Question 1

Employer payroll taxes:

Accepted Answer

A)  Are an added expense beyond the wages and salaries earned by employees. 
B)  Represent the federal taxes withheld from employees. 
C)  Represent the social security taxes withheld from employees. 
D)  Are paid by the employee. 
E)  All of these. 
A)  Are an added expense beyond the wages and salaries earned by employees. 
B)  Represent the federal taxes withheld from employees. 
C)  Represent the social security taxes withheld from employees. 
D)  Are paid by the employee. 
E)  All of these.

Question 2

The times interest earned ratio is calculated by dividing income before interest expense and income taxes by interest expense.

Accepted Answer

A) True 
 B)False

Question 3

In the accounting records of a defendant, lawsuits:

Accepted Answer

A)  Are estimated liabilities. 
B)  Should always be recorded. 
C)  Should always be disclosed. 
D)  Should be recorded if payment for damages is probable and the amount can be reasonably estimated. 
E)  Should never be recorded. 
A)  Are estimated liabilities. 
B)  Should always be recorded. 
C)  Should always be disclosed. 
D)  Should be recorded if payment for damages is probable and the amount can be reasonably estimated. 
E)  Should never be recorded.

Question 4

Contingent liabilities can be:

Accepted Answer

A)  Probable. 
B)  Remote. 
C)  Reasonably possible. 
D)  Estimable. 
E)  All of these. 
A)  Probable. 
B)  Remote. 
C)  Reasonably possible. 
D)  Estimable. 
E)  All of these.

Question 5

The annual Federal Unemployment Tax Return is:

Accepted Answer

A)  Form 940. 
B)  Form 1099. 
C)  Form 104. 
D)  Form W-2. 
E)  Form W-4. 
A)  Form 940. 
B)  Form 1099. 
C)  Form 104. 
D)  Form W-2. 
E)  Form W-4.

Question 6

Debt guarantees:

Accepted Answer

A)  Are never disclosed in the financial statements. 
B)  Are considered to be a contingent liability. 
C)  Are a bad business practice. 
D)  Are recorded as a liability even though it is highly unlikely that the original debtor will default. 
E)  All of these. 
A)  Are never disclosed in the financial statements. 
B)  Are considered to be a contingent liability. 
C)  Are a bad business practice. 
D)  Are recorded as a liability even though it is highly unlikely that the original debtor will default. 
E)  All of these.

Question 7

Contingent liabilities are recorded in the accounts if the future event is _______________ and the amount owed can be _____________.

Accepted Answer

Probable;

Question 8

Explain the responsibilities of and the accounting by employers for employee payroll deductions.

Accepted Answer

Employers are responsible for collecting

Question 9

Pastimes Co. offers its employees a bonus equal to 2% of the company's net income. The estimated net income for the year is expected to be $850,000. Prepare the general journal entry to record the employee bonus plan expense.

Accepted Answer

The answer of Pastimes Co. offers its employees a bonus...

Question 10

The tax rate for FICA-social security is 6.2% and the tax rate for FICA-Medicare is 1.45%. Calculate the total amount of FICA withholding for an employee whose pay is $2,400 and is entirely subject to these FICA taxes.

Accepted Answer

The answer of The tax rate for FICA-social security is...

Question 11

Fixed expenses:

Accepted Answer

A)  Create risk. 
B)  Can be an advantage when a company is growing. 
C)  Include interest expense. 
D)  Do not fluctuate with changes in sales. 
E)  All of these. 
A)  Create risk. 
B)  Can be an advantage when a company is growing. 
C)  Include interest expense. 
D)  Do not fluctuate with changes in sales. 
E)  All of these.

Question 12

Arena Company provides health insurance to its employees that costs $15,000 per month. In addition, the company contributes 5% of the employees' $150,000 gross salary to a retirement program. The entry to record the accrued benefits for the month would include a:

Accepted Answer

A)  Debit to Medical Insurance Payable $15,000. 
B)  Debit to Employee Retirement Program Payable $7,500. 
C)  Debit to Employee Benefits Expense $22,500. 
D)  Credit to Employee Benefits Expense $15,000. 
E)  Credit to Employee Benefits Expense $22,500. 
A)  Debit to Medical Insurance Payable $15,000. 
B)  Debit to Employee Retirement Program Payable $7,500. 
C)  Debit to Employee Benefits Expense $22,500. 
D)  Credit to Employee Benefits Expense $15,000. 
E)  Credit to Employee Benefits Expense $22,500.

Question 13

What is a short-term note payable? Explain the accounting issues related to notes payable.

Accepted Answer

A note payable is a written promise to p

Question 14

Phil Phoenix is paid on a monthly basis. For the month of January of the current year, he earned a total of $8,288. FICA tax for Social Security is 6.2% and the FICA tax for Medicare is 1.45%. The FUTA tax rate is 0.8%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The amount of Federal Income Tax withheld from his earnings was $1,375.17. What is the amount of the employer's annual payroll taxes expenses for this employee?

