Question 1

Short-term notes payable:

Accepted Answer

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

Question 2

A contingent liability is:

Accepted Answer

A)  An obligation not requiring future payment. 
B)  Always of a specific amount. 
C)  An obligation arising from a future event. 
D)  An obligation arising from the purchase of goods or services on credit. 
E)  A potential obligation that depends on a future event arising from a past transaction or event. 
A)  An obligation not requiring future payment. 
B)  Always of a specific amount. 
C)  An obligation arising from a future event. 
D)  An obligation arising from the purchase of goods or services on credit. 
E)  A potential obligation that depends on a future event arising from a past transaction or event.

Question 3

A company's income before interest expense and income taxes in 2014 and 2015 is $487,500 and
$427,000, respectively. Its fixed interest expense was $125,000 for both years. Calculate the company's times interest earned ratio, and comment on its level of risk.

Accepted Answer

2014: 3.9; 2015: 3.4
Risk analysis: The

Question 4

A contingent liability is a potential obligation that depends on a future event arising from a past transaction or event.

Accepted Answer

A) True 
 B)False

Question 5

FUTA requires employers to pay a federal unemployment tax on all salary or wages paid to each employee.

Accepted Answer

A) True 
 B)False

Question 6

A high value for the times interest earned ratio means that a company is a lower risk borrower.

Accepted Answer

A) True 
 B)False

Question 7

In order to be reported, liabilities must:

Accepted Answer

A)  Involve an outflow of cash. 
B)  Always have a definite date for payment. 
C)  Be for a specific amount. 
D)  Sometimes be estimated. 
E)  Be certain. 
A)  Involve an outflow of cash. 
B)  Always have a definite date for payment. 
C)  Be for a specific amount. 
D)  Sometimes be estimated. 
E)  Be certain.

Question 8

Even if the end of an accounting period occurs between the signing of a note payable and its maturity date, the matching principle requires that interest expense not be accrued on a note payable until the note is paid.

Accepted Answer

A) True 
 B)False

Question 9

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,...

Question 10

Gross pay is:

Accepted Answer

A)  Total compensation earned by an employee before any deductions. 
B)  Salaries after taxes are deducted. 
C)  Deductions withheld by an employer. 
D)  The amount of the paycheck. 
E)  Take-home pay. 
A)  Total compensation earned by an employee before any deductions. 
B)  Salaries after taxes are deducted. 
C)  Deductions withheld by an employer. 
D)  The amount of the paycheck. 
E)  Take-home pay.

Short-term notes payable:

A contingent liability is:

A company's income before interest expense and income taxes in 2014 and 2015 is $487,500 and $427,000, respectively. Its fixed interest expense was $125,000 for both years. Calculate the company's times interest earned ratio, and comment on its level of risk.

A contingent liability is a potential obligation that depends on a future event arising from a past transaction or event.

FUTA requires employers to pay a federal unemployment tax on all salary or wages paid to each employee.

A high value for the times interest earned ratio means that a company is a lower risk borrower.

In order to be reported, liabilities must:

Even if the end of an accounting period occurs between the signing of a note payable and its maturity date, the matching principle requires that interest expense not be accrued on a note payable until the note is paid.

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

Gross pay is:

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

Filters

Exam 11: Current Liabilities and Payroll Accounting

Short-term notes payable:

A contingent liability is:

A company's income before interest expense and income taxes in 2014 and 2015 is $487,500 and $427,000, respectively. Its fixed interest expense was $125,000 for both years. Calculate the company's times interest earned ratio, and comment on its level of risk.

A contingent liability is a potential obligation that depends on a future event arising from a past transaction or event.

FUTA requires employers to pay a federal unemployment tax on all salary or wages paid to each employee.

A high value for the times interest earned ratio means that a company is a lower risk borrower.

In order to be reported, liabilities must:

Even if the end of an accounting period occurs between the signing of a note payable and its maturity date, the matching principle requires that interest expense not be accrued on a note payable until the note is paid.

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

Gross pay is:

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

Filters