Question 1

The difference between the amount received from issuing a note payable and the amount repaid at maturity is referred to as:

Accepted Answer

A) Interest. 
B) Principal. 
C) Accounts Payable. 
D) Cash. 
E) Face Value. 
A) Interest. 
B) Principal. 
C) Accounts Payable. 
D) Cash. 
E) Face Value.

Question 2

Match between columns
                        Premises: Sales taxes payable
Vacation benefits
Payroll taxes payable
Unearned revenues
Accrued wages payable
Lawsuit against the company
Income taxes payable
Accounts payable
Warranty on products sold this year
Debt guarantees

Accepted Answer

The Answer of Contingent liability and Estimated liability and Known is...

Question 3

A company sold $12,000 worth of bicycles with an extended warranty. The company's experience is that warranty expense averages 2% of sales. The company should:

Accepted Answer

A) Consider the warranty expense a remote liability since the rate is only 2%. 
B) Recognize warranty expense and liability in the year of the sale. 
C) Consider the warranty expense a contingent liability. 
D) Recognize warranty expense at the time the warranty work is performed. 
E) Recognize warranty liability when the company purchases the bicycles. 
A) Consider the warranty expense a remote liability since the rate is only 2%. 
B) Recognize warranty expense and liability in the year of the sale. 
C) Consider the warranty expense a contingent liability. 
D) Recognize warranty expense at the time the warranty work is performed. 
E) Recognize warranty liability when the company purchases the bicycles.

Question 4

On November 1, Casey's Snowboards signed a $12,000, 90-day, 5% note payable to cover a past due account payable.
a. What amount of interest expense on this note should Casey's Snowboards report on year-end December 31?
b. Prepare Casey's journal entry to record the issuance of the note payable.
c. Prepare Casey's adjusting journal entry at the end of the year
d. Prepare Casey's journal entry to record the payment of the note on February 1 of the following year.

Accepted Answer

The answer of On November 1, Casey's Snowboards signed a...

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

Employers are responsible for collecting

Question 7

Payments of FUTA are made quarterly to a federal depository bank if the total amount due exceeds
$500.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

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

Question 9

If a company uses a special payroll bank account:

Accepted Answer

A) There is no need to issue W-2's. 
B) The company does not need to issue paychecks. 
C) The company draws one check for the entire payroll on the regular bank account and deposits it in the payroll bank account. 
D) The company must use a federal depository bank for the payroll bank account. 
E) There is no need for a payroll register. 
A) There is no need to issue W-2's. 
B) The company does not need to issue paychecks. 
C) The company draws one check for the entire payroll on the regular bank account and deposits it in the payroll bank account. 
D) The company must use a federal depository bank for the payroll bank account. 
E) There is no need for a payroll register.

Question 10

A payroll register does not include:

Accepted Answer

A) Hours worked. 
B) Deductions. 
C) Pay period dates. 
D) Prior year's earnings 
E) Gross pay and net pay. 
A) Hours worked. 
B) Deductions. 
C) Pay period dates. 
D) Prior year's earnings 
E) Gross pay and net pay.

Question 11

On November 1, Alan Company signed a 120-day, 8% note payable, with a face value of $9,000. What is the adjusting entry for the accrued interest at December 31 on the note? (Use 360 days a year.)

Accepted Answer

A) Debit Interest Payable, $240; credit Interest Expense, $240. 
B) Debit Interest Expense, $720; credit Interest Payable, $720. 
C) Debit Interest Expense, $120; credit Interest Payable, $120. 
D) Debit interest payable, $120; credit interest expense, $120. 
E) No adjusting entry is required. 
A) Debit Interest Payable, $240; credit Interest Expense, $240. 
B) Debit Interest Expense, $720; credit Interest Payable, $720. 
C) Debit Interest Expense, $120; credit Interest Payable, $120. 
D) Debit interest payable, $120; credit interest expense, $120. 
E) No adjusting entry is required.

Question 12

An employee earned $4,600 in February working for an employer. The FICA tax rate for Social Security is 6.2% of the first $118,500 earned during each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The employee has $644 in federal income taxes withheld and has voluntary deductions for health insurance of $50 and contributes 10% of gross pay to a retirement plan each month. The employer pays the $200 remainder of the health insurance premium and an equal amount of contribution to the retirement fund. What is the amount of net pay for the employee for the month of February?

Accepted Answer

A) $3,446.00 
B) $3,496.00 
C) $3,604.10 
D) $3,094.10 
E) $2,634.10 
A) $3,446.00 
B) $3,496.00 
C) $3,604.10 
D) $3,094.10 
E) $2,634.10

Question 13

A company's has fixed interest expense of $52,000, income taxes expense of $121,000, and net income of $281,000. The company's times interest earned ratio equals:

Accepted Answer

A) 7.73. 
B) 0.11. 
C) 2.33. 
D) 8.73. 
E) 5.40. 
A) 7.73. 
B) 0.11. 
C) 2.33. 
D) 8.73. 
E) 5.40.

Question 14

Debt guarantees are:

Accepted Answer

A) A bad business practice. 
B) Considered to be current liabilities. 
C) Recorded as liabilities even though it is highly unlikely that the original debtor will default. 
D) Considered to be contingent liabilities. 
E) Never disclosed in the financial statements. 
A) A bad business practice. 
B) Considered to be current liabilities. 
C) Recorded as liabilities even though it is highly unlikely that the original debtor will default. 
D) Considered to be contingent liabilities. 
E) Never disclosed in the financial statements.

