Question 1

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 2

A _____________________ is a seller's obligation to replace or correct a product or service that fails to perform as expected within a specified period.

Accepted Answer

The answer of A _____________________ is a seller's obligation to...

Question 3

The unemployment insurance program:

Accepted Answer

A)  Is a joint federal and state program. 
B)  Is administered by each state. 
C)  Provides unemployment benefits to qualified workers. 
D)  Adjusts rates paid by employers based on their merit rating. 
E)  All of these. 
A)  Is a joint federal and state program. 
B)  Is administered by each state. 
C)  Provides unemployment benefits to qualified workers. 
D)  Adjusts rates paid by employers based on their merit rating. 
E)  All of these.

Question 4

All expected future payments are liabilities.

Accepted Answer

A) True 
 B)False

Question 5

Promissory notes are nonnegotiable meaning that they cannot be transferred from party to party.

Accepted Answer

A) True 
 B)False

Question 6

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 7

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

Accepted Answer

Probable;

Question 8

A company had income before interest expense and income taxes of $176,000, and its interest expense is $55,000. Calculate the company's times interest earned ratio.

Accepted Answer

$176,000/$

Question 9

Contingent liabilities must be recorded if:

Accepted Answer

A)  The future event is probable and the amount owed can be reasonably estimated. 
B)  The future event is remote. 
C)  The future event is possible. 
D)  The amount owed cannot be reasonably estimated. 
E)  All of these. 
A)  The future event is probable and the amount owed can be reasonably estimated. 
B)  The future event is remote. 
C)  The future event is possible. 
D)  The amount owed cannot be reasonably estimated. 
E)  All of these.

Question 10

Obligations not due within one year or the company's operating cycle, whichever is longer, are reported as current liabilities.

Accepted Answer

A) True 
 B)False

Question 11

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 12

Define liabilities and explain the difference between current and long-term liabilities.

Accepted Answer

Liabilities are probable future payments

Question 13

____________________________ are banks authorized to accept deposits of amounts payable to the federal government, including amounts due for payroll taxes.

Accepted Answer

Federal de

Question 14

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

Accepted Answer

Employers are responsible for collecting

Question 15

A potential lawsuit claim is recorded when the claim can be reasonably estimated and it is possible.

Accepted Answer

A) True 
 B)False

Question 16

Classify each of the following items as either:

Accepted Answer

The answer of Classify each of the following items as...

Question 17

An employee earned $3,450 for the current period. Calculate the total and individual amounts to be withheld for social security (6.2%), Medicare (1.45%) and federal income tax (15%) assuming the entire employee's pay is subject to FICA taxes.

Accepted Answer

The answer of An employee earned $3,450 for the current...

Question 18

A liability is a probable future payment of assets or services that a company is presently obligated to make as a result of past transactions or events.

Accepted Answer

A) True 
 B)False

Question 19

Obligations due to be paid within one year or the company's operating cycle, whichever is longer, are:

Accepted Answer

A)  Current assets. 
B)  Current liabilities. 
C)  Earned revenues. 
D)  Operating cycle liabilities. 
E)  Bills. 
A)  Current assets. 
B)  Current liabilities. 
C)  Earned revenues. 
D)  Operating cycle liabilities. 
E)  Bills.

Question 20

An estimated liability is a known obligation of an uncertain amount that can at least be reasonably estimated.

Accepted Answer

A) True 
 B)False

Exam 11: Current Liabilities and Payroll Accounting

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

A _____________________ is a seller's obligation to replace or correct a product or service that fails to perform as expected within a specified period.

The unemployment insurance program:

All expected future payments are liabilities.

Promissory notes are nonnegotiable meaning that they cannot be transferred from party to party.

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?

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

A company had income before interest expense and income taxes of $176,000, and its interest expense is $55,000. Calculate the company's times interest earned ratio.

Contingent liabilities must be recorded if:

Obligations not due within one year or the company's operating cycle, whichever is longer, are reported as current liabilities.

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:

Define liabilities and explain the difference between current and long-term liabilities.

____________________________ are banks authorized to accept deposits of amounts payable to the federal government, including amounts due for payroll taxes.

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

A potential lawsuit claim is recorded when the claim can be reasonably estimated and it is possible.

Classify each of the following items as either:

An employee earned $3,450 for the current period. Calculate the total and individual amounts to be withheld for social security (6.2%), Medicare (1.45%) and federal income tax (15%) assuming the entire employee's pay is subject to FICA taxes.

A liability is a probable future payment of assets or services that a company is presently obligated to make as a result of past transactions or events.

Obligations due to be paid within one year or the company's operating cycle, whichever is longer, are:

An estimated liability is a known obligation of an uncertain amount that can at least be reasonably estimated.

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

Filters

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