Question 1

Which are generally paid for exceptional performance?

Accepted Answer

A) Salaries 
B) Wages 
C) Bonuses 
D) Commissions 
A) Salaries 
B) Wages 
C) Bonuses 
D) Commissions

Question 2

The tax rate on the HI (Medicare)portion of FICA is:

Accepted Answer

A) 7.65%. 
B) 1.45%. 
C) 6.20%. 
D) 0.80%. 
A) 7.65%. 
B) 1.45%. 
C) 6.20%. 
D) 0.80%.

Question 3

A $430,000 issue of bonds that sold for $403,000 matures on August 1, 2020. The journal entry to record the payment of the bond on the maturity date is to:

Accepted Answer

A) debit Cash, $430,000; credit Bonds payable, $430,000. 
B) debit Bonds payable, $430,000; credit Cash, $430,000. 
C) debit Cash, $403,000; credit Bonds payable, $403,000. 
D) debit Bonds payable, $403,000; credit Cash, $403,000. 
A) debit Cash, $430,000; credit Bonds payable, $430,000. 
B) debit Bonds payable, $430,000; credit Cash, $430,000. 
C) debit Cash, $403,000; credit Bonds payable, $403,000. 
D) debit Bonds payable, $403,000; credit Cash, $403,000.

Question 4

Stella Corp. has the following liabilities: $30,000 salaries payable, $70,000 accounts payable, $180,000 notes payable (to be made in 10 equal annual payments), and warranty payable $22,000 (all of Stella's products come with a 90-day manufacturer warranty). The total current liabilities is:

Accepted Answer

A) $100,000 
B) $122,000 
C) $140,000 
D) $302,000 
A) $100,000 
B) $122,000 
C) $140,000 
D) $302,000

Question 5

Richard is paid a salary of $9,000. At the end of November, his cumulative gross earnings were $95,000. How much will his employer take out for the HI portion of social security for December? (Round your final answer to the nearest cent.)

Accepted Answer

A) $558.00 
B) $688.50 
C) $130.50 
D) $486.00 
A) $558.00 
B) $688.50 
C) $130.50 
D) $486.00

Question 6

Discount on bonds payable and Premium on bonds payable are examples of:

Accepted Answer

A) contra-accounts. 
B) companion accounts. 
C) estimated accounts. 
D) equity accounts. 
A) contra-accounts. 
B) companion accounts. 
C) estimated accounts. 
D) equity accounts.

Question 7

Metropolitan Masonry had sales on account of $7,700 which were subject to state sales tax of 10%. The entry to record the sales would be to:

Accepted Answer

A) debit Accounts Receivable, $8,470; credit Sales revenue, $7,700; credit Sales tax payable, $770. 
B) debit Accounts Receivable, $8,470; credit Sale revenue, $8,470. 
C) debit Accounts Receivable, $7,700; credit Sales revenue, $7,700. 
D) debit Accounts Receivable, $7,700; debit Sales tax payable, $770; credit Sales revenue, $8,470. 
A) debit Accounts Receivable, $8,470; credit Sales revenue, $7,700; credit Sales tax payable, $770. 
B) debit Accounts Receivable, $8,470; credit Sale revenue, $8,470. 
C) debit Accounts Receivable, $7,700; credit Sales revenue, $7,700. 
D) debit Accounts Receivable, $7,700; debit Sales tax payable, $770; credit Sales revenue, $8,470.

Question 8

A ratio which measures a company's ability to pay interest on its debt is called the:

Accepted Answer

A) debt ratio. 
B) current ratio. 
C) interest coverage ratio. 
D) acid-test ratio. 
A) debt ratio. 
B) current ratio. 
C) interest coverage ratio. 
D) acid-test ratio.

Question 9

On October 31, 2016, Renoir, Inc. recorded their semi-annual bond interest expense that contained a credit to Discount on bonds payable of $2,600. The adjusting entry on December 31, 2016 will show a credit to Discount on bonds payable of: (Round any intermediary calculations to two decimal places and your final answer to the nearest dollar.)

Accepted Answer

A) $2,600 
B) $1,742 
C) $1,300 
D) $858 
A) $2,600 
B) $1,742 
C) $1,300 
D) $858

Question 10

Which of the following would be considered an estimated liability?

