Question 1

A loan in which the lender deducts interest from the amount borrowed before the money is advanced to the borrower is called an interest bearing note.

Accepted Answer

A) True 
 B)False

Question 2

Assuming a 360-day year, proceeds of $48,750 were received from discounting a $50,000, 90-day note at a bank. The discount rate used by the bank in computing the proceeds was

Accepted Answer

A)  6.25% 
B)  10.00% 
C)  10.26% 
D)  9.75% 
A)  6.25% 
B)  10.00% 
C)  10.26% 
D)  9.75%

Question 3

Federal unemployment compensation taxes that are collected by the federal government are paid directly to the unemployed but are allocated among the states for use in state programs.

Accepted Answer

A) True 
 B)False

Question 4

On June 8, Alton Co. issued an $80,000, 6%, 120-day note payable to Seller Co. Assume that the fiscal year of Seller Co. ends June 30. Using the 360-day year in your calculations, what is the amount of interest revenue recognized by Seller in the following year?

Accepted Answer

A)  $1,200.00 
B)  $1,208.89 
C)  $1,306.67 
D)  $1,600.00 
A)  $1,200.00 
B)  $1,208.89 
C)  $1,306.67 
D)  $1,600.00

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Form W-2 is called the Wage and Tax Statement.

Accepted Answer

A) True 
 B)False

Question 7

Current liabilities are:

Accepted Answer

A)  due and receivable within one year. 
B)  due and to be paid out of current assets within one year. 
C)  due, but not payable for more than one year. 
D)  payable if a possible subsequent event occurs. 
A)  due and receivable within one year. 
B)  due and to be paid out of current assets within one year. 
C)  due, but not payable for more than one year. 
D)  payable if a possible subsequent event occurs.

Question 8

Most employers are required to withhold federal unemployment taxes from employee earnings.

Accepted Answer

A) True 
 B)False

Question 9

The discount on a note payable is charged to an account that has a normal credit balance.

Accepted Answer

A) True 
 B)False

Question 10

On July 8, Alton Co. issued an $80,000, 6%, 120-day note payable to Seller Co. Assume that the fiscal year of Alton Co. ends July 31. Using the 360-day year in your calculations, what is the amount of interest expense recognized by Alton in the current fiscal year?

Accepted Answer

A)  $1,200.00 
B)  $106.67 
C)  $306.67 
D)  $400.00 
A)  $1,200.00 
B)  $106.67 
C)  $306.67 
D)  $400.00

Question 11

Quick assets include

Accepted Answer

A)  cash; cash equivalents, receivables, prepaid expenses, and inventory 
B)  cash; cash equivalents, receivables, and prepaid expenses 
C)  cash; cash equivalents, receivables, and inventory 
D)  cash; cash equivalents, and receivables 
A)  cash; cash equivalents, receivables, prepaid expenses, and inventory 
B)  cash; cash equivalents, receivables, and prepaid expenses 
C)  cash; cash equivalents, receivables, and inventory 
D)  cash; cash equivalents, and receivables

Question 12

Which of the following is required to be withheld from employee's gross pay?

Accepted Answer

A)  both federal and state unemployment compensation 
B)  only federal unemployment compensation tax 
C)  only federal income tax 
D)  only state unemployment compensation tax 
A)  both federal and state unemployment compensation 
B)  only federal unemployment compensation tax 
C)  only federal income tax 
D)  only state unemployment compensation tax

Question 13

Which of the following is not an internal control procedure for payroll?

Accepted Answer

A)  observe clocking in and out time for the employees 
B)  payroll depends on a fired employee's supervisor to notify them when an employee has been fired 
C)  payroll requires employees to show identification when picking up their paychecks 
D)  changes in pay rates on a computerized system must be tested by someone independent of payroll 
A)  observe clocking in and out time for the employees 
B)  payroll depends on a fired employee's supervisor to notify them when an employee has been fired 
C)  payroll requires employees to show identification when picking up their paychecks 
D)  changes in pay rates on a computerized system must be tested by someone independent of payroll

Question 14

The amount of money a borrower receives from the lender is called discount rate.

