Question 1

Which is NOT an example of long-term debt?

Accepted Answer

A) notes payable 
B) accounts payable 
C) bonds payable 
D) All of the above are examples of long-term debt. 
A) notes payable 
B) accounts payable 
C) bonds payable 
D) All of the above are examples of long-term debt.

Question 2

On December 31st,Goliath Corporation has cost of goods sold of $114,000,ending inventory is $15,000,beginning inventory is $18,000;and average accounts payable is $25,000.
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.($114,000 + $15,00

Question 3

Nationwide Magazine sells 64,000 subscriptions on account in March.The subscription price is $15 each.The subscriptions start in April.The journal entry in March would include a:

Accepted Answer

A) debit to Unearned Subscription Revenue for $960,000. 
B) debit to prepaid subscriptions for $960,000. 
C) credit to Cash for $960,000. 
D) credit to Unearned Subscription Revenue for $960,000. 
A) debit to Unearned Subscription Revenue for $960,000. 
B) debit to prepaid subscriptions for $960,000. 
C) credit to Cash for $960,000. 
D) credit to Unearned Subscription Revenue for $960,000.

Question 4

When calculating accounts payable turnover,if there is not a material difference between the company's beginning inventory and ending inventory,then:

Accepted Answer

A) an adjustment still must be made for the difference to reduce or increase purchases. 
B) it should just be noted in the footnotes. 
C) it is not necessary to adjust for the inventory. 
D) an adjustment still must be made for the difference to reduce cost of goods sold. 
A) an adjustment still must be made for the difference to reduce or increase purchases. 
B) it should just be noted in the footnotes. 
C) it is not necessary to adjust for the inventory. 
D) an adjustment still must be made for the difference to reduce cost of goods sold.

Question 5

At December 31,2018,Lansing Company's general ledger shows the following balances after posting adjusting entries:
   Additional information:
1.$50,000 of the 8% note due December 31,2021 is due on December 31,2019.
2.The Estimated Warranty Liability relates to a multiple year product warranty.One-half of the liability will be honored in 2019,and one-half in 2020.
3.The Unearned Service Revenue pertains to a service contract to be performed in 2020.
Required:
Prepare the liability section of Lansing Company's balance sheet at December 31,2018.

Accepted Answer

The answer of At December 31,2018,Lansing Company's general ledger shows...

Question 6

The principle of representational faithfulness requires that companies:

Accepted Answer

A) disclose their financial positions and operational results. 
B) when in doubt,disclose a contingent liability. 
C) ignore contingent liabilities. 
D) A and B. 
A) disclose their financial positions and operational results. 
B) when in doubt,disclose a contingent liability. 
C) ignore contingent liabilities. 
D) A and B.

Question 7

Employee compensation is the major expense for most service companies.

Accepted Answer

A) True 
 B)False

Question 8

Wisconsin Bank lends Local Furniture Company $110,000 on November 1.Local Furniture Company signs a $110,000,6%,4-month note.The fiscal year end of Local Furniture Company is December 31.The journal entry made by Local Furniture Company on December 31 is:

Accepted Answer

A) debit Interest Expense and credit Interest Payable for $1,100. 
B) debit Interest Payable and credit Interest Expense for $1,100. 
C) debit Interest Expense and credit Cash for $1,100. 
D) debit Interest Payable and credit Cash for $1,100. 
A) debit Interest Expense and credit Interest Payable for $1,100. 
B) debit Interest Payable and credit Interest Expense for $1,100. 
C) debit Interest Expense and credit Cash for $1,100. 
D) debit Interest Payable and credit Cash for $1,100.

Question 9

All of the following are reported as current liabilities EXCEPT:

Accepted Answer

A) unearned revenues for services to be provided in 16 months. 
B) payroll tax payable. 
C) accounts payable. 
D) notes payable due in 6 months. 
A) unearned revenues for services to be provided in 16 months. 
B) payroll tax payable. 
C) accounts payable. 
D) notes payable due in 6 months.

