Question 1

Accrued liabilities are expenses that have not yet been paid.

Accepted Answer

A) True 
 B)False

Question 2

The payment due at maturity on a $489.52, 8% note, dated May 28 and due July 31 is __________ using a 360-day year to compute interest.

Accepted Answer

A)  $496.48 
B)  $493.89 
C)  $495.56 
D)  $495.82 
A)  $496.48 
B)  $493.89 
C)  $495.56 
D)  $495.82

Question 3

On December 31 of this year, a company purchases a building by paying $50,000 and executing a mortgage payable of $450,000. The mortgage is payable in 10 equal principle payments, plus interest, at the end of each of the next 10 years. How will the mortgage be reported on the December 31 balance sheet at the end of the first year?

Accepted Answer

A)  Current liability of $450,000 
B)  Current liability of $90,000 and long-term liability of $360,000 
C)  Current liability of $45,000 and long-term liability of $405,000 
D)  Long-term liability of $450,000 
A)  Current liability of $450,000 
B)  Current liability of $90,000 and long-term liability of $360,000 
C)  Current liability of $45,000 and long-term liability of $405,000 
D)  Long-term liability of $450,000

Question 4

Which of the following would be a reason that the stockholders of a company would issue bonds rather than stock to finance expansion?

Accepted Answer

A)  Leveraged debt is always more advantageous than additional stock. 
B)  The value of their stock will inevitably decrease. 
C)  Dividends must be paid each year even if the company is not profitable. 
D)  Additional shares of stock might decrease earnings per share. 
A)  Leveraged debt is always more advantageous than additional stock. 
B)  The value of their stock will inevitably decrease. 
C)  Dividends must be paid each year even if the company is not profitable. 
D)  Additional shares of stock might decrease earnings per share.

Question 5

Liabilities are often created as a result of an expense incurred by a company. Which of the following liabilities is NOT the result of an expense incurred by the company?

Accepted Answer

A)  Sales tax payable 
B)  State unemployment tax payable 
C)  Federal unemployment tax payable 
D)  Estimated warranty payable 
A)  Sales tax payable 
B)  State unemployment tax payable 
C)  Federal unemployment tax payable 
D)  Estimated warranty payable

Question 6

Sending in payroll forms such as the 941represents what part of internal control?

Accepted Answer

A)  Paying the correct amount of payroll tax 
B)  Accurately computing gross and net pay 
C)  Filing government forms on time 
D)  Separating payroll duties 
A)  Paying the correct amount of payroll tax 
B)  Accurately computing gross and net pay 
C)  Filing government forms on time 
D)  Separating payroll duties

Question 7

A bond issued at par has no discount or premium.

Accepted Answer

A) True 
 B)False

Question 8

Archie's had sales of $6,758. The state sales tax rate is 7%. All sales are cash. What amount will be debited to Cash?

Accepted Answer

A)  $6,758.00 
B)  $7,231.06 
C)  $ 473.06 
D)  Cash will be credited and not debited. 
A)  $6,758.00 
B)  $7,231.06 
C)  $ 473.06 
D)  Cash will be credited and not debited.

Question 9

A company has 24 employees who are paid on a monthly basis. For the most recent month, gross earnings were $78,000, of which $27,000 is subject to employment taxes. The federal unemployment tax rate is.8% and the state unemployment rate is 5.4%. Federal income taxes are withheld at the rate of 20% of total earnings. All earnings are subject to FICA taxes of 8%.
What is the employer's total payroll taxes expense for the month?

Accepted Answer

A)  $23,514 
B)  $ 7,914 
C)  $12,480 
D)  $ 6,240 
A)  $23,514 
B)  $ 7,914 
C)  $12,480 
D)  $ 6,240

Question 10

Ace Appliances sells dishwashers with a 3-year warranty. They expect 3% of the dishwashers to need repairs in year 1, 7% in year 2 and 15% in year 3. They sell 500 dishwashers in 2009 with the warranty in effect from 2009 to 2011. Each repair is estimated at $40. If 4% of the dishwashers need repairs in 2009, what is the 2009 warranty expense?

