Question 1

The general rule for advertising costs is

Accepted Answer

A)  Advertising costs should be expensed because of the uncertainty of future events 
B)  Advertising costs should be capitalized because of the uncertainty of future events 
C)  Advertising costs should be capitalized except for target advertising which should be expensed. 
D)  None of these are correct 
A)  Advertising costs should be expensed because of the uncertainty of future events 
B)  Advertising costs should be capitalized because of the uncertainty of future events 
C)  Advertising costs should be capitalized except for target advertising which should be expensed. 
D)  None of these are correct

Question 2

To properly recognize the expense associated with compensated absences, a company should

Accepted Answer

A)  Expense these obligations in the period the employee is absent 
B)  Estimate and expense these obligations when a new employee is hired 
C)  Estimate and expense these obligations in the period that the employee earns those days 
D)  Not recognize any expense for compensated absences 
A)  Expense these obligations in the period the employee is absent 
B)  Estimate and expense these obligations when a new employee is hired 
C)  Estimate and expense these obligations in the period that the employee earns those days 
D)  Not recognize any expense for compensated absences

Question 3

When recording the costs associated with a postemployment benefit of a employer that was just laid off in the current period, a debit will be made to

Accepted Answer

A)  Salaries expense for the total estimated cost of the postemployment benefit 
B)  Salaries expense for the current period cost of the unemployment benefit 
C)  Benefits payable for the total estimated cost of the postemployment benefit 
D)  Benefits payable for the current period cost of the unemployment benefit 
A)  Salaries expense for the total estimated cost of the postemployment benefit 
B)  Salaries expense for the current period cost of the unemployment benefit 
C)  Benefits payable for the total estimated cost of the postemployment benefit 
D)  Benefits payable for the current period cost of the unemployment benefit

Question 4

Which of the following items should be reported as an extraordinary item?

Accepted Answer

A)  Gains or losses from major foreign currency revaluations 
B)  The effects of a strike 
C)  Earthquake damage 
D)  Gain or loss on disposal of a business segment 
A)  Gains or losses from major foreign currency revaluations 
B)  The effects of a strike 
C)  Earthquake damage 
D)  Gain or loss on disposal of a business segment

Question 5

Which of the following are reported on the income statement along with their tax effects?

Accepted Answer

A)  Other revenues 
B)  Extraordinary items 
C)  Operating expenses 
D)  Other expenses 
A)  Other revenues 
B)  Extraordinary items 
C)  Operating expenses 
D)  Other expenses

Question 6

Dike Corporation incurred the following losses during 2012:   Ignoring income taxes, what amount of loss should Dike report as extraordinary on its annual income statement?

Accepted Answer

A)  $320,000 
B)  $480,000 
C)  $864,000 
D)  $1,664,000 
A)  $320,000 
B)  $480,000 
C)  $864,000 
D)  $1,664,000

Question 7

During the month of July, Joel Mayer earned $2,000. Joel has been on the payroll all year at a salary of $2,000 per month. Salaries are paid at the end of each month. Assume that FICA taxes are 7.65 percent of wages up to $50,000; state unemployment tax is 5.0 percent of wages up to $13,000; and federal unemployment tax is 0.8 percent of wages up to $13,000. Assume that Joel has voluntary withholdings of $75 (in addition to taxes) and that federal and state income tax withholdings are $300 and $100, respectively. What is the employer's payroll tax expense for the month of July, assuming that Joel Mayer is the only employee?

Accepted Answer

A)  $58 
B)  $211 
C)  $75 
D)  $611 
A)  $58 
B)  $211 
C)  $75 
D)  $611

Question 8

Amy Tan earns $7,200 per month as the only employee of a small shop. FICA taxes on her salary are 7.65 percent of the first $50,000. Federal income taxes are withheld at the rate of 30 percent and state income taxes at the rate of 7 percent. Her employer is subject to 0.8 percent FUTA tax and 3.0 percent SUTA tax.
Prepare the journal entries to be made by her employer for the month of January. (Round to the nearest dollar.)

Accepted Answer

The answer of Amy Tan earns $7,200 per month as...

Question 9

Which of the following is the required treatment of research and development costs under FASB?

Accepted Answer

A)  Research and development costs are expensed as incurred 
B)  Research and development costs are capitalized 
C)  Research costs are expensed and development costs are capitalized 
D)  Research costs are capitalized and development costs are expensed 
A)  Research and development costs are expensed as incurred 
B)  Research and development costs are capitalized 
C)  Research costs are expensed and development costs are capitalized 
D)  Research costs are capitalized and development costs are expensed

Question 10

Which type of pension plan requires a company to place a certain amount of money into a pension fund each year on behalf of the employees?

