Question 1

A contingent liability:

Accepted Answer

A)  Is always of a specific amount. 
B)  Is a potential obligation that depends on a future event arising from a past transaction or event. 
C)  Is an obligation not requiring future payment. 
D)  Is an obligation arising from the purchase of goods or services on credit. 
E)  Is an obligation arising from a future event. 
A)  Is always of a specific amount. 
B)  Is a potential obligation that depends on a future event arising from a past transaction or event. 
C)  Is an obligation not requiring future payment. 
D)  Is an obligation arising from the purchase of goods or services on credit. 
E)  Is an obligation arising from a future event.

Question 2

A bank that is authorized to accept deposits of amounts payable to the federal government is a:

Accepted Answer

A)  Credit union. 
B)  FDIC insured bank. 
C)  Federal depository bank. 
D)  National bank. 
E)  Federal Reserve Bank. 
A)  Credit union. 
B)  FDIC insured bank. 
C)  Federal depository bank. 
D)  National bank. 
E)  Federal Reserve Bank.

Question 3

On November 1, Carter Company signed a 120-day, 10% note payable, with a face value of $9,000. What is the adjusting entry for the accrued interest at December 31 on the note?

Accepted Answer

A)  Debit interest expense, $0; credit interest payable, $0. 
B)  Debit interest expense, $100; credit interest payable, $100. 
C)  Debit interest expense, $150; credit interest payable, $150. 
D)  Debit interest expense, $200; credit interest payable, $200. 
E)  Debit interest expense, $300; credit interest payable, $300. 
A)  Debit interest expense, $0; credit interest payable, $0. 
B)  Debit interest expense, $100; credit interest payable, $100. 
C)  Debit interest expense, $150; credit interest payable, $150. 
D)  Debit interest expense, $200; credit interest payable, $200. 
E)  Debit interest expense, $300; credit interest payable, $300.

Question 4

Identify and explain the types of employer payroll taxes.

Accepted Answer

Employers are required to make matching

Question 5

A _____________________ shows the pay period dates, hours worked, gross pay, deductions, and net pay of each employee for every pay period.

Accepted Answer

The answer of A _____________________ shows the pay period dates,...

Question 6

On November 1, Carter Company signed a 120-day, 10% note payable, with a face value of $9,000. Carter made the appropriate year-end accrual. What is the journal entry as of March 1 to record the payment of the note assuming no reversing entry was made?

Accepted Answer

A)  Debit Notes Payable $9,000; debit Interest Payable $150; credit Cash $9,150. 
B)  Debit Cash $9,300; credit Notes Payable $9,300. 
C)  Debit Notes Payable $9,300; credit Interest Payable $150; credit Interest Expense $150; credit Cash $9,000. 
D)  Debit Notes Payable $9,000; debit Interest Payable $150; debit Interest Expense $150; credit Cash $9,300. 
E)  Debit Notes Payable $9,000; debit Interest Expense $300; credit Cash $9,300. 
A)  Debit Notes Payable $9,000; debit Interest Payable $150; credit Cash $9,150. 
B)  Debit Cash $9,300; credit Notes Payable $9,300. 
C)  Debit Notes Payable $9,300; credit Interest Payable $150; credit Interest Expense $150; credit Cash $9,000. 
D)  Debit Notes Payable $9,000; debit Interest Payable $150; debit Interest Expense $150; credit Cash $9,300. 
E)  Debit Notes Payable $9,000; debit Interest Expense $300; credit Cash $9,300.

Question 7

A short-term note payable is a written promise to pay a specified amount on a definite future date within one year or the operating cycle, whichever is longer.

Accepted Answer

A) True 
 B)False

Question 8

__________ allowances are items that reduce the amount of federal income taxes owed by the individual.

Accepted Answer

The answer of __________ allowances are items that reduce the...

Question 9

The employer should record payroll deductions as:

Accepted Answer

A)  Employee receivables. 
B)  Payroll taxes. 
C)  Current liabilities. 
D)  Wages payable. 
E)  Employee payables. 
A)  Employee receivables. 
B)  Payroll taxes. 
C)  Current liabilities. 
D)  Wages payable. 
E)  Employee payables.

Question 10

A company has 2 employees. The company's total salaries for the month of January were $8,000. The federal income tax rate for both employees is 15%. The FICA-social security tax rate is 6.2% and the FICA-Medicare tax rate is 1.45%. Calculate the amount of employee taxes withheld and prepare the company's journal entry to record the January payroll assuming these were the only deductions.

Accepted Answer

The answer of A company has 2 employees. The company's...

Question 11

On September 15, SportsWorld borrowed $75,000 cash from FirstBank by signing a 12%, 60-day note payable.
a. Prepare SportsWorld's journal entry to record the issuance of the note payable.
b. Prepare SportsWorld's journal entry to record the payment of the note at maturity.

Accepted Answer

The answer of On September 15, SportsWorld borrowed $75,000 cash...

Question 12

A table that shows the amount of federal income tax to be withheld from an employee's pay is the:

Accepted Answer

A)  Form 941. 
B)  Tax table. 
C)  Wage bracket withholding table. 
D)  W-2. 
E)  W-4. 
A)  Form 941. 
B)  Tax table. 
C)  Wage bracket withholding table. 
D)  W-2. 
E)  W-4.