Accepted Answer

A)  $600 
B)  $800 
C)  $0 
D)  Nothing is recorded until the end of 2011. 
A)  $600 
B)  $800 
C)  $0 
D)  Nothing is recorded until the end of 2011.

Question 11

How is discount on bonds payable treated on the balance sheet?

Accepted Answer

A)  Discount on bonds payable is a contra asset account. 
B)  Discount on bonds payable is a contra stockholders' equity account. 
C)  Discount on bonds payable is a contra account to bonds payable. 
D)  Discount on bonds payable is an adjunct account to bonds payable. 
A)  Discount on bonds payable is a contra asset account. 
B)  Discount on bonds payable is a contra stockholders' equity account. 
C)  Discount on bonds payable is a contra account to bonds payable. 
D)  Discount on bonds payable is an adjunct account to bonds payable.

Question 12

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

Accepted Answer

A)  To avoid writing a paycheck to a fictitious person 
B)  To prove an employee's hours worked 
C)  To separate the duties of human resources personnel and accounting personnel 
D)  To improve efficiency 
A)  To avoid writing a paycheck to a fictitious person 
B)  To prove an employee's hours worked 
C)  To separate the duties of human resources personnel and accounting personnel 
D)  To improve efficiency

Question 13

Which of the following columns is NOT found on a payroll record?

Accepted Answer

A)  Check number 
B)  Federal unemployment tax 
C)  Total deductions 
D)  FICA tax 
A)  Check number 
B)  Federal unemployment tax 
C)  Total deductions 
D)  FICA tax

Question 14

Debentures are unsecured bonds backed only by the good faith of the borrower.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following are important internal controls for payroll?

Accepted Answer

A)  Controls to safeguard against paying employees more than other employers pay their employees 
B)  Controls for efficiency 
C)  Controls to safeguard payroll disbursements 
D)  Both B and C are important controls for payroll 
A)  Controls to safeguard against paying employees more than other employers pay their employees 
B)  Controls for efficiency 
C)  Controls to safeguard payroll disbursements 
D)  Both B and C are important controls for payroll

Question 16

In the current year, a company sells 1,000 units of a product for $100 each. Each product is sold with a one-year warranty. It is estimated that warranty costs will be 10% of the cost of the product. Historically, 60% of the warranty repairs are completed in the year of sale and 40% of the warranty repairs are completed in the year after the sale. What is the correct amount of warranty expense for the current year?

Accepted Answer

A)  $10,000 
B)  $ 6,000 
C)  $ 4,000 
D)  $12,000 
A)  $10,000 
B)  $ 6,000 
C)  $ 4,000 
D)  $12,000

Question 17

Ace Appliances sells dishwashers with a 3-year warranty. They expect 3% of the dishwashers to need repairs in year 1, 7% in year 2 and 15% in year 3. They sell 500 dishwashers in 2009 with the warranty in effect from 2009 to 2011. Each repair is estimated at $40. What is the total estimated warranty payable for Ace regarding the sales in 2009?

Accepted Answer

A)  $5,000 
B)  $ 600 
C)  $1,400 
D)  $3,000 
A)  $5,000 
B)  $ 600 
C)  $1,400 
D)  $3,000

Question 18

The records of Panhandle Greenhouses include the following accounts. Prepare the current liabilities and long-term liabilities section of the company's balance sheet.
 $$\begin{array} { | l | r | } 
\hline \text { Salary payable } & 8,000 \
\hline \text { Bonds payable, long-term } & 150,000 \
\hline \text { Premium on bonds payable - (all long-term) } & 15,000 \
\hline \text { Unearned service revenue } & 5,000 \
\hline \text { Common stock, no-par } & 100,000 \
\hline \text { Mortgage note payable, long-term } & 88,000 \
\hline \text { Accounts payable } & 66,000 \
\hline \text { Bonds payable, current installment } & 10,000 \
\hline \text { Interest payable } & 15,000 \
\hline
\end{array}$$

Accepted Answer

The answer of The records of Panhandle Greenhouses include the...

