Question 1

Which of the following would most likely be classified as a current liability?

Accepted Answer

A)  Two-year Notes Payable 
B)  Bonds Payable 
C)  Mortgage Payable 
D)  Unearned Rent 
A)  Two-year Notes Payable 
B)  Bonds Payable 
C)  Mortgage Payable 
D)  Unearned Rent

Question 2

A current liability is a debt that is reasonably expected to be paid

Accepted Answer

A)  between 6 months and 18 months. 
B)  out of currently recognized revenues. 
C)  within one year. 
D)  out of cash currently on hand. 
A)  between 6 months and 18 months. 
B)  out of currently recognized revenues. 
C)  within one year. 
D)  out of cash currently on hand.

Question 3

The amount of federal income taxes withheld from an employee's gross pay is recorded as a(n)

Accepted Answer

A)  payroll expense 
B)  contra account 
C)  asset 
D)  liability 
A)  payroll expense 
B)  contra account 
C)  asset 
D)  liability

Question 4

An aid in internal control over payrolls that indicates employee attendance is

Accepted Answer

A)  time card 
B)  voucher system 
C)  payroll register 
D)  employee's earnings record 
A)  time card 
B)  voucher system 
C)  payroll register 
D)  employee's earnings record

Question 5

The accounting for defined benefit plans is usually very easy and straight forward.

Accepted Answer

A) True 
 B)False

Question 6

Use the following information to answer the following questions. Assuming no employees are subject to ceilings for their earnings, Jensen Company has the following information for the pay period of January 15 - 31, 20xx.
  Salaries Payable would be recorded in the amount of:

Accepted Answer

A)  $8,200 
B)  $6,830 
C)  $8,630 
D)  $7,450 
A)  $8,200 
B)  $6,830 
C)  $8,630 
D)  $7,450

Question 7

The borrower is the one who issues a note payable to a creditor.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following taxes would be deducted in determining an employee's net pay?

Accepted Answer

A)  FUTA taxes 
B)  SUTA taxes 
C)  FICA taxes 
D)  all of the above 
A)  FUTA taxes 
B)  SUTA taxes 
C)  FICA taxes 
D)  all of the above

Question 9

The journal entry a company uses to record the payment of an interest-bearing note is

Accepted Answer

A)  debit Cash; credit Notes Payable 
B)  debit Accounts Payable; credit Cash 
C)  debit Notes Payable and Interest Expense; credit Cash 
D)  debit Notes Payable and Interest Receivable; credit Cash 
A)  debit Cash; credit Notes Payable 
B)  debit Accounts Payable; credit Cash 
C)  debit Notes Payable and Interest Expense; credit Cash 
D)  debit Notes Payable and Interest Receivable; credit Cash

Question 10

An employee receives an hourly rate of $40, with time and a half for all hours worked in excess of 40 during a week. Payroll data for the current week are as follows: hours worked, 46; federal income tax withheld, $350; cumulative earnings for year prior to current week, $99,700; social security tax rate, 6.0% on maximum of $100,000; and Medicare tax rate, 1.5% on all earnings. What is the gross pay for the employee?

Accepted Answer

A)  $775.00 
B)  $1,840.00 
C)  $1,960.00 
D)  $1,562.60 
A)  $775.00 
B)  $1,840.00 
C)  $1,960.00 
D)  $1,562.60

Question 11

The payroll register of Seaside Architecture Company indicates $970 of Social Security and $257 of Medicare tax withheld on total salaries of $16,500 for the period. Federal withholding for the period totaled $4,235. Provide the journal entry for the period's payroll.

Accepted Answer

The answer of The payroll register of Seaside Architecture Company...

Question 12

Generally, all deductions made from an employee's gross pay are required by law.

Accepted Answer

A) True 
 B)False

Question 13

On October 1, Ramos Co. signed a $90,000, 60-day discounted note at the bank. The discount rate was 6%, and the note was paid on November 30. (Assume a 360-day year is used for interest calculations.)

Accepted Answer

The answer of On October 1, Ramos Co. signed a...

Question 14

On October 30, Seba Salon, Inc. issued a 90-day note with a face amount of $60,000 to Reyes Products, Inc. for merchandise inventory. Assuming a 360-day year, determine the proceeds of the note assuming the note is discounted at 8%.