Question 15

All of the following are employer payroll taxes except:

Accepted Answer

A) Federal income tax equal to that withheld from employees. 
B) Medicare tax equal to that withheld from employees. 
C) State unemployment tax. 
D) Social Security tax equal to that withheld from employees. 
E) Federal unemployment tax. 
A) Federal income tax equal to that withheld from employees. 
B) Medicare tax equal to that withheld from employees. 
C) State unemployment tax. 
D) Social Security tax equal to that withheld from employees. 
E) Federal unemployment tax.

Question 16

On November 1, Alan Company signed a 120-day, 8% note payable, with a face value of $9,000. Alan 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? (Use 360 days a year.)

Accepted Answer

A) Debit Notes Payable $9,240; credit Interest Payable $120; credit Interest Expense $120; credit Cash $9,000. 
B) Debit Notes Payable $9,000; debit Interest Payable $120; credit Cash $9,120. 
C) Debit Notes Payable $9,000; debit Interest Expense $240; credit Cash $9,240. 
D) Debit Notes Payable $9,000; debit Interest Payable $120; debit Interest Expense $120; credit Cash $9,240. 
E) Debit Cash $9,240; credit Notes Payable $9,240. 
A) Debit Notes Payable $9,240; credit Interest Payable $120; credit Interest Expense $120; credit Cash $9,000. 
B) Debit Notes Payable $9,000; debit Interest Payable $120; credit Cash $9,120. 
C) Debit Notes Payable $9,000; debit Interest Expense $240; credit Cash $9,240. 
D) Debit Notes Payable $9,000; debit Interest Payable $120; debit Interest Expense $120; credit Cash $9,240. 
E) Debit Cash $9,240; credit Notes Payable $9,240.

Question 17

On December 1, Victoria Company signed a 90-day, 6% note payable, with a face value of $15,000. What amount of interest expense is accrued at December 31 on the note? (Use 360 days a year.)

Accepted Answer

A) $0 
B) $300 
C) $225 
D) $75 
E) $900 
A) $0 
B) $300 
C) $225 
D) $75 
E) $900

Question 18

Amounts received in advance from customers for future products or services:

Accepted Answer

A) Are liabilities. 
B) Are revenues. 
C) Require an outlay of cash in the future. 
D) Are not allowed under GAAP. 
E) Increase income. 
A) Are liabilities. 
B) Are revenues. 
C) Require an outlay of cash in the future. 
D) Are not allowed under GAAP. 
E) Increase income.

Question 19

Contingent liabilities must be recorded if:

Accepted Answer

A) The future event is reasonably possible but not estimable. 
B) The amount owed cannot be reasonably estimated. 
C) The future event is probable but not estimable. 
D) The future event is remote. 
E) The future event is probable and the amount owed can be reasonably estimated. 
A) The future event is reasonably possible but not estimable. 
B) The amount owed cannot be reasonably estimated. 
C) The future event is probable but not estimable. 
D) The future event is remote. 
E) The future event is probable and the amount owed can be reasonably estimated.

Question 20

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 shorter.

Accepted Answer

A) True 
 B)False

The difference between the amount received from issuing a note payable and the amount repaid at maturity is referred to as:

A company sold $12,000 worth of bicycles with an extended warranty. The company's experience is that warranty expense averages 2% of sales. The company should:

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

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

Payments of FUTA are made quarterly to a federal depository bank if the total amount due exceeds $500.

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

If a company uses a special payroll bank account:

A payroll register does not include:

On November 1, Alan Company signed a 120-day, 8% note payable, with a face value of $9,000. What is the adjusting entry for the accrued interest at December 31 on the note? (Use 360 days a year.)

A company's has fixed interest expense of $52,000, income taxes expense of $121,000, and net income of $281,000. The company's times interest earned ratio equals:

Debt guarantees are:

All of the following are employer payroll taxes except:

On November 1, Alan Company signed a 120-day, 8% note payable, with a face value of $9,000. Alan 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? (Use 360 days a year.)

On December 1, Victoria Company signed a 90-day, 6% note payable, with a face value of $15,000. What amount of interest expense is accrued at December 31 on the note? (Use 360 days a year.)

Amounts received in advance from customers for future products or services:

Contingent liabilities must be recorded if:

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 shorter.

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 Resoures, 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

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Exam 11: Current Liabilities and Payroll Accounting

The difference between the amount received from issuing a note payable and the amount repaid at maturity is referred to as:

A company sold $12,000 worth of bicycles with an extended warranty. The company's experience is that warranty expense averages 2% of sales. The company should:

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

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

Payments of FUTA are made quarterly to a federal depository bank if the total amount due exceeds $500.

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

If a company uses a special payroll bank account:

A payroll register does not include:

On November 1, Alan Company signed a 120-day, 8% note payable, with a face value of $9,000. What is the adjusting entry for the accrued interest at December 31 on the note? (Use 360 days a year.)

A company's has fixed interest expense of $52,000, income taxes expense of $121,000, and net income of $281,000. The company's times interest earned ratio equals:

Debt guarantees are:

All of the following are employer payroll taxes except:

On November 1, Alan Company signed a 120-day, 8% note payable, with a face value of $9,000. Alan 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? (Use 360 days a year.)

On December 1, Victoria Company signed a 90-day, 6% note payable, with a face value of $15,000. What amount of interest expense is accrued at December 31 on the note? (Use 360 days a year.)

Amounts received in advance from customers for future products or services:

Contingent liabilities must be recorded if:

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 shorter.

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 Resoures, 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

Filters