Accepted Answer

A) Notes payable 
B) Warranties payable 
C) Pending litigation 
D) Sales tax payable 
A) Notes payable 
B) Warranties payable 
C) Pending litigation 
D) Sales tax payable

Question 11

If the market rate of interest is greater than the bond's stated rate of interest, the bond will be issued at:

Accepted Answer

A) a discount. 
B) par. 
C) a premium. 
D) maturity value. 
A) a discount. 
B) par. 
C) a premium. 
D) maturity value.

Question 12

Bach Instruments had total assets of $600,000; total liabilities of $270,000; and total Stockholders' Equity of $330,000. Bach's debt ratio is: (Round your final answer to the nearest whole number.)

Accepted Answer

A) 82%. 
B) 55%. 
C) 45%. 
D) 38%. 
A) 82%. 
B) 55%. 
C) 45%. 
D) 38%.

Question 13

A company's ability to pay the interest on its debt is often measured with the interest coverage ratio.

Accepted Answer

A) True 
 B)False

Question 14

Contingent liabilities represent actual-NOT potential-obligations.

Accepted Answer

A) True 
 B)False

Question 15

S&C Roofing had sales on account of $32,500 which were subject to state sales tax of 8%. The entry to record the sales would be to:

Accepted Answer

A) debit Accounts Receivable, $32,500; credit Sales revenue, $32,500. 
B) debit Accounts Receivable, $35,100; credit Sale revenue, $35,100. 
C) debit Accounts Receivable, $32,500; debit Sales tax payable, $2,600; credit Sales revenue, $35,100. 
D) debit Accounts Receivable, $35,100; credit Sales revenue, $32,500; credit Sales tax payable, $2,600. 
A) debit Accounts Receivable, $32,500; credit Sales revenue, $32,500. 
B) debit Accounts Receivable, $35,100; credit Sale revenue, $35,100. 
C) debit Accounts Receivable, $32,500; debit Sales tax payable, $2,600; credit Sales revenue, $35,100. 
D) debit Accounts Receivable, $35,100; credit Sales revenue, $32,500; credit Sales tax payable, $2,600.

Question 16

Under a capital lease, the title of an asset remains with the lessor at the end of the lease.

Accepted Answer

A) True 
 B)False

Question 17

A $260,000 issue of bonds that sold for $255,000 matures on June 25, 2020. The journal entry to record the payment of the bond on the maturity date is to:

Accepted Answer

A) debit Cash, $260,000; credit Bonds payable, $260,000. 
B) debit Bonds payable, $260,000; credit Cash, $260,000. 
C) debit Cash, $255,000; credit Bonds payable, $255,000. 
D) debit Bonds payable, $255,000; credit Cash, $255,000. 
A) debit Cash, $260,000; credit Bonds payable, $260,000. 
B) debit Bonds payable, $260,000; credit Cash, $260,000. 
C) debit Cash, $255,000; credit Bonds payable, $255,000. 
D) debit Bonds payable, $255,000; credit Cash, $255,000.

Question 18

Southeast Plumbing had cash sales for the month totaling $732,000. Southeast offers a 6-month warranty on its services. If Southeast estimates warranty claims will equal 3% of sales, the journal entry to record the estimated warranty expense for the month is:

Accepted Answer

A) debit Warranty expense, $21,960; credit Cash, $21,960. 
B) debit Warranty expense, $21,960; credit Estimated warranty payable, $21,960. 
C) debit Warranty expense, $21,960; credit Sales revenue, $21,960. 
D) debit Estimated warranty payable, $21,960; credit Warranty expense, $21,960. 
A) debit Warranty expense, $21,960; credit Cash, $21,960. 
B) debit Warranty expense, $21,960; credit Estimated warranty payable, $21,960. 
C) debit Warranty expense, $21,960; credit Sales revenue, $21,960. 
D) debit Estimated warranty payable, $21,960; credit Warranty expense, $21,960.

Question 19

Lionworks Inc. signed a $57,000 8% 30-year installment note on November 1, 2016. The note requires semiannual payments of $950 plus interest on May 1 and November 1 of each year. How will Lionworks classify this loan on its December 31, 2016 Balance Sheet?

