Question 1

FUTA taxes are:

Accepted Answer

A)  Social Security taxes. 
B)  Employee income taxes. 
C)  Medicare taxes. 
D)  Unemployment taxes. 
E)  Employee deductions. 
A)  Social Security taxes. 
B)  Employee income taxes. 
C)  Medicare taxes. 
D)  Unemployment taxes. 
E)  Employee deductions.

Question 2

Accrued vacation benefits are a form of estimated liability for an employer.

Accepted Answer

A) True 
 B)False

Question 3

Trey Morgan is an employee who is paid monthly. For the month of January of the current year, he earned a total of $4,538. The FICA tax 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 for both the employee and the employer. The amount of federal income tax withheld from his earnings was $680.70. 
-His net pay for the month is:

Accepted Answer

A)  $3,162.98 
B)  $4,190.84 
C)  $3,857.30 
D)  $3,510.14 
E)  $4,538.00 
A)  $3,162.98 
B)  $4,190.84 
C)  $3,857.30 
D)  $3,510.14 
E)  $4,538.00

Question 4

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

Accepted Answer

contingent

Question 5

The Federal Insurance Contributions Act (FICA) requires that each employer file a:

Accepted Answer

A)  W-2. 
B)  Form 1040. 
C)  W-4. 
D)  Form 941. 
E)  Form 1099. 
A)  W-2. 
B)  Form 1040. 
C)  W-4. 
D)  Form 941. 
E)  Form 1099.

Question 6

An employee earned $4,600 in February working for an employer. Cumulative earnings of the previous pay periods are $4,800. The FICA tax rate for Social Security is 6.2% of the first $118,500 of earnings 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 the employer should record as payroll taxes expense for the month of February?

Accepted Answer

A)  $351.90 
B)  $483.90 
C)  $581.90 
D)  $230.00 
E)  $110.00 
A)  $351.90 
B)  $483.90 
C)  $581.90 
D)  $230.00 
E)  $110.00

Question 7

A payroll register does not include:

Accepted Answer

A)  Hours worked. 
B)  Deductions. 
C)  Pay period dates. 
D)  Prior year's earnings 
E)  Gross pay and net pay. 
A)  Hours worked. 
B)  Deductions. 
C)  Pay period dates. 
D)  Prior year's earnings 
E)  Gross pay and net pay.

Question 8

Accounting for contingent liabilities covers three possibilities: (1) The future event is probable and the amount cannot be reasonably estimated; (2) The future event is remote or unlikely to recur; (3) The likelihood of the liability to occur is impossible.

Accepted Answer

A) True 
 B)False

Question 9

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.

Accepted Answer

short-term

Question 10

If the times interest earned ratio:

Accepted Answer

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

Question 11

The difference between the amount borrowed and the amount repaid is referred to as ________.

Accepted Answer

The answer of The difference between the amount borrowed and...

Question 12

Accounts payable are:

Accepted Answer

A)  Amounts owed to suppliers for products and/or services purchased on credit. 
B)  Always payable within 30 days. 
C)  Long-term liabilities. 
D)  Estimated liabilities. 
E)  Not usually due on specific dates. 
A)  Amounts owed to suppliers for products and/or services purchased on credit. 
B)  Always payable within 30 days. 
C)  Long-term liabilities. 
D)  Estimated liabilities. 
E)  Not usually due on specific dates.

Question 13

The total compensation an employee earns including wages, salaries, commissions, bonuses, and any compensation earned before deductions such as taxes is called ________.

Accepted Answer

The answer of The total compensation an employee earns including...

Question 14

Portia Grant is an employee who is paid monthly. For the month of January of the current year, she earned a total of $8,260. The FICA tax for social security is 6.2% of the first $118,500 of employee earnings each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The FUTA tax rate of .6% and the SUTA tax rate of 5.4% are applied to the first $7,000 of an employee's pay. The amount of federal income tax withheld from her earnings was $1,325.17. Her net pay for the month is: (Round your intermediate calculations to two decimal places.)

Accepted Answer

A)  $6,422.71 
B)  $5,868.94 
C)  $6,246.94 
D)  $6,302.94 
E)  $7,194.11 
A)  $6,422.71 
B)  $5,868.94 
C)  $6,246.94 
D)  $6,302.94 
E)  $7,194.11

Question 15

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

Accepted Answer

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

Question 16

Obligations to be paid within one year or the company's operating cycle, whichever is longer, are:

Accepted Answer

A)  Current assets. 
B)  Bills. 
C)  Earned revenues. 
D)  Operating cycle liabilities. 
E)  Current liabilities. 
A)  Current assets. 
B)  Bills. 
C)  Earned revenues. 
D)  Operating cycle liabilities. 
E)  Current liabilities.

Question 17

The amount of federal income taxes withheld from an employee's paycheck is determined by:

Accepted Answer

A)  The amount of social security taxes withheld. 
B)  Multiplying the gross pay by 6.2%. 
C)  Tax tables provided by the state in which the employee works. 
D)  The employer's merit rating. 
E)  Current earnings for the pay period and number of withholding allowances the employee claims. 
A)  The amount of social security taxes withheld. 
B)  Multiplying the gross pay by 6.2%. 
C)  Tax tables provided by the state in which the employee works. 
D)  The employer's merit rating. 
E)  Current earnings for the pay period and number of withholding allowances the employee claims.

Question 18

A corporation has a $40,000 credit balance in the Income Tax Payable account. Period end information shows that the actual liability is $47,000. The company should record an entry to debit Income Tax Expense for $7,000 and credit Income Taxes Payable for $7,000.

Accepted Answer

A) True 
 B)False

Question 19

Employee vacation benefits:

Accepted Answer

A)  Increase net income. 
B)  Are recorded as an expense when the employee retires. 
C)  Are estimated liabilities. 
D)  Are contingent liabilities. 
E)  Are recorded as an expense when the employee takes a vacation. 
A)  Increase net income. 
B)  Are recorded as an expense when the employee retires. 
C)  Are estimated liabilities. 
D)  Are contingent liabilities. 
E)  Are recorded as an expense when the employee takes a vacation.

Question 20

On November 1, Casey's Snowboards signed a $12,000, 90-day, 5% note payable to cover a past due account payable.
a. What amount of interest expense on this note should Casey's Snowboards report on year-end December 31?
b. Prepare Casey's journal entry to record the issuance of the note payable.
c. Prepare Casey's adjusting journal entry at the end of the year
d. Prepare Casey's journal entry to record the payment of the note on February 1 of the following year.

Accepted Answer

None

Exam 11: Current Liabilities and Payroll Accounting

FUTA taxes are:

Accrued vacation benefits are a form of estimated liability for an employer.

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

The Federal Insurance Contributions Act (FICA) requires that each employer file a:

A payroll register does not include:

Accounting for contingent liabilities covers three possibilities: (1) The future event is probable and the amount cannot be reasonably estimated; (2) The future event is remote or unlikely to recur; (3) The likelihood of the liability to occur is impossible.

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.

If the times interest earned ratio:

The difference between the amount borrowed and the amount repaid is referred to as ________.

Accounts payable are:

The total compensation an employee earns including wages, salaries, commissions, bonuses, and any compensation earned before deductions such as taxes is called ________.

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

Obligations to be paid within one year or the company's operating cycle, whichever is longer, are:

The amount of federal income taxes withheld from an employee's paycheck is determined by:

A corporation has a $40,000 credit balance in the Income Tax Payable account. Period end information shows that the actual liability is $47,000. The company should record an entry to debit Income Tax Expense for $7,000 and credit Income Taxes Payable for $7,000.

Employee vacation benefits:

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