Question 1

Amounts owed for products or services purchased on account are called ________.

Accepted Answer

A) accounts payable 
B) unearned revenue 
C) accrued expense 
D) warranty payable 
A) accounts payable 
B) unearned revenue 
C) accrued expense 
D) warranty payable

Question 2

Synergy Appliances sells dishwashers with a four-year warranty.In 2017,sales revenue for dishwashers is $97,000.The company estimates warranty expense at 4.5% of revenues.What is the total estimated warranty payable of Synergy Appliances in 2017? (Round your final answer to the nearest dollar. )

Accepted Answer

A) $4,365 
B) $1,091 
C) $1,598 
D) $3,424 
A) $4,365 
B) $1,091 
C) $1,598 
D) $3,424

Question 3

Ragas,Inc.sold goods with a selling price of $62,000 in the 2017 and estimated 4% warranty expense for the year.Customers complained of defects,and goods with a cost of $3,500 had to be replaced.Which of the following is the correct journal entry for honoring the warranties with goods?

Accepted Answer

A) 
  
B) 
  
C) 
  
D) 
  
A) 
  
B) 
  
C) 
  
D)

Question 4

If a contingency that is probable can be reasonably estimated,a liability is recorded and an expense is accrued.

Accepted Answer

A) True 
 B)False

Question 5

If the likelihood of a future event is remote,how should the company report the contingency?

Accepted Answer

No disclos

Question 6

Estimated Warranty Payable is included in the liability section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 7

Statewide Sales,Inc.has gross pay for March of $45,000.Which of the following is included in the journal entry to record salaries expense?

Accepted Answer

A) credit Salaries and Wages Expense 
B) debit Cash 
C) debit Salaries and Wages Payable 
D) debit Salaries and Wages Expense 
A) credit Salaries and Wages Expense 
B) debit Cash 
C) debit Salaries and Wages Payable 
D) debit Salaries and Wages Expense

Question 8

Doug,an employee of Cayman Travels,Inc. ,has gross salary for March of $4,000.The entire amount is under the OASDI limit of $117,000,and thus subject to FICA.His year-to-date pay has already exceeded the $7,000 cap for FUTA and SUTA.Provide the journal entry to record the employer's payroll taxes.(Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%. )

Accepted Answer

The answer of Doug,an employee of Cayman Travels,Inc. ,has gross...

Question 9

Aaron earns $18.50 per hour with time-and-a-half for hours in excess of 40 per week.He worked 45 hours at his job during the first week of March 2017.Aaron pays income taxes at 15% and 7.65% for OASDI and Medicare.All of his income is taxable under FICA.Determine Aaron's net pay for the week.(Do not round any intermediate calculations,and round your final answer to the nearest cent. )

Accepted Answer

A) $746.94 
B) $679.71 
C) $579.84 
D) $616.51 
A) $746.94 
B) $679.71 
C) $579.84 
D) $616.51

Question 10

Mayfield,Inc.withholds $720 from Stephen's paycheck for federal income tax.This amount is part of the company's payroll tax expense.

Accepted Answer

A) True 
 B)False

Question 11

Angela's gross pay for the week is $970.00.Her deduction for federal income tax is based on a rate of 24%.She has voluntary deductions of $175.00.Her yearly pay is under the limit for OASDI.What is the amount of FICA-Medicare Tax deducted from her pay? (Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%.Do not round any intermediate calculations,and round your final answer to the nearest cent. )

Accepted Answer

A) $232.80 
B) $14.07 
C) $60.14 
D) $307.01 
A) $232.80 
B) $14.07 
C) $60.14 
D) $307.01

Question 12

Timothy's gross pay for this month is $8,950.His gross year-to-date pay,prior to this month,totaled $110,500.What is the amount of FICA tax withheld from Timothy's pay for this month? (Assume an OASDI rate of 6.2%,applicable on the first $117,000 earnings,and a Medicare rate of 1.45%,applicable on all earnings.Do not round any intermediate calculations,and round your final answer to the nearest cent. )

Accepted Answer

A) $403.00 
B) $129.78 
C) $532.78 
D) $554.90 
A) $403.00 
B) $129.78 
C) $532.78 
D) $554.90

Question 13

NewAge,Inc.made total cash sales in February of $666,000,which are subject to 7.5% sales tax.Prepare the summary entry to record the transaction.

Accepted Answer

The answer of NewAge,Inc.made total cash sales in February of...

