Question 1

The Form W-2 must be given to employees before January 31 following the year covered by the Form W-2.

Accepted Answer

A) True 
 B)False

Question 2

A single liability cannot be divided between current and noncurrent liabilities.

Accepted Answer

A) True 
 B)False

Question 3

A company's income before interest expense and income taxes in 2014 and 2015 is $225,000 and
$250,000, respectively. Its interest expense was $45,000 for both years. Calculate the company's times interest earned ratio, and comment on its level of risk.

Accepted Answer

2014: 5.0
2015: 5.6
Risk analysis: The i

Question 4

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

Accepted Answer

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

Question 5

Employees earn vacation pay at the rate of one day per month. During the month of July, 25 employees qualify for one vacation day each. Their average daily wage is $100 per day. What is the amount of vacation benefit expense to be recorded for the month of July?

Accepted Answer

A) $25,000 
B) $250 
C) $2,500 
D) $25 
E) $100 
A) $25,000 
B) $250 
C) $2,500 
D) $25 
E) $100

Question 6

A liability may exist even if there is uncertainty about whom to pay, when to pay, or how much to pay.

Accepted Answer

A) True 
 B)False

Question 7

Athena Company's salaried employees earn two weeks of vacation per year. It pays $858,000 in total employee salaries for 52 weeks but its employees work only 50. Record Athena Company's weekly journal entry to record the vacation expense:

Accepted Answer

A) Debit Vacation Benefits Expense $17,160; credit Vacation Benefits Payable $17,160. 
B) Debit Vacation Benefits Payable $16,500; credit Vacation Benefits Expense $16,500. 
C) Debit Vacation Benefits Payable $660; credit Vacation Benefits Expense $660. 
D) Debit Vacation Benefits Expense $16,500; credit Vacation Benefits Payable $16,500. 
E) Debit Vacation Benefits Expense $660; credit Vacation Benefits Payable $660. 
A) Debit Vacation Benefits Expense $17,160; credit Vacation Benefits Payable $17,160. 
B) Debit Vacation Benefits Payable $16,500; credit Vacation Benefits Expense $16,500. 
C) Debit Vacation Benefits Payable $660; credit Vacation Benefits Expense $660. 
D) Debit Vacation Benefits Expense $16,500; credit Vacation Benefits Payable $16,500. 
E) Debit Vacation Benefits Expense $660; credit Vacation Benefits Payable $660.

Question 8

An employee earned $37,000 during the year working for an employer when the maximum limit for Social Security was $118,500. The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%. The employee's annual FICA taxes amount is:

Accepted Answer

A) $2,830.50. 
B) $1,757.50. 
C) $8,950.50. 
D) $536.50. 
E) $2,294.00. 
A) $2,830.50. 
B) $1,757.50. 
C) $8,950.50. 
D) $536.50. 
E) $2,294.00.

Question 9

Portia Grant is an employee who is paid monthly. For the month of January of the current year, she earned a total of $8,260. The FICA tax for social security is 6.2% of the first $118,500 earned each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The FUTA tax rate of 0.6% and the SUTA tax rate of 5.4% are applied to the first $7,000 of an employee's pay. The amount of federal income tax withheld from her earnings was $1,325.17. What is the total amount of taxes withheld from the Portia's earnings? (Round your intermediate calculations to two decimal places.)

Accepted Answer

A) $1,957.06 
B) $1,722.00 
C) $3,097.17 
D) $2,443.21 
E) $1,495.36 
A) $1,957.06 
B) $1,722.00 
C) $3,097.17 
D) $2,443.21 
E) $1,495.36

Question 10

Times interest earned is calculated by:

Accepted Answer

A) Dividing income before interest expense and income taxes by interest expense. 
B) Dividing interest expense by income before interest expense. 
C) Multiplying interest expense by income. 
D) Dividing income before interest expense by interest expense and income taxes. 
E) Multiplying interest expense by income before interest expense. 
A) Dividing income before interest expense and income taxes by interest expense. 
B) Dividing interest expense by income before interest expense. 
C) Multiplying interest expense by income. 
D) Dividing income before interest expense by interest expense and income taxes. 
E) Multiplying interest expense by income before interest expense.