Question 10

Large companies,like Amazon,typically purchase all of their inventory through accounts payable.

Accepted Answer

A) True 
 B)False

Question 11

According to FASB,when should a company journalize a contingent liability?

Accepted Answer

A) Journalize the contingent liability,even though you will probably win the lawsuit. 
B) Journalize the contingent liability only if the amount can be estimated and the probability of loss is reasonably possible. 
C) Journalize the contingent liability if it is probable that the loss will occur,and the amount of the loss can be reasonably estimated. 
D) Do not journalize the contingent liability under any circumstances. 
A) Journalize the contingent liability,even though you will probably win the lawsuit. 
B) Journalize the contingent liability only if the amount can be estimated and the probability of loss is reasonably possible. 
C) Journalize the contingent liability if it is probable that the loss will occur,and the amount of the loss can be reasonably estimated. 
D) Do not journalize the contingent liability under any circumstances.

Question 12

When a business receives cash from customers before earning the revenue,the ________ account is credited.

Accepted Answer

A) Accounts Receivable 
B) Sales Tax Payable 
C) Accounts Payable 
D) Unearned Revenue 
A) Accounts Receivable 
B) Sales Tax Payable 
C) Accounts Payable 
D) Unearned Revenue

Question 13

Sales taxes collected from customers are sent to the state at the end of each month.What journal entry is prepared?

Accepted Answer

A) debit Accounts Receivable and credit Sales 
B) debit Sales Tax Payable and credit Sales 
C) debit Accounts Payable and credit Cash 
D) debit Sales Taxes Payable and credit Cash 
A) debit Accounts Receivable and credit Sales 
B) debit Sales Tax Payable and credit Sales 
C) debit Accounts Payable and credit Cash 
D) debit Sales Taxes Payable and credit Cash

Question 14

A note is a written promise to pay a certain amount of money at a given date in the future along with interest.

Accepted Answer

A) True 
 B)False

Question 15

Payroll is also called employee compensation.

Accepted Answer

A) True 
 B)False

Question 16

Unearned Service Revenue relating to services to be provided in one month,is reported on the balance sheet as:

Accepted Answer

A) a revenue account. 
B) a current liability. 
C) a component of stockholders' equity. 
D) a long-term liability. 
A) a revenue account. 
B) a current liability. 
C) a component of stockholders' equity. 
D) a long-term liability.

Question 17

The journal entry to record accrued interest on a short-term note payable includes a debit to:

Accepted Answer

A) Interest Payable and a credit to Cash. 
B) Interest Expense and a credit to Cash. 
C) Interest Expense and a credit to Interest Payable. 
D) Interest Payable and a credit to Notes Payable. 
A) Interest Payable and a credit to Cash. 
B) Interest Expense and a credit to Cash. 
C) Interest Expense and a credit to Interest Payable. 
D) Interest Payable and a credit to Notes Payable.

Question 18

The accounting principle that requires a company to record warranty expense in the same period that it records sales revenue is the:

Accepted Answer

A) going concern principle. 
B) expense recognition principle. 
C) conservatism principle. 
D) consistency principle. 
A) going concern principle. 
B) expense recognition principle. 
C) conservatism principle. 
D) consistency principle.

Question 19

Madison Bank lends Neenah Paper Company $120,000 on January 1,2017.Neenah signs a $120,000,10%,6-month note.The journal entry made by Neenah on January 1,2017 will debit:

Accepted Answer

A) Cash for $108,000 and credit Note Payable for $108,000. 
B) Interest Expense for $12,000 and credit Cash for $12,000. 
C) Cash for $120,000 and credit Notes Payable for $120,000. 
D) Interest Expense for $12,000 and credit Interest Payable for $12,000. 
A) Cash for $108,000 and credit Note Payable for $108,000. 
B) Interest Expense for $12,000 and credit Cash for $12,000. 
C) Cash for $120,000 and credit Notes Payable for $120,000. 
D) Interest Expense for $12,000 and credit Interest Payable for $12,000.