Accepted Answer

A)  $56.00 
B)  $120.18 
C)  $378.00 
D)  $513.86 
E)  $1,068.04 
A)  $56.00 
B)  $120.18 
C)  $378.00 
D)  $513.86 
E)  $1,068.04

Question 15

Employers:

Accepted Answer

A)  Pay FICA taxes equal to the amount of FICA taxes withheld from the employees. 
B)  Withhold employees' FICA taxes. 
C)  Pay unemployment taxes to the federal government. 
D)  Pay unemployment taxes to both the state and federal governments. 
E)  All of these. 
A)  Pay FICA taxes equal to the amount of FICA taxes withheld from the employees. 
B)  Withhold employees' FICA taxes. 
C)  Pay unemployment taxes to the federal government. 
D)  Pay unemployment taxes to both the state and federal governments. 
E)  All of these.

Question 16

A company's income before interest expense and income taxes in 2010 and 2011 is $225,000 and $200,000, respectively. Its interest expense was $45,000 for both years. Calculate the company's times interest earned ratio, and comment on its level of risk.

Accepted Answer

The answer of A company's income before interest expense and...

Question 17

Trade accounts payable are amounts owed to suppliers for products or services purchased on credit.

Accepted Answer

A) True 
 B)False

Question 18

Liabilities:

Accepted Answer

A)  Must be certain. 
B)  Must sometimes be estimated. 
C)  Must be for a specific amount. 
D)  Must always have a definite date for payment. 
E)  Must involve an outflow of cash. 
A)  Must be certain. 
B)  Must sometimes be estimated. 
C)  Must be for a specific amount. 
D)  Must always have a definite date for payment. 
E)  Must involve an outflow of cash.

Question 19

Harvel Company is required by law to collect and remit sales taxes to the state. If Havel has $8,000 of cash sales that are subject to an 8% sales tax, what is the journal entry to record the cash sales?

Accepted Answer

A)  Debit Cash $8,000; credit Sales $7,360; credit Sales Taxes Payable $640. 
B)  Debit Sales Taxes Payable $640; debit Cash $7,360; credit Sales $8,000. 
C)  Debit Cash $8,000; credit Sales $8,000; and record the taxes when paid. 
D)  Debit Cash $8,640; credit Sales $8,000; credit Sales Taxes Payable $640. 
E)  Debit Accounts Receivable $8,640; credit Sales $8,000; credit Sales Taxes Payable $640. 
A)  Debit Cash $8,000; credit Sales $7,360; credit Sales Taxes Payable $640. 
B)  Debit Sales Taxes Payable $640; debit Cash $7,360; credit Sales $8,000. 
C)  Debit Cash $8,000; credit Sales $8,000; and record the taxes when paid. 
D)  Debit Cash $8,640; credit Sales $8,000; credit Sales Taxes Payable $640. 
E)  Debit Accounts Receivable $8,640; credit Sales $8,000; credit Sales Taxes Payable $640.

Question 20

Vacation benefits are a type of _______________ liability.

Accepted Answer

The answer of Vacation benefits are a type of _______________...

Exam 11: Current Liabilities and Payroll Accounting

Employer payroll taxes:

The times interest earned ratio is calculated by dividing income before interest expense and income taxes by interest expense.

In the accounting records of a defendant, lawsuits:

Contingent liabilities can be:

The annual Federal Unemployment Tax Return is:

Debt guarantees:

Contingent liabilities are recorded in the accounts if the future event is _______________ and the amount owed can be _____________.

Explain the responsibilities of and the accounting by employers for employee payroll deductions.

Pastimes Co. offers its employees a bonus equal to 2% of the company's net income. The estimated net income for the year is expected to be $850,000. Prepare the general journal entry to record the employee bonus plan expense.

The tax rate for FICA-social security is 6.2% and the tax rate for FICA-Medicare is 1.45%. Calculate the total amount of FICA withholding for an employee whose pay is $2,400 and is entirely subject to these FICA taxes.

Fixed expenses:

Arena Company provides health insurance to its employees that costs $15,000 per month. In addition, the company contributes 5% of the employees' $150,000 gross salary to a retirement program. The entry to record the accrued benefits for the month would include a:

What is a short-term note payable? Explain the accounting issues related to notes payable.

Employers:

A company's income before interest expense and income taxes in 2010 and 2011 is $225,000 and $200,000, respectively. Its interest expense was $45,000 for both years. Calculate the company's times interest earned ratio, and comment on its level of risk.

Trade accounts payable are amounts owed to suppliers for products or services purchased on credit.

Liabilities:

Harvel Company is required by law to collect and remit sales taxes to the state. If Havel has $8,000 of cash sales that are subject to an 8% sales tax, what is the journal entry to record the cash sales?

Vacation benefits are a type of _______________ liability.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resources, and Intangibles

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost Allocation and Performance Measurement

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Capital Budgeting and Managerial Decisions

Time Value of Money

Filters

Contingent liabilities are recorded in the accounts if the future event is ___ and the amount owed can be _.