Question 11

The rate that a state assigns reflecting a company's stability or instability in employing workers is the:

Accepted Answer

A) Pay rate. 
B) Tax withholding rate. 
C) FICA rate. 
D) Credit rating. 
E) Merit rating. 
A) Pay rate. 
B) Tax withholding rate. 
C) FICA rate. 
D) Credit rating. 
E) Merit rating.

Question 12

All of the following statements related to recording warranty expense are true except:

Accepted Answer

A) Recording estimated warranty expense complies with the full disclosure principle. 
B) Warranty costs are probable and the amount can be estimated. 
C) Warranty expense should be recorded in the period when the warranty service is performed. 
D) Recording estimated warranty expense complies with the matching principle. 
E) The seller reports a warranty obligation as a liability. 
A) Recording estimated warranty expense complies with the full disclosure principle. 
B) Warranty costs are probable and the amount can be estimated. 
C) Warranty expense should be recorded in the period when the warranty service is performed. 
D) Recording estimated warranty expense complies with the matching principle. 
E) The seller reports a warranty obligation as a liability.

Question 13

Interest expense is not:

Accepted Answer

A) Likely to stay the same when sales change. 
B) A fixed expense. 
C) A factor in determining a company's borrowing risk. 
D) Incurred on current liabilities. 
E) Likely to fluctuate when sales change. 
A) Likely to stay the same when sales change. 
B) A fixed expense. 
C) A factor in determining a company's borrowing risk. 
D) Incurred on current liabilities. 
E) Likely to fluctuate when sales change.

Question 14

Carson Company faces a probable loss on a pending lawsuit where the amount of the loss is estimated to be $500,000. The journal entry to recognize the potential loss is:

Accepted Answer

A) Debit Lawsuit Payable $500,000, credit Contingent Legal Liability $500,000. 
B) Debit Legal Expense $500,000; credit Lawsuit Payable $500,000. 
C) Debit Contingent Legal Expense $500,000, credit Contingent Legal Liability $500,000. 
D) Debit Prepaid Legal Expense $500,000; credit Contingent Legal Liability $500,000. 
E) No journal entry is required. 
A) Debit Lawsuit Payable $500,000, credit Contingent Legal Liability $500,000. 
B) Debit Legal Expense $500,000; credit Lawsuit Payable $500,000. 
C) Debit Contingent Legal Expense $500,000, credit Contingent Legal Liability $500,000. 
D) Debit Prepaid Legal Expense $500,000; credit Contingent Legal Liability $500,000. 
E) No journal entry is required.

Question 15

The annual Federal Unemployment Tax Return is:

Accepted Answer

A) Form W-4. 
B) Form W-2. 
C) Form 104. 
D) Form 940. 
E) Form 1099. 
A) Form W-4. 
B) Form W-2. 
C) Form 104. 
D) Form 940. 
E) Form 1099.

Question 16

What are known current liabilities? Cite at least two examples of known current liabilities.

Accepted Answer

Known current liabilities are obligation

Question 17

All of the following statements related to current liabilities for U.S. GAAP and IFRS are true except:

Accepted Answer

A) The definitions and characteristics of current liabilities are broadly similar for both U.S. GAAP and IFRS. 
B) Because tax regulatory systems of countries are different, the approach to recording taxes is totally different. 
C) The term provision is typically used under IFRS to refer to what is titled liability under U.S. GAAP. 
D) When there is little uncertainty surrounding current liabilities, both require companies to record them in a similar manner. 
E) When there is a known current obligation that involves an uncertain amount, but one that can be reasonable estimated, both require similar treatment. 
A) The definitions and characteristics of current liabilities are broadly similar for both U.S. GAAP and IFRS. 
B) Because tax regulatory systems of countries are different, the approach to recording taxes is totally different. 
C) The term provision is typically used under IFRS to refer to what is titled liability under U.S. GAAP. 
D) When there is little uncertainty surrounding current liabilities, both require companies to record them in a similar manner. 
E) When there is a known current obligation that involves an uncertain amount, but one that can be reasonable estimated, both require similar treatment.

Question 18

Describe employer responsibilities for reporting payroll taxes. (To the extent possible, reference the form to be filed for each tax.)