Accepted Answer

A)  Defined benefit plan 
B)  Defined payment plan 
C)  Defined contribution plan 
D)  Defined employee plan 
A)  Defined benefit plan 
B)  Defined payment plan 
C)  Defined contribution plan 
D)  Defined employee plan

Question 11

During the month of July, Joel Mayer earned $2,000. Joel has been on the payroll all year at a salary of $2,000 per month. Salaries are paid at the end of each month. Assume that FICA taxes are 7.65 percent of wages up to $50,000; state unemployment tax is 5.0 percent of wages up to $13,000; and federal unemployment tax is 0.8 percent of wages up to $13,000. Assume that Joel has voluntary withholdings of $75 (in addition to taxes) and that federal and state income tax withholdings are $300 and $100, respectively. What amount is the check, net of all deductions, that Joel received for his July pay?

Accepted Answer

A)  $1,372 
B)  $1,256 
C)  $1,314 
D)  $1,525 
A)  $1,372 
B)  $1,256 
C)  $1,314 
D)  $1,525

Question 12

The required recording of research and development expenditures has which of the following effects on the financial statements?

Accepted Answer

A)  Understatement of research and development expense 
B)  Understatement of research and development assets 
C)  Overstatement of research and development assets 
D)  None of these are correct 
A)  Understatement of research and development expense 
B)  Understatement of research and development assets 
C)  Overstatement of research and development assets 
D)  None of these are correct

Question 13

John Ackley and Susan Baldwin are employees of Clarion Company. Both John and Susan work 8 hours a day and are paid monthly on the last day of the month. John is paid at a rate of $15 per hour and Susan is paid $12 per hour. John and Susan accrue compensated absences throughout the year at a rate of 1.5 days per month. In March, John missed three days of work due to illness and Susan missed one day of work. Both John and Susan have payroll withholdings of 25%.

Accepted Answer

The answer of John Ackley and Susan Baldwin are employees...

Question 14

Unger Sporting Goods Company sold a pair of skis for cash. It recorded the sale as:   Given this entry, what would be the nature of Account C?

Accepted Answer

A)  Account C is a current liability 
B)  Account C is a long-term liability 
C)  Account C is a revenue 
D)  Account C is an asset 
A)  Account C is a current liability 
B)  Account C is a long-term liability 
C)  Account C is a revenue 
D)  Account C is an asset

Question 15

Which of the following is NOT true regarding taxes deducted from an employee's earnings?

Accepted Answer

A)  These items are expenses to the employer 
B)  These items are liabilities that must be paid to federal and state governments 
C)  These items are credited within the entry to record wage or salary expense 
D)  The employer serves as an agent for the governments for collecting these taxes 
A)  These items are expenses to the employer 
B)  These items are liabilities that must be paid to federal and state governments 
C)  These items are credited within the entry to record wage or salary expense 
D)  The employer serves as an agent for the governments for collecting these taxes

Question 16

During the year, Perez Company earned revenues of $113,625 and incurred $98,000 for various operating expenses. There are 1,250 shares of stock outstanding. Earnings per share is

Accepted Answer

A)  $12.50 
B)  $12.80 
C)  $8.80 
D)  $8.50 
A)  $12.50 
B)  $12.80 
C)  $8.80 
D)  $8.50

Question 17

What makes environmental liabilities unique among contingent liabilities?

Accepted Answer

A)  It is more difficult to estimate the costs 
B)  It is more difficult to estimate the likelihood of a loss 
C)  A company need not disclose environmental liabilities 
D)  All of these are true of environmental liabilities 
A)  It is more difficult to estimate the costs 
B)  It is more difficult to estimate the likelihood of a loss 
C)  A company need not disclose environmental liabilities 
D)  All of these are true of environmental liabilities

Question 18

Earnings per share is equal to

Accepted Answer

A)  Total revenues divided by total shares of capital stock 
B)  Net income divided by total shares of capital stock 
C)  Total expenses divided by total shares of capital stock 
D)  Net income divided by retained earnings 
A)  Total revenues divided by total shares of capital stock 
B)  Net income divided by total shares of capital stock 
C)  Total expenses divided by total shares of capital stock 
D)  Net income divided by retained earnings

Question 19

Sales Taxes Payable is normally classified as a(n)

Accepted Answer

A)  Current liability 
B)  Long-term liability 
C)  Asset 
D)  Expense 
A)  Current liability 
B)  Long-term liability 
C)  Asset 
D)  Expense

Question 20

A contingent liability is recorded by making the appropriate journal entry if the likelihood of a loss from a contingency is

Accepted Answer

A)  Remote 
B)  Reasonably possible 
C)  Probable 
D)  Negligible 
A)  Remote 
B)  Reasonably possible 
C)  Probable 
D)  Negligible

The general rule for advertising costs is

To properly recognize the expense associated with compensated absences, a company should

When recording the costs associated with a postemployment benefit of a employer that was just laid off in the current period, a debit will be made to

Which of the following items should be reported as an extraordinary item?

