepted Answer

A) True 
 B)False

Question 7

During June,Vixen Company sells $850,000 in merchandise that has a one year warranty.Experience shows that warranty expenses average about 3% of the selling price.Customers returned $14,000 of merchandise for warranty replacement during the month.The entry to settle the customer warranties is:

Accepted Answer

A)  Debit Warranty Expense $11,500; credit Estimated Warranty Liability $11,500. 
B)  Debit Estimated Warranty Liability $25,500; credit Warranty Expense $25,500. 
C)  Debit Warranty Expense $14,000; credit Estimated Warranty Liability $14,000. 
D)  Debit Estimated Warranty Liability $11,500; credit Merchandise Inventory $11,500. 
E)  Debit Estimated Warranty Liability $14,000; credit Merchandise Inventory $14,000. 
A)  Debit Warranty Expense $11,500; credit Estimated Warranty Liability $11,500. 
B)  Debit Estimated Warranty Liability $25,500; credit Warranty Expense $25,500. 
C)  Debit Warranty Expense $14,000; credit Estimated Warranty Liability $14,000. 
D)  Debit Estimated Warranty Liability $11,500; credit Merchandise Inventory $11,500. 
E)  Debit Estimated Warranty Liability $14,000; credit Merchandise Inventory $14,000.

Question 8

Deposits of amounts payable to the federal government may be paid through federal depository banks.

Accepted Answer

A) True 
 B)False

Question 9

A company's fixed interest expense is $8,000,its income before interest expense and income taxes is $32,000.Its net income is $9,600.The company's times interest earned ratio equals:

Accepted Answer

A)  0.25. 
B)  0.30. 
C)  0.83. 
D)  3.33. 
E)  4.0. 
A)  0.25. 
B)  0.30. 
C)  0.83. 
D)  3.33. 
E)  4.0.

Question 10

The correct times interest earned computation is:

Accepted Answer

A)  (Net income + Interest expense + Income taxes)/Interest expense. 
B)  (Net income + Interest expense - Income taxes)/Interest expense. 
C)  (Net income - Interest expense - Income taxes)/Interest expense. 
D)  (Net income - Interest expense + Income taxes)/Interest expense. 
E)  Interest expense/(Net income + Interest expense + Income taxes expense). 
A)  (Net income + Interest expense + Income taxes)/Interest expense. 
B)  (Net income + Interest expense - Income taxes)/Interest expense. 
C)  (Net income - Interest expense - Income taxes)/Interest expense. 
D)  (Net income - Interest expense + Income taxes)/Interest expense. 
E)  Interest expense/(Net income + Interest expense + Income taxes expense).

Question 11

FICA taxes include:

Accepted Answer

A)  Social Security and Medicare taxes. 
B)  Charitable giving. 
C)  Employee state income tax. 
D)  Federal and state unemployment taxes. 
E)  Employee federal income tax. 
A)  Social Security and Medicare taxes. 
B)  Charitable giving. 
C)  Employee state income tax. 
D)  Federal and state unemployment taxes. 
E)  Employee federal income tax.

Question 12

Contingent liabilities are recorded in the accounts if the future event is ________ and the amount owed can be ________.

Accepted Answer

Answers m

Question 13

A potential lawsuit claim is disclosed when the claim can be reasonably estimated and it is reasonably possible.

Accepted Answer

A) True 
 B)False

Question 14

Match the following items with the appropriate designation (Current liability, Long-term liability, or Not a liability).
-FICA 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 15

Which of the following is not true regarding the unemployment insurance program?

Accepted Answer

A)  It requires withholding from the employee wages. 
B)  It is administered by each state. 
C)  It provides unemployment benefits to qualified workers. 
D)  It adjusts rates paid by employers based on their merit rating. 
E)  It is a joint federal and state program. 
A)  It requires withholding from the employee wages. 
B)  It is administered by each state. 
C)  It provides unemployment benefits to qualified workers. 
D)  It adjusts rates paid by employers based on their merit rating. 
E)  It is a joint federal and state program.

Question 16

A company's employees had the following earnings records at the close of the current payroll period:
 $\begin{array}{lll}
&\text {Prior Pay}&\text {Earning this}\ 
&\text {Earning}\
&\text { through}\ 
\text {Employees}&\text {Period}&\text {Pay Period}\
\text { F. Argent } & \$ 11,300 &\$3,900 \
\text { A. Garza} & 6,100 & 2,500 \
\text { L. Hong } & 9,500 & 3,100 \
\text { R. Levinson } & 4,800 & 1,400 \
\text { J. Young } & 10,000 & 3,000
\end{array}$
 
The company's payroll taxes expense on each employee's earnings includes: FICA Social Security taxes of 6.2% on the first $118,500 of earnings plus 1.45% FICA Medicare on all wages; 0.6% federal unemployment taxes on the first $7,000; and 2.5% state unemployment taxes on the first $7,000.Compute the employer's total payroll taxes expense for the current pay period.

