Question 1

Which of the following is a reason that many companies require a photo ID when employees pick up their pay cheques?

Accepted Answer

A) To make sure an employee's work hours have been accurately reported 
B) To improve efficiency of the payroll disbursement process 
C) To avoid writing a pay cheque to a fictitious person 
D) To make sure all employees are legal adults 
A) To make sure an employee's work hours have been accurately reported 
B) To improve efficiency of the payroll disbursement process 
C) To avoid writing a pay cheque to a fictitious person 
D) To make sure all employees are legal adults C

Question 2

Which of the following is associated with cash received in advance for services to be performed in the future?

Accepted Answer

A) Estimated warranty payable 
B) Accounts payable 
C) Unearned revenue 
D) Accrued expense 
A) Estimated warranty payable 
B) Accounts payable 
C) Unearned revenue 
D) Accrued expense C

Question 3

Which of the following accounting principles requires that warranty expenses must be estimated and recognised in the same period as the related sales revenue is recognised?

Accepted Answer

A) The matching principle 
B) The consistency principle 
C) The disclosure principle 
D) The profit recognition principle 
A) The matching principle 
B) The consistency principle 
C) The disclosure principle 
D) The profit recognition principle A

Question 4

Art Parrish, the sole employee of Parrish Sales, has gross salary for March of $4 000. He is subject to income tax at a rate of 18%. Art has a deduction of $320 for health insurance and $80 for voluntary superannuation. The first entry in the payroll cycle to record salary expense should include which of the following?

Accepted Answer

A) Credit Cash 
B) Debit to Employee benefits payable 
C) Debit to Health insurance expense 
D) Credit to Salary payable 
A) Credit Cash 
B) Debit to Employee benefits payable 
C) Debit to Health insurance expense 
D) Credit to Salary payable

Question 5

On 20 June 2013, Parker Services received $2 400 in advance from a customer for one month's service. The journal entry to adjust the accounts at the end of June would be which of the following?

Accepted Answer

A) Debit Unearned service revenue $2 400 and credit Service revenue $2 400. 
B) Debit Service revenue $1 600 and credit Unearned service revenue $1 600. 
C) Debit Service revenue $800 and credit Accounts receivable $800. 
D) Debit Unearned service revenue $800 and credit Service revenue $800. 
A) Debit Unearned service revenue $2 400 and credit Service revenue $2 400. 
B) Debit Service revenue $1 600 and credit Unearned service revenue $1 600. 
C) Debit Service revenue $800 and credit Accounts receivable $800. 
D) Debit Unearned service revenue $800 and credit Service revenue $800.

Question 6

Which of the following is a reason that many companies maintain two payroll bank accounts?

Accepted Answer

A) To make bank reconciliations simpler 
B) To separate the duties of human resources personnel and accounting personnel 
C) To prove an employee's hours worked 
D) To avoid writing a pay cheque to a fictitious person 
A) To make bank reconciliations simpler 
B) To separate the duties of human resources personnel and accounting personnel 
C) To prove an employee's hours worked 
D) To avoid writing a pay cheque to a fictitious person

Question 7

Estimated warranty payable would be included in the operating expense section of the income statement.

Accepted Answer

A) True 
 B)False

Question 8

Employers must deduct income tax from an individual employee's earnings.

Accepted Answer

A) True 
 B)False

Question 9

Art Parrish is the sole employee of Parrish Sales. His company pays a portion of his health insurance premium, and also contributes to a superannuation. The company share of the health insurance premium is $400, and the company contribution to superannuation is $550. The second journal entry in the payroll cycle to record the employee benefits to be paid by the company should include which of the following?

Accepted Answer

A) Credit Superannuation expense 
B) Credit Health insurance expense 
C) Debit Employee benefits payable 
D) Credit Employee benefits payable 
A) Credit Superannuation expense 
B) Credit Health insurance expense 
C) Debit Employee benefits payable 
D) Credit Employee benefits payable

Question 10

ABC signed a 5- year, 9% note payable for $80 000 on 1 May 2014. Which account will be credited when the note paid at maturity?