Which of the following are reported on the income statement along with their tax effects?

Dike Corporation incurred the following losses during 2012: Ignoring income taxes, what amount of loss should Dike report as extraordinary on its annual income statement?

Which of the following is the required treatment of research and development costs under FASB?

Which type of pension plan requires a company to place a certain amount of money into a pension fund each year on behalf of the employees?

The required recording of research and development expenditures has which of the following effects on the financial statements?

Unger Sporting Goods Company sold a pair of skis for cash. It recorded the sale as: Given this entry, what would be the nature of Account C?

Which of the following is NOT true regarding taxes deducted from an employee's earnings?

During the year, Perez Company earned revenues of $113,625 and incurred $98,000 for various operating expenses. There are 1,250 shares of stock outstanding. Earnings per share is

What makes environmental liabilities unique among contingent liabilities?

Earnings per share is equal to

Sales Taxes Payable is normally classified as a(n)

A contingent liability is recorded by making the appropriate journal entry if the likelihood of a loss from a contingency is

Accounting Information: Users and Uses

Financial Statements: An Overview

The Accounting Cycle: The Mechanics of Accounting

Completing the Accounting Cycle

Internal Controls: Ensuring the Integrity of Financial Information

Receivables: Selling a Product or a Service

Inventory and the Cost of Sales

Investments: Property, Plant, and Equipment and Intangible Assets

Financing: Long-Term Liabilities

Financing: Equity

Investments: Debt and Equity Securities

Statement of Cash Flows

Analyzing Financial Statements

Management Accounting and Cost Concepts

Cost Flows and Business Organizations

Activity-Based Costing

Budgeting and Control

Controlling Cost and Profit

Inventory Management and Variable and Absorption Costing

Cost Behavior and Decisions Using C-V-P Analysis

Relevant Information and Decisions

Capital Investment Decisions

New Measures of Performance

Filters

Exam 8: Completing the Operating Cycle

The general rule for advertising costs is

To properly recognize the expense associated with compensated absences, a company should

When recording the costs associated with a postemployment benefit of a employer that was just laid off in the current period, a debit will be made to

Which of the following items should be reported as an extraordinary item?

Which of the following are reported on the income statement along with their tax effects?

Dike Corporation incurred the following losses during 2012: Ignoring income taxes, what amount of loss should Dike report as extraordinary on its annual income statement?

Which of the following is the required treatment of research and development costs under FASB?

Which type of pension plan requires a company to place a certain amount of money into a pension fund each year on behalf of the employees?

The required recording of research and development expenditures has which of the following effects on the financial statements?

Unger Sporting Goods Company sold a pair of skis for cash. It recorded the sale as: Given this entry, what would be the nature of Account C?

Which of the following is NOT true regarding taxes deducted from an employee's earnings?

During the year, Perez Company earned revenues of $113,625 and incurred $98,000 for various operating expenses. There are 1,250 shares of stock outstanding. Earnings per share is

What makes environmental liabilities unique among contingent liabilities?

Earnings per share is equal to

Sales Taxes Payable is normally classified as a(n)

A contingent liability is recorded by making the appropriate journal entry if the likelihood of a loss from a contingency is

Accounting Information: Users and Uses

Financial Statements: An Overview

The Accounting Cycle: The Mechanics of Accounting

Completing the Accounting Cycle

Internal Controls: Ensuring the Integrity of Financial Information

Receivables: Selling a Product or a Service

Inventory and the Cost of Sales

Investments: Property, Plant, and Equipment and Intangible Assets

Financing: Long-Term Liabilities

Financing: Equity

Investments: Debt and Equity Securities

Statement of Cash Flows

Analyzing Financial Statements

Management Accounting and Cost Concepts

Cost Flows and Business Organizations

Activity-Based Costing

Budgeting and Control

Controlling Cost and Profit

Inventory Management and Variable and Absorption Costing

Cost Behavior and Decisions Using C-V-P Analysis

Relevant Information and Decisions

Capital Investment Decisions

New Measures of Performance

Filters