Accepted Answer

A)  $55,200 
B)  $64,800 
C)  $58,800 
D)  $61,200 
A)  $55,200 
B)  $64,800 
C)  $58,800 
D)  $61,200

Question 15

Use the following information to answer the following questions. The following totals for the month of April were taken from the payroll register of Magnum Company.
  The entry to record accrual of employer's payroll taxes would include a

Accepted Answer

A)  debit to Payroll Tax Expense for $248 
B)  debit to FICA Taxes Payable for $1,800 
C)  credit to Payroll Tax Expense for $248 
D)  debit to Payroll Tax Expense for $1,148 
A)  debit to Payroll Tax Expense for $248 
B)  debit to FICA Taxes Payable for $1,800 
C)  credit to Payroll Tax Expense for $248 
D)  debit to Payroll Tax Expense for $1,148

Question 16

Federal unemployment taxes are paid by the employer and the employee.

Accepted Answer

A) True 
 B)False

Question 17

The journal entry a company uses to record the issuance of an interest-bearing note for the purpose of borrowing funds for the business is

Accepted Answer

A)  debit Accounts Payable; credit Notes Payable 
B)  debit Cash; credit Notes Payable 
C)  debit Notes Payable; credit Cash 
D)  debit Cash and Interest Expense; credit Notes Payable 
A)  debit Accounts Payable; credit Notes Payable 
B)  debit Cash; credit Notes Payable 
C)  debit Notes Payable; credit Cash 
D)  debit Cash and Interest Expense; credit Notes Payable

Question 18

The Crafter Company had the following assets and liabilities as of December 31, 2012:   Determine the quick ratio for the end of the year (rounded to one decimal point).

Accepted Answer

A)  6.7 
B)  13.0 
C)  4.2 
D)  3.5 
A)  6.7 
B)  13.0 
C)  4.2 
D)  3.5

Question 19

John Woods' weekly gross earnings for the present week were $2,500. Woods has two exemptions. Using $80 value for each exemption, what is Woods' federal income tax withholding?

Accepted Answer

The answer of John Woods' weekly gross earnings for the...

Question 20

Obligations that depend on past events and that are based on future possible events are contingent liabilities.

Accepted Answer

A) True 
 B)False

Exam 10: Current Liabilities and Payroll

Which of the following would most likely be classified as a current liability?

A current liability is a debt that is reasonably expected to be paid

The amount of federal income taxes withheld from an employee's gross pay is recorded as a(n)

An aid in internal control over payrolls that indicates employee attendance is

The accounting for defined benefit plans is usually very easy and straight forward.

Use the following information to answer the following questions. Assuming no employees are subject to ceilings for their earnings, Jensen Company has the following information for the pay period of January 15 - 31, 20xx. Salaries Payable would be recorded in the amount of:

The borrower is the one who issues a note payable to a creditor.

Which of the following taxes would be deducted in determining an employee's net pay?

The journal entry a company uses to record the payment of an interest-bearing note is

The payroll register of Seaside Architecture Company indicates $970 of Social Security and $257 of Medicare tax withheld on total salaries of $16,500 for the period. Federal withholding for the period totaled $4,235. Provide the journal entry for the period's payroll.

Generally, all deductions made from an employee's gross pay are required by law.

On October 1, Ramos Co. signed a $90,000, 60-day discounted note at the bank. The discount rate was 6%, and the note was paid on November 30. (Assume a 360-day year is used for interest calculations.)

On October 30, Seba Salon, Inc. issued a 90-day note with a face amount of $60,000 to Reyes Products, Inc. for merchandise inventory. Assuming a 360-day year, determine the proceeds of the note assuming the note is discounted at 8%.

Use the following information to answer the following questions. The following totals for the month of April were taken from the payroll register of Magnum Company. The entry to record accrual of employer's payroll taxes would include a

Federal unemployment taxes are paid by the employer and the employee.

The journal entry a company uses to record the issuance of an interest-bearing note for the purpose of borrowing funds for the business is

The Crafter Company had the following assets and liabilities as of December 31, 2012: Determine the quick ratio for the end of the year (rounded to one decimal point).

John Woods' weekly gross earnings for the present week were $2,500. Woods has two exemptions. Using $80 value for each exemption, what is Woods' federal income tax withholding?

Obligations that depend on past events and that are based on future possible events are contingent liabilities.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Cost Management for Just-In-Time Environments

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