Question 19

Which of the following is NOT a control for safeguarding payroll disbursements?

Accepted Answer

A)  A formal timekeeping system is used. 
B)  Personnel department employees' and payroll department employees' responsibilities are separated. 
C)  Personnel department employees and payroll department employees have combined responsibilities. 
D)  A photo identification is required when payroll checks are distributed. 
A)  A formal timekeeping system is used. 
B)  Personnel department employees' and payroll department employees' responsibilities are separated. 
C)  Personnel department employees and payroll department employees have combined responsibilities. 
D)  A photo identification is required when payroll checks are distributed.

Question 20

Adequate separation of duties would prohibit the payroll department from recording the transactions related to payroll.

Accepted Answer

A) True 
 B)False

Accrued liabilities are expenses that have not yet been paid.

The payment due at maturity on a $489.52, 8% note, dated May 28 and due July 31 is __________ using a 360-day year to compute interest.

Which of the following would be a reason that the stockholders of a company would issue bonds rather than stock to finance expansion?

Liabilities are often created as a result of an expense incurred by a company. Which of the following liabilities is NOT the result of an expense incurred by the company?

Sending in payroll forms such as the 941represents what part of internal control?

A bond issued at par has no discount or premium.

Archie's had sales of $6,758. The state sales tax rate is 7%. All sales are cash. What amount will be debited to Cash?

How is discount on bonds payable treated on the balance sheet?

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

Which of the following columns is NOT found on a payroll record?

Debentures are unsecured bonds backed only by the good faith of the borrower.

Which of the following are important internal controls for payroll?

Which of the following is NOT a control for safeguarding payroll disbursements?

Adequate separation of duties would prohibit the payroll department from recording the transactions related to payroll.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandising Inventory

Internal Control and Cash

Receivables

Plant Assets and Intangibles

Corporations: Paid-In Capital and the Balance Sheet

Corporations: Effects on Retained Earnings and the Income Statement

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Management Accounting

Job Order and Process Costing

Appendix: Process Costing

Activity-Based Costing and Other Cost Management Tools

Cost-Volume-Profit Analysis

Short-Term Business Decisions

Capital Investment Decisions and the Time Value of Money

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Performance Evaluation and the Balanced Scorecard

Filters

Exam 10: Current Liabilities, Payroll, and Long-Term Liabilities

Accrued liabilities are expenses that have not yet been paid.

The payment due at maturity on a $489.52, 8% note, dated May 28 and due July 31 is __________ using a 360-day year to compute interest.

Which of the following would be a reason that the stockholders of a company would issue bonds rather than stock to finance expansion?

Liabilities are often created as a result of an expense incurred by a company. Which of the following liabilities is NOT the result of an expense incurred by the company?

Sending in payroll forms such as the 941represents what part of internal control?

A bond issued at par has no discount or premium.

Archie's had sales of $6,758. The state sales tax rate is 7%. All sales are cash. What amount will be debited to Cash?

How is discount on bonds payable treated on the balance sheet?

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

Which of the following columns is NOT found on a payroll record?

Debentures are unsecured bonds backed only by the good faith of the borrower.

Which of the following are important internal controls for payroll?

Which of the following is NOT a control for safeguarding payroll disbursements?

Adequate separation of duties would prohibit the payroll department from recording the transactions related to payroll.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandising Inventory

Internal Control and Cash

Receivables

Plant Assets and Intangibles

Corporations: Paid-In Capital and the Balance Sheet

Corporations: Effects on Retained Earnings and the Income Statement

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Management Accounting

Job Order and Process Costing

Appendix: Process Costing

Activity-Based Costing and Other Cost Management Tools

Cost-Volume-Profit Analysis

Short-Term Business Decisions

Capital Investment Decisions and the Time Value of Money

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Performance Evaluation and the Balanced Scorecard

Filters