Accepted Answer

A) Interest payable 
B) Cash 
C) Interest expense 
D) Note payable 
A) Interest payable 
B) Cash 
C) Interest expense 
D) Note payable

Question 11

Which of the following is a liability, created when a company receives cash for services to be provided in the future?

Accepted Answer

A) Estimated warranty payable 
B) Accrued liability 
C) Service revenue 
D) Unearned revenue 
A) Estimated warranty payable 
B) Accrued liability 
C) Service revenue 
D) Unearned revenue

Question 12

Which of the following is pay stated as a percentage of a sale amount?

Accepted Answer

A) Benefits 
B) Wages 
C) Commission 
D) Bonuses 
A) Benefits 
B) Wages 
C) Commission 
D) Bonuses

Question 13

In which of the following periods should the estimated warranty liability be debited?

Accepted Answer

A) The period when the product is sold 
B) The period when the product is shipped to the customer 
C) The period when cash is collected for the sale of the product 
D) The period when cash is paid to repair or replace the product 
A) The period when the product is sold 
B) The period when the product is shipped to the customer 
C) The period when cash is collected for the sale of the product 
D) The period when cash is paid to repair or replace the product

Question 14

Which of the following is pay over and above base salary, usually paid for exceptional performance?

Accepted Answer

A) Wages 
B) Commission 
C) Benefits 
D) Bonuses 
A) Wages 
B) Commission 
C) Benefits 
D) Bonuses

Question 15

When the likelihood of an actual loss is probable, and the amount can be estimated, it should be recorded as an expense and as a liability.

Accepted Answer

A) True 
 B)False

Question 16

General Store offers a warranty on its sales. At 1 January, estimated warranty payable was $6 000. During the year, General Stores paid warranty claims of $500 and recorded warranty expense of $1 00. What is the account name and amount of the current liability that will be reported on the balance sheet as at 31 December?

Accepted Answer

A) Warranty expense $6 500 
B) Estimated warranty payable $6 500 
C) Warranty expense payable $5 500 
D) Estimated warranty payable $ 7 500 
A) Warranty expense $6 500 
B) Estimated warranty payable $6 500 
C) Warranty expense payable $5 500 
D) Estimated warranty payable $ 7 500

Question 17

Which of the following is a characteristic of a current liability?

Accepted Answer

A) A current liability is a liability that is due within 10 days. 
B) A current liability is a liability that is due within 30 days. 
C) A current liability is a liability that is due within one year or one operating cycle, whichever is longer. 
D) A current liability is a liability that is due in longer than a one- year period, or one operating cycle. 
A) A current liability is a liability that is due within 10 days. 
B) A current liability is a liability that is due within 30 days. 
C) A current liability is a liability that is due within one year or one operating cycle, whichever is longer. 
D) A current liability is a liability that is due in longer than a one- year period, or one operating cycle.

Question 18

A contingent liability that will probably become an actual liability, and can be reasonably estimated, must be recorded as an expense.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is a major control risk in the payroll area?

Accepted Answer

A) Contracts being awarded to relatives of employees 
B) Expenses being recorded as assets in order to manipulate earnings 
C) Theft of inventory by staff 
D) Fictitious persons cashing pay cheques 
A) Contracts being awarded to relatives of employees 
B) Expenses being recorded as assets in order to manipulate earnings 
C) Theft of inventory by staff 
D) Fictitious persons cashing pay cheques

Question 20

General Stores borrowed $50 000 at 6% interest on a long- term loan payable on 31 August. At 31 December, interest plus $10 000 of the principal are payable within one year. What is the account name and amount of a current liability that will be reported on the balance sheet as at 31 December?

Accepted Answer

A) Interest payable $3 000 
B) Interest payable $2 000 
C) Interest payable $600 
D) Interest payable $1 000 
A) Interest payable $3 000 
B) Interest payable $2 000 
C) Interest payable $600 
D) Interest payable $1 000

Which of the following is a reason that many companies require a photo ID when employees pick up their pay cheques?

Which of the following is associated with cash received in advance for services to be performed in the future?

Which of the following accounting principles requires that warranty expenses must be estimated and recognised in the same period as the related sales revenue is recognised?