Question 13

A company's income before interest expense and income taxes is $302,400, and its interest expense is $72,000. Calculate the company's times interest earned ratio.

Accepted Answer

$302,400/$

Question 14

Known liabilities are obligations set by agreements, contracts, or laws, and are measurable and definitely determinable.

Accepted Answer

A) True 
 B)False

Question 15

Phil Phoenix is paid monthly. For the month of January of the current year, he earned a total of $8,288. The FICA tax for social security is 6.2% and the FICA tax rate 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. His net pay for the month is:

Accepted Answer

A)  $5,190.83 
B)  $5,844.79 
C)  $6,278.79 
D)  $6,566.00 
E)  $6,792.64 
A)  $5,190.83 
B)  $5,844.79 
C)  $6,278.79 
D)  $6,566.00 
E)  $6,792.64

Question 16

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 17

A company's employer payroll tax rates are 0.8% for federal unemployment taxes, 5.4% for state unemployment taxes, 6.2% for FICA social security taxes on earnings up to $106,800, and 1.45% for FICA Medicare taxes on all earnings. Compute the W-2 Wage and Tax Statement information required below for the following employees:

Accepted Answer

The answer of A company's employer payroll tax rates are...

Question 18

A company estimates that warranty expense will be 4% of sales. The company's sales for the current period are $185,000. The current period's entry to record the warranty expense is:

Accepted Answer

A)  Debit Warranty Expense $7,400; credit Sales $7,400. 
B)  Debit Warranty Expense $7,400; credit Estimated Warranty Liability $7,400. 
C)  Debit Estimated Warranty Liability $7,400; credit Warranty Expense $7,400. 
D)  Debit Estimated Warranty Liability $7,400; credit Cash $7,400. 
E)  No entry is recorded until the items are returned for warranty repairs. 
A)  Debit Warranty Expense $7,400; credit Sales $7,400. 
B)  Debit Warranty Expense $7,400; credit Estimated Warranty Liability $7,400. 
C)  Debit Estimated Warranty Liability $7,400; credit Warranty Expense $7,400. 
D)  Debit Estimated Warranty Liability $7,400; credit Cash $7,400. 
E)  No entry is recorded until the items are returned for warranty repairs.

Question 19

What are estimated liabilities? Cite at least two examples and explain why they are classified as estimated liabilities.

Accepted Answer

Estimated liabilities are known obligati

Question 20

All of the following statements regarding long-term liabilities are except?

Accepted Answer

A)  Liabilities not expected to be paid within the longer of one year or the company's operating cycle are reported as long-term liabilities. 
B)  Long-term liabilities include long-term notes payable, warranty liabilities, lease liabilities, and bonds payable. 
C)  Liabilities that do not have a fixed due date, but are payable on demand, are reported as long-term liabilities. 
D)  Long-term liabilities can be reported on the balance sheet in a single total or in multiple categories. 
E)  A single long-term liability can be divided between current and noncurrent sections on the balance sheet. 
A)  Liabilities not expected to be paid within the longer of one year or the company's operating cycle are reported as long-term liabilities. 
B)  Long-term liabilities include long-term notes payable, warranty liabilities, lease liabilities, and bonds payable. 
C)  Liabilities that do not have a fixed due date, but are payable on demand, are reported as long-term liabilities. 
D)  Long-term liabilities can be reported on the balance sheet in a single total or in multiple categories. 
E)  A single long-term liability can be divided between current and noncurrent sections on the balance sheet.

Exam 11: Current Liabilities and Payroll Accounting

A contingent liability:

A bank that is authorized to accept deposits of amounts payable to the federal government is a:

On November 1, Carter Company signed a 120-day, 10% note payable, with a face value of $9,000. What is the adjusting entry for the accrued interest at December 31 on the note?

Identify and explain the types of employer payroll taxes.

A _____________________ shows the pay period dates, hours worked, gross pay, deductions, and net pay of each employee for every pay period.

On November 1, Carter Company signed a 120-day, 10% note payable, with a face value of $9,000. Carter made the appropriate year-end accrual. What is the journal entry as of March 1 to record the payment of the note assuming no reversing entry was made?

A short-term note payable is a written promise to pay a specified amount on a definite future date within one year or the operating cycle, whichever is longer.

__________ allowances are items that reduce the amount of federal income taxes owed by the individual.

The employer should record payroll deductions as:

On September 15, SportsWorld borrowed $75,000 cash from FirstBank by signing a 12%, 60-day note payable. a. Prepare SportsWorld's journal entry to record the issuance of the note payable. b. Prepare SportsWorld's journal entry to record the payment of the note at maturity.

A table that shows the amount of federal income tax to be withheld from an employee's pay is the:

A company's income before interest expense and income taxes is $302,400, and its interest expense is $72,000. Calculate the company's times interest earned ratio.

Known liabilities are obligations set by agreements, contracts, or laws, and are measurable and definitely determinable.

The annual Federal Unemployment Tax Return is:

A company estimates that warranty expense will be 4% of sales. The company's sales for the current period are $185,000. The current period's entry to record the warranty expense is:

What are estimated liabilities? Cite at least two examples and explain why they are classified as estimated liabilities.

All of the following statements regarding long-term liabilities are except?

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

Long-Term Assets

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

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

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