Question 1

Assuming a 360-day year, the interest charged by the bank, at the rate of 6%, on a 90-day, discounted note payable of $100,000 is

Accepted Answer

A) $6,000 
B) $1,500 
C) $500 
D) $3,000 
A) $6,000 
B) $1,500 
C) $500 
D) $3,000

Question 2

The Young Company has the following assets and liabilities:   Determine the quick ratio (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 3

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

Accepted Answer

A) True 
 B)False

Question 4

The journal entry a company uses to record the estimated product warranty liability expense 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 5

The cost of a product warranty should be included as an expense in the

Accepted Answer

A) period the cash is collected for a product sold on account 
B) future period when the cost of repairing the product is paid 
C) period of the sale of the product 
D) future period when the product is repaired or replaced 
A) period the cash is collected for a product sold on account 
B) future period when the cost of repairing the product is paid 
C) period of the sale of the product 
D) future period when the product is repaired or replaced

Question 6

The following totals for the month of April were taken from the payroll register of Magnum Company. Use this information to answer the questions that follow.​  
-The journal entry to record the monthly payroll on April 30 would include a

Accepted Answer

A) credit to Salaries Payable for $8,150 
B) debit to Salaries Expense for $7,902 
C) debit to Salaries Payable for $8,150 
D) debit to Salaries Payable for $7,902 
A) credit to Salaries Payable for $8,150 
B) debit to Salaries Expense for $7,902 
C) debit to Salaries Payable for $8,150 
D) debit to Salaries Payable for $7,902

Question 7

On the first day of the fiscal year, Hawthorne Company obtained an $88,000, 7-year, 5% installment note from Sea Side Bank. The note requires annual payments of $15,208, with the first payment occurring on the last day of the fiscal year. The first payment consists of interest of $4,400 and principal repayment of $10,808. The journal entry Hawthorne would record to make the first annual payment due on the note would include a

Accepted Answer

A) debit to cash for $15,208 
B) credit to notes payable for $10,808 
C) debit to interest expense for $4,400 
D) debit to notes payable for $15,208 
A) debit to cash for $15,208 
B) credit to notes payable for $10,808 
C) debit to interest expense for $4,400 
D) debit to notes payable for $15,208

Question 8

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 9

Most employers are levied a tax on payrolls for

Accepted Answer

A) ​sales tax 
B) ​medical insurance premiums 
C) ​federal unemployment compensation tax 
D) ​union dues 
A) ​sales tax 
B) ​medical insurance premiums 
C) ​federal unemployment compensation tax 
D) ​union dues

Question 10

Assuming no employees are subject to ceilings for their earnings, Harris Company has the following information for the pay period of January 15-31. Use this information to answer the questions that follow.  
-Assuming that all wages are subject to federal and state unemployment taxes, the employer's payroll tax expense would be

Accepted Answer

A) $1,370 
B) $750 
C) $620 
D) $2,870 
A) $1,370 
B) $750 
C) $620 
D) $2,870

Question 11

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

Accepted Answer

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

Question 12

An employee receives an hourly rate of $15, with time and a half for all hours worked in excess of 40 during the week. Payroll data for the current week are as follows: hours worked, 46; federal income tax withheld, $120; all earnings are subject to social security tax; Social security tax rate, 6%; and Medicare tax rate, 1.5%; state unemployment tax, 5.4% on the first $7,000; federal unemployment tax, 0.8% on the first $7,000. Prepare the journal entries to record the salaries expense and the employer payroll tax expense. If required, round your answers to the nearest cent.

Accepted Answer

The answer of An employee receives an hourly rate of...

Question 13

Assuming a 360-day year, when a $50,000, 90-day, 9% interest-bearing note payable matures, total payment will be

Accepted Answer

A) $51,125 
B) $54,500 
C) $1,125 
D) $4,500 
A) $51,125 
B) $54,500 
C) $1,125 
D) $4,500

Question 14

If a company borrows money from a bank as an installment note, the interest portion of each annual payment will

Accepted Answer

A) equal the interest rate on the note times the carrying amount of the note at the beginning of the period 
B) remain constant over the term of the note 
C) equal the interest rate on the note times the face amount 
D) increase over the term of the note 
A) equal the interest rate on the note times the carrying amount of the note at the beginning of the period 
B) remain constant over the term of the note 
C) equal the interest rate on the note times the face amount 
D) increase over the term of the note