Accepted Answer

Employers are required to report FICA ta

Question 19

Required payroll deductions include income taxes, Social Security taxes, pension and health contributions, union dues, and charitable giving.

Accepted Answer

A) True 
 B)False

Question 20

An employer's federal unemployment taxes (FUTA)are reported:

Accepted Answer

A) Semiannually. 
B) Annually. 
C) Monthly. 
D) Weekly. 
E) Quarterly. 
A) Semiannually. 
B) Annually. 
C) Monthly. 
D) Weekly. 
E) Quarterly.

The Form W-2 must be given to employees before January 31 following the year covered by the Form W-2.

A single liability cannot be divided between current and noncurrent liabilities.

A company's income before interest expense and income taxes in 2014 and 2015 is $225,000 and $250,000, respectively. Its interest expense was $45,000 for both years. Calculate the company's times interest earned ratio, and comment on its level of risk.

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

Employees earn vacation pay at the rate of one day per month. During the month of July, 25 employees qualify for one vacation day each. Their average daily wage is $100 per day. What is the amount of vacation benefit expense to be recorded for the month of July?

A liability may exist even if there is uncertainty about whom to pay, when to pay, or how much to pay.

Athena Company's salaried employees earn two weeks of vacation per year. It pays $858,000 in total employee salaries for 52 weeks but its employees work only 50. Record Athena Company's weekly journal entry to record the vacation expense:

An employee earned $37,000 during the year working for an employer when the maximum limit for Social Security was $118,500. The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%. The employee's annual FICA taxes amount is:

Times interest earned is calculated by:

The rate that a state assigns reflecting a company's stability or instability in employing workers is the:

All of the following statements related to recording warranty expense are true except:

Interest expense is not:

Carson Company faces a probable loss on a pending lawsuit where the amount of the loss is estimated to be $500,000. The journal entry to recognize the potential loss is:

The annual Federal Unemployment Tax Return is:

What are known current liabilities? Cite at least two examples of known current liabilities.

All of the following statements related to current liabilities for U.S. GAAP and IFRS are true except:

Describe employer responsibilities for reporting payroll taxes. (To the extent possible, reference the form to be filed for each tax.)

Required payroll deductions include income taxes, Social Security taxes, pension and health contributions, union dues, and charitable giving.

An employer's federal unemployment taxes (FUTA)are reported:

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

Exam 11: Current Liabilities and Payroll Accounting

The Form W-2 must be given to employees before January 31 following the year covered by the Form W-2.

A single liability cannot be divided between current and noncurrent liabilities.

A company's income before interest expense and income taxes in 2014 and 2015 is $225,000 and $250,000, respectively. Its interest expense was $45,000 for both years. Calculate the company's times interest earned ratio, and comment on its level of risk.

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

Employees earn vacation pay at the rate of one day per month. During the month of July, 25 employees qualify for one vacation day each. Their average daily wage is $100 per day. What is the amount of vacation benefit expense to be recorded for the month of July?

A liability may exist even if there is uncertainty about whom to pay, when to pay, or how much to pay.

Athena Company's salaried employees earn two weeks of vacation per year. It pays $858,000 in total employee salaries for 52 weeks but its employees work only 50. Record Athena Company's weekly journal entry to record the vacation expense:

An employee earned $37,000 during the year working for an employer when the maximum limit for Social Security was $118,500. The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%. The employee's annual FICA taxes amount is:

Times interest earned is calculated by:

The rate that a state assigns reflecting a company's stability or instability in employing workers is the:

All of the following statements related to recording warranty expense are true except:

Interest expense is not:

Carson Company faces a probable loss on a pending lawsuit where the amount of the loss is estimated to be $500,000. The journal entry to recognize the potential loss is:

The annual Federal Unemployment Tax Return is:

What are known current liabilities? Cite at least two examples of known current liabilities.

All of the following statements related to current liabilities for U.S. GAAP and IFRS are true except:

Describe employer responsibilities for reporting payroll taxes. (To the extent possible, reference the form to be filed for each tax.)

Required payroll deductions include income taxes, Social Security taxes, pension and health contributions, union dues, and charitable giving.

An employer's federal unemployment taxes (FUTA)are reported:

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