Question 14

________ is pay stated as a percentage of a sale amount.

Accepted Answer

A) Salary 
B) Wage 
C) Commission 
D) Bonus 
A) Salary 
B) Wage 
C) Commission 
D) Bonus

Question 15

Saran Digital,Inc.starts the year with $3,500 in its Estimated Warranty Payable account.During the year,there were $226,000 in sales and $5,000 in warranty repair payments.Saran Digital estimates warranty expense at 4% of sales.The Warranty Expense for the year is ________.

Accepted Answer

A) $9,040 
B) $5,000 
C) $3,500 
D) $7,540 
A) $9,040 
B) $5,000 
C) $3,500 
D) $7,540

Question 16

Unearned revenue,for services to be performed in six months,appears on the balance sheet as ________.

Accepted Answer

A) long-term investments 
B) current liabilities 
C) current assets 
D) long-term assets 
A) long-term investments 
B) current liabilities 
C) current assets 
D) long-term assets

Question 17

David,an employee of Cecil,Inc. ,has gross salary for March of $5,600.The entire amount is under the OASDI limit of $117,000,and thus subject to FICA.He is also subject to federal income tax at a rate of 30%.His year-to-date pay has already exceeded the $7,000 cap for FUTA and SUTA.The journal entry to record the employer's payroll tax expense includes a credit to FICA-OASDI Taxes Payable for $347.20.(Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%. )

Accepted Answer

A) True 
 B)False

Question 18

The times-interest-earned ratio is calculated as ________.

Accepted Answer

A) earnings before interest and tax divided by interest expense 
B) profit before tax divided by interest expense 
C) net income divided by interest expense 
D) income tax expense plus interest expense divided by interest expense 
A) earnings before interest and tax divided by interest expense 
B) profit before tax divided by interest expense 
C) net income divided by interest expense 
D) income tax expense plus interest expense divided by interest expense

Question 19

When a business records accrued interest expense on a note payable ________.

Accepted Answer

A) Interest Expense is credited 
B) Note Payable is credited 
C) Cash is debited 
D) Interest Payable is credited 
A) Interest Expense is credited 
B) Note Payable is credited 
C) Cash is debited 
D) Interest Payable is credited

Question 20

A $45,000,two-month,7% note payable was issued on December 1,2016.What is the amount of interest expense recorded in the year 2017?

Accepted Answer

A) $3,150 
B) $263 
C) $525 
D) $45,525 
A) $3,150 
B) $263 
C) $525 
D) $45,525

Exam 11: Current Liabilities and Payroll

Amounts owed for products or services purchased on account are called ________.

Synergy Appliances sells dishwashers with a four-year warranty.In 2017,sales revenue for dishwashers is $97,000.The company estimates warranty expense at 4.5% of revenues.What is the total estimated warranty payable of Synergy Appliances in 2017? (Round your final answer to the nearest dollar. )

Ragas,Inc.sold goods with a selling price of $62,000 in the 2017 and estimated 4% warranty expense for the year.Customers complained of defects,and goods with a cost of $3,500 had to be replaced.Which of the following is the correct journal entry for honoring the warranties with goods?

If a contingency that is probable can be reasonably estimated,a liability is recorded and an expense is accrued.

If the likelihood of a future event is remote,how should the company report the contingency?

Estimated Warranty Payable is included in the liability section of the balance sheet.

Statewide Sales,Inc.has gross pay for March of $45,000.Which of the following is included in the journal entry to record salaries expense?

Mayfield,Inc.withholds $720 from Stephen's paycheck for federal income tax.This amount is part of the company's payroll tax expense.

NewAge,Inc.made total cash sales in February of $666,000,which are subject to 7.5% sales tax.Prepare the summary entry to record the transaction.

________ is pay stated as a percentage of a sale amount.

Saran Digital,Inc.starts the year with $3,500 in its Estimated Warranty Payable account.During the year,there were $226,000 in sales and $5,000 in warranty repair payments.Saran Digital estimates warranty expense at 4% of sales.The Warranty Expense for the year is ________.

Unearned revenue,for services to be performed in six months,appears on the balance sheet as ________.

The times-interest-earned ratio is calculated as ________.

When a business records accrued interest expense on a note payable ________.

A $45,000,two-month,7% note payable was issued on December 1,2016.What is the amount of interest expense recorded in the year 2017?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets, natural Resources, and Intangibles

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

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