Question 20

At January 1,2019,the Accrued Warranty Payable is $1,000.During 2019,the company recorded Warranty Expense of $19,100.During 2019,the company replaced defective products in accordance with product warranties at a cost of $12,400.What is the Accrued Warranty Payable at December 31,2019?

Accepted Answer

A) $6,700 
B) $7,700 
C) $20,100 
D) $19,100 
A) $6,700 
B) $7,700 
C) $20,100 
D) $19,100

Which is NOT an example of long-term debt?

Nationwide Magazine sells 64,000 subscriptions on account in March.The subscription price is $15 each.The subscriptions start in April.The journal entry in March would include a:

When calculating accounts payable turnover,if there is not a material difference between the company's beginning inventory and ending inventory,then:

The principle of representational faithfulness requires that companies:

Employee compensation is the major expense for most service companies.

Wisconsin Bank lends Local Furniture Company $110,000 on November 1.Local Furniture Company signs a $110,000,6%,4-month note.The fiscal year end of Local Furniture Company is December 31.The journal entry made by Local Furniture Company on December 31 is:

All of the following are reported as current liabilities EXCEPT:

Large companies,like Amazon,typically purchase all of their inventory through accounts payable.

According to FASB,when should a company journalize a contingent liability?

When a business receives cash from customers before earning the revenue,the ________ account is credited.

Sales taxes collected from customers are sent to the state at the end of each month.What journal entry is prepared?

A note is a written promise to pay a certain amount of money at a given date in the future along with interest.

Payroll is also called employee compensation.

Unearned Service Revenue relating to services to be provided in one month,is reported on the balance sheet as:

The journal entry to record accrued interest on a short-term note payable includes a debit to:

The accounting principle that requires a company to record warranty expense in the same period that it records sales revenue is the:

Madison Bank lends Neenah Paper Company $120,000 on January 1,2017.Neenah signs a $120,000,10%,6-month note.The journal entry made by Neenah on January 1,2017 will debit:

At January 1,2019,the Accrued Warranty Payable is $1,000.During 2019,the company recorded Warranty Expense of $19,100.During 2019,the company replaced defective products in accordance with product warranties at a cost of $12,400.What is the Accrued Warranty Payable at December 31,2019?

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

Which is NOT an example of long-term debt?

Nationwide Magazine sells 64,000 subscriptions on account in March.The subscription price is $15 each.The subscriptions start in April.The journal entry in March would include a:

When calculating accounts payable turnover,if there is not a material difference between the company's beginning inventory and ending inventory,then:

The principle of representational faithfulness requires that companies:

Employee compensation is the major expense for most service companies.

Wisconsin Bank lends Local Furniture Company $110,000 on November 1.Local Furniture Company signs a $110,000,6%,4-month note.The fiscal year end of Local Furniture Company is December 31.The journal entry made by Local Furniture Company on December 31 is:

All of the following are reported as current liabilities EXCEPT:

Large companies,like Amazon,typically purchase all of their inventory through accounts payable.

According to FASB,when should a company journalize a contingent liability?

When a business receives cash from customers before earning the revenue,the ________ account is credited.

Sales taxes collected from customers are sent to the state at the end of each month.What journal entry is prepared?

A note is a written promise to pay a certain amount of money at a given date in the future along with interest.

Payroll is also called employee compensation.

Unearned Service Revenue relating to services to be provided in one month,is reported on the balance sheet as:

The journal entry to record accrued interest on a short-term note payable includes a debit to:

The accounting principle that requires a company to record warranty expense in the same period that it records sales revenue is the:

Madison Bank lends Neenah Paper Company $120,000 on January 1,2017.Neenah signs a $120,000,10%,6-month note.The journal entry made by Neenah on January 1,2017 will debit:

At January 1,2019,the Accrued Warranty Payable is $1,000.During 2019,the company recorded Warranty Expense of $19,100.During 2019,the company replaced defective products in accordance with product warranties at a cost of $12,400.What is the Accrued Warranty Payable at December 31,2019?

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