Accepted Answer

<sup>1 </sup>Employe

Question 17

To compute the amount of tax withheld from an employee's pay,employers can use a ________ table.

Accepted Answer

wage brack

Question 18

The more ________ allowances an employee claims,the less federal income tax the employer will deduct from pay.

Accepted Answer

The answer of The more ________ allowances an employee claims,the...

Question 19

An employer has an employee benefit package that includes employer-paid health insurance and an employer-paid retirement program.During March,the employer paid $5,500 for health insurance,and contributed to the employee retirement program 10% of the employees' $120,000 gross salaries.Prepare the journal entry to record these employee benefits.

Accepted Answer

\[\begin{array} { l l } 
\text

Question 20

Drake Company pays its employees for two weeks of vacation each year.The total annual cost of the vacation benefit is $109,920.Prepare the journal entry to record the monthly accrued vacation expense.

Accepted Answer

None

A company borrowed $60,000 by signing a 60-day,5% note payable from its bank.Compute the total cash payment due on the note's maturity date.

Short-term notes payable:

Early Co.offers its employees a bonus equal to 2% of the company's net income.The estimated net income for the year is expected to be $800,000.Prepare the general journal entry to record the estimated employee bonus plan expense.

Employees earn vacation pay at the rate of one day per month.During the month of June,10 employees qualify for one vacation day each.Their average daily wage is $150 per day.Which of the following is the necessary adjusting journal entry to record the June vacation benefits?

The amount of federal income tax withheld from employee pay depends on the employee's annual earnings rate and the number of withholding allowances claimed by the employee.

During June,Vixen Company sells $850,000 in merchandise that has a one year warranty.Experience shows that warranty expenses average about 3% of the selling price.Customers returned $14,000 of merchandise for warranty replacement during the month.The entry to settle the customer warranties is:

Deposits of amounts payable to the federal government may be paid through federal depository banks.

A company's fixed interest expense is $8,000,its income before interest expense and income taxes is $32,000.Its net income is $9,600.The company's times interest earned ratio equals:

The correct times interest earned computation is:

FICA taxes include:

Contingent liabilities are recorded in the accounts if the future event is and the amount owed can be .

A potential lawsuit claim is disclosed when the claim can be reasonably estimated and it is reasonably possible.

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

Which of the following is not true regarding the unemployment insurance program?

To compute the amount of tax withheld from an employee's pay,employers can use a ________ table.

The more ________ allowances an employee claims,the less federal income tax the employer will deduct from pay.

Drake Company pays its employees for two weeks of vacation each year.The total annual cost of the vacation benefit is $109,920.Prepare the journal entry to record the monthly accrued vacation expense.

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 borrowed $60,000 by signing a 60-day,5% note payable from its bank.Compute the total cash payment due on the note's maturity date.

Short-term notes payable:

Early Co.offers its employees a bonus equal to 2% of the company's net income.The estimated net income for the year is expected to be $800,000.Prepare the general journal entry to record the estimated employee bonus plan expense.

Employees earn vacation pay at the rate of one day per month.During the month of June,10 employees qualify for one vacation day each.Their average daily wage is $150 per day.Which of the following is the necessary adjusting journal entry to record the June vacation benefits?

The amount of federal income tax withheld from employee pay depends on the employee's annual earnings rate and the number of withholding allowances claimed by the employee.

During June,Vixen Company sells $850,000 in merchandise that has a one year warranty.Experience shows that warranty expenses average about 3% of the selling price.Customers returned $14,000 of merchandise for warranty replacement during the month.The entry to settle the customer warranties is:

Deposits of amounts payable to the federal government may be paid through federal depository banks.

A company's fixed interest expense is $8,000,its income before interest expense and income taxes is $32,000.Its net income is $9,600.The company's times interest earned ratio equals:

The correct times interest earned computation is:

FICA taxes include:

Contingent liabilities are recorded in the accounts if the future event is ________ and the amount owed can be ________.

A potential lawsuit claim is disclosed when the claim can be reasonably estimated and it is reasonably possible.

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

Which of the following is not true regarding the unemployment insurance program?

To compute the amount of tax withheld from an employee's pay,employers can use a ________ table.

The more ________ allowances an employee claims,the less federal income tax the employer will deduct from pay.

Drake Company pays its employees for two weeks of vacation each year.The total annual cost of the vacation benefit is $109,920.Prepare the journal entry to record the monthly accrued vacation expense.

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

Contingent liabilities are recorded in the accounts if the future event is and the amount owed can be .