Question 1

A bonus is an amount over and above regular compensation.

Accepted Answer

A) True 
 B)False

Question 2

Employers must match employee contributions (up to a maximum amount)for:

Accepted Answer

A) social security. 
B) income tax. 
C) medicare. 
D) A and C. 
A) social security. 
B) income tax. 
C) medicare. 
D) A and C.

Question 3

Some accrued liabilities,such as sales taxes and commissions,are incurred at the point of sale and must be recognized in the same period as those sales are made.

Accepted Answer

A) True 
 B)False

Question 4

A typical credit period for payment is:

Accepted Answer

A) 10 days. 
B) 15 days. 
C) 30 days. 
D) 45 days. 
A) 10 days. 
B) 15 days. 
C) 30 days. 
D) 45 days.

Question 5

Aisha Company paid $1,500 cash to replace a wheel on equipment sold under a two-year warranty in the prior year.The entry to record the payment will debit:

Accepted Answer

A) Warranty Expense and credit Cash. 
B) Repair Expense and credit Cash. 
C) Estimated Warranty Payable and credit Cash. 
D) Operating Expense and credit Cash. 
A) Warranty Expense and credit Cash. 
B) Repair Expense and credit Cash. 
C) Estimated Warranty Payable and credit Cash. 
D) Operating Expense and credit Cash.

Question 6

The accounts payable turnover expressed in days is 365 divided by:

Accepted Answer

A) accounts payable turnover. 
B) beginning accounts payable. 
C) ending accounts payable. 
D) average accounts payable. 
A) accounts payable turnover. 
B) beginning accounts payable. 
C) ending accounts payable. 
D) average accounts payable.

Question 7

Companies with longer payment periods are usually better credit risks than those with shorter payment periods.

Accepted Answer

A) True 
 B)False

Question 8

An example of a contingent liability may be a lawsuit.

Accepted Answer

A) True 
 B)False

Question 9

Long-term liabilities are mostly for:

Accepted Answer

A) operating activities 
B) financing activities. 
C) investing activities. 
D) both A and B. 
A) operating activities 
B) financing activities. 
C) investing activities. 
D) both A and B.

Question 10

Potential liabilities that depend on future events arising out of past events are called:

Accepted Answer

A) long-term liabilities. 
B) estimated liabilities. 
C) contingent liabilities. 
D) current liabilities. 
A) long-term liabilities. 
B) estimated liabilities. 
C) contingent liabilities. 
D) current liabilities.

Question 11

On July 1st,Smith Corporation purchased $10,000 of inventory using a short-term note payable due in one year at 10% interest.Smith Corporation's fiscal year ends on December 31.
Required:
1.Journalize the purchase of the inventory.Omit explanation.
2.Journalize the accrued interest expense on December 31st.Omit explanation.
3.Journalize the payment of the note payable the following year on June 30th.Omit explanation.
1.
   2.
   3.

Accepted Answer

Question 12

To accrue a contingent liability means to:

Accepted Answer

A) report it as a footnote only. 
B) disclose estimates of the liability. 
C) make an adjusting journal entry. 
D) do nothing. 
A) report it as a footnote only. 
B) disclose estimates of the liability. 
C) make an adjusting journal entry. 
D) do nothing.

Question 13

Current liabilities are expected to be paid within one year or the operating cycle,whichever is shorter.

Accepted Answer

A) True 
 B)False

Question 14

On April 1st,Jones Corporation purchased $15,000 of inventory using a short-term note payable due in one year at 8% interest.Jones Corporation's fiscal year ends on December 31.
Required:
1.Journalize the purchase of the inventory.Omit explanation.
2.Journalize the accrued interest expense on December 31st.Omit explanation.
3.Journalize the payment of the note payable the following year on March 31st.Omit explanation.
1.
   2.
   3.

Accepted Answer

Question 15

If the accounts payable turnover is 7.9,what is the days' payable outstanding? (Round your answer to the nearest day. )

Accepted Answer

A) 46 days 
B) 16 days 
C) 56 days 
D) 33 days 
A) 46 days 
B) 16 days 
C) 56 days 
D) 33 days

Question 16

The current portion of a long-term note payable refers to the amount of interest on a note payable that must be paid in the current year.

Accepted Answer

A) True 
 B)False

Question 17

Contingent liabilities can never be long term.