Accepted Answer

A) True 
 B)False

Question 15

The journal entry a company uses to record the estimated accrued product warranty liability is

Accepted Answer

A)  debit Product Warranty Expense; credit Product Warranty Payable 
B)  debit Product Warranty Payable; credit Cash 
C)  debit Product Warranty Expense; credit Cash 
D)  debit Product Warranty Payable; credit Product Warranty Expense 
A)  debit Product Warranty Expense; credit Product Warranty Payable 
B)  debit Product Warranty Payable; credit Cash 
C)  debit Product Warranty Expense; credit Cash 
D)  debit Product Warranty Payable; credit Product Warranty Expense

Question 16

Which of the following is the most desirable quick ratio?

Accepted Answer

A)  1.20 
B)  1.00 
C)  0.95 
D)  0.50 
A)  1.20 
B)  1.00 
C)  0.95 
D)  0.50

Question 17

Assuming no employees are subject to ceilings for their earnings, Moore Company has the following information for the pay period of December 15 - 31, 20xx.   Salaries Payable would be recorded for

Accepted Answer

A)  $16,000 
B)  $ 9,808 
C)  $10,800 
D)  $11,040 
A)  $16,000 
B)  $ 9,808 
C)  $10,800 
D)  $11,040

Question 18

A borrower has two alternatives for a loan: (a) issue a $480,000, 60-day, 8% note or (2) issue a $480,000, 60-day note that the creditor discounts at 8%. (Assume a 360-day year is used for interest calculations.)
Required:

Accepted Answer

The answer of A borrower has two alternatives for a...

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

On June 8, Alton Co. issued an $90,000, 6%, 120-day note payable to Seller Co. Assuming a 360-day year for your calculations, what is the maturity value of the note?

Accepted Answer

A)  $90,450 
B)  $90,000 
C)  $91,800 
D)  $95,400 
A)  $90,450 
B)  $90,000 
C)  $91,800 
D)  $95,400

Exam 11: Current Liabilities and Payroll

A loan in which the lender deducts interest from the amount borrowed before the money is advanced to the borrower is called an interest bearing note.

Assuming a 360-day year, proceeds of $48,750 were received from discounting a $50,000, 90-day note at a bank. The discount rate used by the bank in computing the proceeds was

Federal unemployment compensation taxes that are collected by the federal government are paid directly to the unemployed but are allocated among the states for use in state programs.

On June 8, Alton Co. issued an $80,000, 6%, 120-day note payable to Seller Co. Assume that the fiscal year of Seller Co. ends June 30. Using the 360-day year in your calculations, what is the amount of interest revenue recognized by Seller in the following year?

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

Form W-2 is called the Wage and Tax Statement.

Current liabilities are:

Most employers are required to withhold federal unemployment taxes from employee earnings.

The discount on a note payable is charged to an account that has a normal credit balance.

On July 8, Alton Co. issued an $80,000, 6%, 120-day note payable to Seller Co. Assume that the fiscal year of Alton Co. ends July 31. Using the 360-day year in your calculations, what is the amount of interest expense recognized by Alton in the current fiscal year?

Quick assets include

Which of the following is required to be withheld from employee's gross pay?

Which of the following is not an internal control procedure for payroll?

The amount of money a borrower receives from the lender is called discount rate.

The journal entry a company uses to record the estimated accrued product warranty liability is

Which of the following is the most desirable quick ratio?

Assuming no employees are subject to ceilings for their earnings, Moore Company has the following information for the pay period of December 15 - 31, 20xx. Salaries Payable would be recorded for

A borrower has two alternatives for a loan: (a) issue a $480,000, 60-day, 8% note or (2) issue a $480,000, 60-day note that the creditor discounts at 8%. (Assume a 360-day year is used for interest calculations.) Required:

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

On June 8, Alton Co. issued an $90,000, 6%, 120-day note payable to Seller Co. Assuming a 360-day year for your calculations, what is the maturity value of the note?

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Accounting for Partnerships and Limited Liability Companies

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

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

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