Question 15

Salif, Inc. has 15 full-time manufacturing employees. Their weekly payroll averages $17,800, but it varies from week to week primarily due to overtime worked. Last month, the weekly average climbed to $18,700, but no additional overtime had been authorized.​
All employees swipe their badges at the beginning and end of their shift. They are also supposed to swipe their badges when they come and go at lunchtime. The computer automatically calculates the hours worked for each employee. A clerk prints out the time sheets, which are then approved by each employee's supervisor and a manager. The manager rarely finds any problems with the time sheets and frequently signs them without checking them carefully. Once the time sheets are approved, the clerk sends the information to a payroll processor, who completes all the remaining payroll functions. Employees' money is direct-deposited into their accounts, and they receive a pay stub each week.​
When management investigates, they discover that a supervisor had authorized additional overtime for two employees to complete an important project. However, the supervisor had not obtained formal authorization for the overtime. The authorization was given verbally by the plant manager. What internal control procedure would have avoided the extra overtime expense?

Accepted Answer

The supervisor should be requi

Question 16

On May 18, Rodriguez Co. issued an $84,000, 6%, 120-day note payable on an overdue account payable to Wilson Company. Assume that the fiscal year of Rodriguez ends on June 30. Which of the following relationships is true?

Accepted Answer

A) Rodriguez is the creditor and credits Accounts Receivable 
B) Wilson is the creditor and debits Accounts Receivable 
C) Wilson is the borrower and credits Accounts Payable 
D) Rodriguez is the borrower and debits Accounts Payable 
A) Rodriguez is the creditor and credits Accounts Receivable 
B) Wilson is the creditor and debits Accounts Receivable 
C) Wilson is the borrower and credits Accounts Payable 
D) Rodriguez is the borrower and debits Accounts Payable

Question 17

Assuming no employees are subject to ceilings for their earnings, Harris Company has the following information for the pay period of January 15-31. Use this information to answer the questions that follow.  
-Assume that social security taxes are payable at a 6% rate and Medicare taxes are payable at a 1.5% rate with no maximum earnings, and that federal and state unemployment compensation taxes total 6.2% on the first $7,000 of earnings. If an employee earns $2,500 for the current week and the employee's year-to-date earnings before this week were $6,800, what is the total employer payroll taxes related to the current week?

Accepted Answer

A) $187.50 
B) $199.90 
C) $342.50 
D) $12.40 
A) $187.50 
B) $199.90 
C) $342.50 
D) $12.40

Question 18

Amounts withheld from each employee for social security and Medicare vary by state.

Accepted Answer

A) True 
 B)False

Question 19

Based on the following data, what is the quick ratio, rounded to one decimal point?

Accepted Answer

A) 3.4 
B) 3.0 
C) 2.2 
D) 1.8 
A) 3.4 
B) 3.0 
C) 2.2 
D) 1.8

Question 20

Assuming a 360-day year, when a $20,000, 90-day, 5% interest-bearing note payable matures, total payment will be

Accepted Answer

A) $21,000 
B) $1,000 
C) $20,250 
D) $250 
A) $21,000 
B) $1,000 
C) $20,250 
D) $250

Exam 10: Liabilities: Current, Installment Notes, and Contingencies

Assuming a 360-day year, the interest charged by the bank, at the rate of 6%, on a 90-day, discounted note payable of $100,000 is

The Young Company has the following assets and liabilities: Determine the quick ratio (rounded to one decimal point).

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

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

The cost of a product warranty should be included as an expense in the

The following totals for the month of April were taken from the payroll register of Magnum Company. Use this information to answer the questions that follow.​ -The journal entry to record the monthly payroll on April 30 would include a

Which of the following is the most desirable quick ratio?

Most employers are levied a tax on payrolls for

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

Assuming a 360-day year, when a $50,000, 90-day, 9% interest-bearing note payable matures, total payment will be

If a company borrows money from a bank as an installment note, the interest portion of each annual payment will

On May 18, Rodriguez Co. issued an $84,000, 6%, 120-day note payable on an overdue account payable to Wilson Company. Assume that the fiscal year of Rodriguez ends on June 30. Which of the following relationships is true?

Amounts withheld from each employee for social security and Medicare vary by state.

Based on the following data, what is the quick ratio, rounded to one decimal point?

Assuming a 360-day year, when a $20,000, 90-day, 5% interest-bearing note payable matures, total payment will be

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

The Accounting Cycle

Accounting for Retail Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Bonds Payable

Corporations: Organization, Stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity-Based Costing

Support Department and Joint Cost Allocation

Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Evaluating Variances From Standard Costs

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

The Balanced Scorecard and Corporate Social Responsibility

Investments

Filters

The following totals for the month of April were taken from the payroll register of Magnum Company. Use this information to answer the questions that follow. -The journal entry to record the monthly payroll on April 30 would include a