Accepted Answer

A) True 
 B)False

Question 18

When calculating accounts payable turnover,if there is not a material difference between the company's beginning inventory and ending inventory,then the accounts payable turnover will be ________ whether purchases or cost of goods sold are used.

Accepted Answer

A) similar 
B) unavailable 
C) drastically different 
D) noncomparable 
A) similar 
B) unavailable 
C) drastically different 
D) noncomparable

Question 19

On December 31st,Smith Corporation has cost of goods sold of $124,000,ending inventory is $25,000,beginning inventory is $28,000;and average accounts payable is $15,000.
Required:
1.What is the accounts payable turnover (take all answers to two decimal places)?
2.What is the accounts payable turnover in days (take to the nearest day)?

Accepted Answer

1.($124,000 + $25,00

Question 20

If Cost of Goods Sold is $240,000,beginning inventory is $57,000,and ending inventory is $40,000,then the purchases from suppliers (assume all on account)would be:

Accepted Answer

A) $337,000. 
B) $257,000. 
C) $223,000. 
D) $240,000. 
A) $337,000. 
B) $257,000. 
C) $223,000. 
D) $240,000.

A bonus is an amount over and above regular compensation.

Employers must match employee contributions (up to a maximum amount)for:

Some accrued liabilities,such as sales taxes and commissions,are incurred at the point of sale and must be recognized in the same period as those sales are made.

A typical credit period for payment is:

Aisha Company paid $1,500 cash to replace a wheel on equipment sold under a two-year warranty in the prior year.The entry to record the payment will debit:

The accounts payable turnover expressed in days is 365 divided by:

Companies with longer payment periods are usually better credit risks than those with shorter payment periods.

An example of a contingent liability may be a lawsuit.

Long-term liabilities are mostly for:

Potential liabilities that depend on future events arising out of past events are called:

To accrue a contingent liability means to:

Current liabilities are expected to be paid within one year or the operating cycle,whichever is shorter.

If the accounts payable turnover is 7.9,what is the days' payable outstanding? (Round your answer to the nearest day. )

The current portion of a long-term note payable refers to the amount of interest on a note payable that must be paid in the current year.

Contingent liabilities can never be long term.

When calculating accounts payable turnover,if there is not a material difference between the company's beginning inventory and ending inventory,then the accounts payable turnover will be ________ whether purchases or cost of goods sold are used.

If Cost of Goods Sold is $240,000,beginning inventory is $57,000,and ending inventory is $40,000,then the purchases from suppliers (assume all on account)would be:

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Internal Control Cash

Receivables and Revenue

Inventory Cost of Goods Sold

Plant Assets, natural Resources, Intangibles

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters

Exam 8: Current and Contingent Liabilities

A bonus is an amount over and above regular compensation.

Employers must match employee contributions (up to a maximum amount)for:

Some accrued liabilities,such as sales taxes and commissions,are incurred at the point of sale and must be recognized in the same period as those sales are made.

A typical credit period for payment is:

Aisha Company paid $1,500 cash to replace a wheel on equipment sold under a two-year warranty in the prior year.The entry to record the payment will debit:

The accounts payable turnover expressed in days is 365 divided by:

Companies with longer payment periods are usually better credit risks than those with shorter payment periods.

An example of a contingent liability may be a lawsuit.

Long-term liabilities are mostly for:

Potential liabilities that depend on future events arising out of past events are called:

To accrue a contingent liability means to:

Current liabilities are expected to be paid within one year or the operating cycle,whichever is shorter.

If the accounts payable turnover is 7.9,what is the days' payable outstanding? (Round your answer to the nearest day. )

The current portion of a long-term note payable refers to the amount of interest on a note payable that must be paid in the current year.

Contingent liabilities can never be long term.

When calculating accounts payable turnover,if there is not a material difference between the company's beginning inventory and ending inventory,then the accounts payable turnover will be ________ whether purchases or cost of goods sold are used.

If Cost of Goods Sold is $240,000,beginning inventory is $57,000,and ending inventory is $40,000,then the purchases from suppliers (assume all on account)would be:

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Internal Control Cash

Receivables and Revenue

Inventory Cost of Goods Sold

Plant Assets, natural Resources, Intangibles

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Investments

Time Value of Money

Filters