Question 1

Vacation benefits are a type of  __________ liability.

Accepted Answer

estimated

Question 2

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

Accepted Answer

A) True 
 B)False  True

Question 3

On September 1, Knack Company signed a $50,000, 90-day, 5% note payable with Central Savings Bank. What is the journal entry that should be recorded by Knack upon maturity of the note? (Use 360 days a year.)

Accepted Answer

A)  Debit Notes Payable $50,625; credit Cash $50,625. 
B)  Debit Notes Payable $50,000; debit Interest Expense $625; credit Cash $50,625. 
C)  Debit Interest Expense $625; credit Interest Payable $625. 
D)  Debit Notes Payable $50,000; credit Interest Revenue $625; credit Cash $49,375. 
E)  Debit Cash $50,625; credit Notes Receivable $50,625. 
A)  Debit Notes Payable $50,625; credit Cash $50,625. 
B)  Debit Notes Payable $50,000; debit Interest Expense $625; credit Cash $50,625. 
C)  Debit Interest Expense $625; credit Interest Payable $625. 
D)  Debit Notes Payable $50,000; credit Interest Revenue $625; credit Cash $49,375. 
E)  Debit Cash $50,625; credit Notes Receivable $50,625. B

Question 4

Employer payroll taxes:

Accepted Answer

A)  Are payable for up to a maximum $117,000 of employee earnings. 
B)  Are paid by the employee. 
C)  Are added expenses beyond that for the wages and salaries earned by employees. 
D)  Represent the social security taxes withheld from employees. 
E)  Represent the federal taxes withheld from employees. 
A)  Are payable for up to a maximum $117,000 of employee earnings. 
B)  Are paid by the employee. 
C)  Are added expenses beyond that for the wages and salaries earned by employees. 
D)  Represent the social security taxes withheld from employees. 
E)  Represent the federal taxes withheld from employees.

Question 5

Uncertainties such as natural disasters are:

Accepted Answer

A)  Disclosed because of their usefulness to financial statements. 
B)  Contingent liabilities because they are future events arising from past transactions or events. 
C)  Estimated liabilities because the amounts are uncertain. 
D)  Not contingent liabilities because they are future events not arising from past transactions or events. 
E)  Reported in the same way as debt guarantees. 
A)  Disclosed because of their usefulness to financial statements. 
B)  Contingent liabilities because they are future events arising from past transactions or events. 
C)  Estimated liabilities because the amounts are uncertain. 
D)  Not contingent liabilities because they are future events not arising from past transactions or events. 
E)  Reported in the same way as debt guarantees.

Question 6

Estimated liabilities commonly arise from all of the following except:

Accepted Answer

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

Question 7

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

Question 8

What is a short-term note payable? Explain the accounting issues related to notes payable.

Accepted Answer

A short-term note payable is a written p

Question 9

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 10

The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both taxes are applied to the first $7,000 of an employee's pay.
- Assume that an employee earned total wages of $2,900 in the current period and had cumulative pay for prior periods of $5,800. What is the amount of unemployment taxes the employer must pay on this employee's wages for the current period?

Accepted Answer

A)  $174.00. 
B)  $0.00. 
C)  $348.00. 
D)  $420.00. 
E)  $72.00. 
A)  $174.00. 
B)  $0.00. 
C)  $348.00. 
D)  $420.00. 
E)  $72.00.

Question 11

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 12

Gross pay less all deductions is called ________.

Accepted Answer

The answer of Gross pay less all deductions is called...

Question 13

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

Accepted Answer

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

Question 14

Times interest earned is calculated by:

Accepted Answer

A)  Dividing income before interest expense and income taxes by interest expense. 
B)  Dividing interest expense by income before interest expense. 
C)  Multiplying interest expense by income. 
D)  Dividing income before interest expense by interest expense and income taxes. 
E)  Multiplying interest expense by income before interest expense. 
A)  Dividing income before interest expense and income taxes by interest expense. 
B)  Dividing interest expense by income before interest expense. 
C)  Multiplying interest expense by income. 
D)  Dividing income before interest expense by interest expense and income taxes. 
E)  Multiplying interest expense by income before interest expense.

Question 15

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 16

The Wage and Tax Statement given to each employee annually is:

Accepted Answer

A)  Form W-4. 
B)  Form 1040. 
C)  Form W-2. 
D)  Form 941. 
E)  Form 940. 
A)  Form W-4. 
B)  Form 1040. 
C)  Form W-2. 
D)  Form 941. 
E)  Form 940.

Question 17

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 18

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 19

The times interest earned ratio is calculated by dividing interest expense by income before interest expense and income taxes.

Accepted Answer

A) True 
 B)False

Question 20

All expected future payments are liabilities.

Accepted Answer

A) True 
 B)False

Exam 11: Current Liabilities and Payroll Accounting

Vacation benefits are a type of __________ liability.

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

On September 1, Knack Company signed a $50,000, 90-day, 5% note payable with Central Savings Bank. What is the journal entry that should be recorded by Knack upon maturity of the note? (Use 360 days a year.)

Employer payroll taxes:

Uncertainties such as natural disasters are:

Estimated liabilities commonly arise from all of the following except:

The correct times interest earned computation is:

What is a short-term note payable? Explain the accounting issues related to notes payable.

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

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.

Gross pay less all deductions is called ________.

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

Times interest earned is calculated by:

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

The Wage and Tax Statement given to each employee annually is:

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.

The times interest earned ratio is calculated by dividing interest expense by income before interest expense and income taxes.

All expected future payments are liabilities.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets Natural Resoures and Intangibles

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Present and Future Values in Accounting

Activity-Based Costing

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