On 20 June 2013, Parker Services received $2 400 in advance from a customer for one month's service. The journal entry to adjust the accounts at the end of June would be which of the following?

Which of the following is a reason that many companies maintain two payroll bank accounts?

Estimated warranty payable would be included in the operating expense section of the income statement.

Employers must deduct income tax from an individual employee's earnings.

ABC signed a 5- year, 9% note payable for $80 000 on 1 May 2014. Which account will be credited when the note paid at maturity?

Which of the following is a liability, created when a company receives cash for services to be provided in the future?

Which of the following is pay stated as a percentage of a sale amount?

In which of the following periods should the estimated warranty liability be debited?

Which of the following is pay over and above base salary, usually paid for exceptional performance?

When the likelihood of an actual loss is probable, and the amount can be estimated, it should be recorded as an expense and as a liability.

Which of the following is a characteristic of a current liability?

A contingent liability that will probably become an actual liability, and can be reasonably estimated, must be recorded as an expense.

Which of the following is a major control risk in the payroll area?

General Stores borrowed $50 000 at 6% interest on a long- term loan payable on 31 August. At 31 December, interest plus $10 000 of the principal are payable within one year. What is the account name and amount of a current liability that will be reported on the balance sheet as at 31 December?

The Role of Accounting in Business

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Retailing Operations

Retail Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Non-Current Assets: Property, Plant and Equipment, and Intangibles

Non-Current Liabilities, Debentures Payable and Classification of Liabilities on the Balance Sheet

Partnerships

Companies: Share Capital and the Balance Sheet

Companies: Effects on Retained Earnings, Share Splits and Buy-Backs, and the Income Statement

The Cash Flow Statement

The Framework of Accounting

Financial Statement Analysis

Introduction to Managerial Accounting and the Master Budget

Job Costing

Short-Term Business Decisions

Capital Investment Decisions and the Time Value of Money

Appendix

Filters

Exam 11: Current Liabilities and Payroll

Which of the following is a reason that many companies require a photo ID when employees pick up their pay cheques?

Which of the following is associated with cash received in advance for services to be performed in the future?

Which of the following accounting principles requires that warranty expenses must be estimated and recognised in the same period as the related sales revenue is recognised?

On 20 June 2013, Parker Services received $2 400 in advance from a customer for one month's service. The journal entry to adjust the accounts at the end of June would be which of the following?

Which of the following is a reason that many companies maintain two payroll bank accounts?

Estimated warranty payable would be included in the operating expense section of the income statement.

Employers must deduct income tax from an individual employee's earnings.

ABC signed a 5- year, 9% note payable for $80 000 on 1 May 2014. Which account will be credited when the note paid at maturity?

Which of the following is a liability, created when a company receives cash for services to be provided in the future?

Which of the following is pay stated as a percentage of a sale amount?

In which of the following periods should the estimated warranty liability be debited?

Which of the following is pay over and above base salary, usually paid for exceptional performance?

When the likelihood of an actual loss is probable, and the amount can be estimated, it should be recorded as an expense and as a liability.

Which of the following is a characteristic of a current liability?

A contingent liability that will probably become an actual liability, and can be reasonably estimated, must be recorded as an expense.

Which of the following is a major control risk in the payroll area?

General Stores borrowed $50 000 at 6% interest on a long- term loan payable on 31 August. At 31 December, interest plus $10 000 of the principal are payable within one year. What is the account name and amount of a current liability that will be reported on the balance sheet as at 31 December?

The Role of Accounting in Business

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Retailing Operations

Retail Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Non-Current Assets: Property, Plant and Equipment, and Intangibles

Non-Current Liabilities, Debentures Payable and Classification of Liabilities on the Balance Sheet

Partnerships

Companies: Share Capital and the Balance Sheet

Companies: Effects on Retained Earnings, Share Splits and Buy-Backs, and the Income Statement

The Cash Flow Statement

The Framework of Accounting

Financial Statement Analysis

Introduction to Managerial Accounting and the Master Budget

Job Costing

Short-Term Business Decisions

Capital Investment Decisions and the Time Value of Money

Appendix

Filters