Accepted Answer

A) Current Portion of Long-term debt, $0; Long-term debt, $57,000 
B) Current Portion of Long-term debt, $57,000; Long-term debt, $0 
C) Current Portion of Long-term debt, $950; Long-term debt, $56,050 
D) Current Portion of Long-term debt, $1,900; Long-term debt, $55,100 
A) Current Portion of Long-term debt, $0; Long-term debt, $57,000 
B) Current Portion of Long-term debt, $57,000; Long-term debt, $0 
C) Current Portion of Long-term debt, $950; Long-term debt, $56,050 
D) Current Portion of Long-term debt, $1,900; Long-term debt, $55,100

Question 20

The disclosure of a contingent liability only in the footnotes designates that the possibility of an actual obligation occurring is:

Accepted Answer

A) remote. 
B) possible. 
C) probable. 
D) certain. 
A) remote. 
B) possible. 
C) probable. 
D) certain.

Which are generally paid for exceptional performance?

The tax rate on the HI (Medicare)portion of FICA is:

A $430,000 issue of bonds that sold for $403,000 matures on August 1, 2020. The journal entry to record the payment of the bond on the maturity date is to:

Stella Corp. has the following liabilities: $30,000 salaries payable, $70,000 accounts payable, $180,000 notes payable (to be made in 10 equal annual payments), and warranty payable $22,000 (all of Stella's products come with a 90-day manufacturer warranty). The total current liabilities is:

Richard is paid a salary of $9,000. At the end of November, his cumulative gross earnings were $95,000. How much will his employer take out for the HI portion of social security for December? (Round your final answer to the nearest cent.)

Discount on bonds payable and Premium on bonds payable are examples of:

Metropolitan Masonry had sales on account of $7,700 which were subject to state sales tax of 10%. The entry to record the sales would be to:

A ratio which measures a company's ability to pay interest on its debt is called the:

Which of the following would be considered an estimated liability?

If the market rate of interest is greater than the bond's stated rate of interest, the bond will be issued at:

Bach Instruments had total assets of $600,000; total liabilities of $270,000; and total Stockholders' Equity of $330,000. Bach's debt ratio is: (Round your final answer to the nearest whole number.)

A company's ability to pay the interest on its debt is often measured with the interest coverage ratio.

Contingent liabilities represent actual-NOT potential-obligations.

S&C Roofing had sales on account of $32,500 which were subject to state sales tax of 8%. The entry to record the sales would be to:

Under a capital lease, the title of an asset remains with the lessor at the end of the lease.

A $260,000 issue of bonds that sold for $255,000 matures on June 25, 2020. The journal entry to record the payment of the bond on the maturity date is to:

Southeast Plumbing had cash sales for the month totaling $732,000. Southeast offers a 6-month warranty on its services. If Southeast estimates warranty claims will equal 3% of sales, the journal entry to record the estimated warranty expense for the month is:

Lionworks Inc. signed a $57,000 8% 30-year installment note on November 1, 2016. The note requires semiannual payments of $950 plus interest on May 1 and November 1 of each year. How will Lionworks classify this loan on its December 31, 2016 Balance Sheet?

The disclosure of a contingent liability only in the footnotes designates that the possibility of an actual obligation occurring is:

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Accounting for a Merchandising Business

Inventory

The Challenges of Accounting: Standards, Internal Control, Audits, Fraud, and Ethics

Cash and Receivables

Long-Term and Other Assets

Corporations: Paid-In Capital and Retained Earnings

The Statement of Cash Flows

Financial Statement Analysis

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Exam 9: Current Liabilities and Long-Term Debt

Which are generally paid for exceptional performance?

The tax rate on the HI (Medicare)portion of FICA is:

A $430,000 issue of bonds that sold for $403,000 matures on August 1, 2020. The journal entry to record the payment of the bond on the maturity date is to:

Stella Corp. has the following liabilities: $30,000 salaries payable, $70,000 accounts payable, $180,000 notes payable (to be made in 10 equal annual payments), and warranty payable $22,000 (all of Stella's products come with a 90-day manufacturer warranty). The total current liabilities is:

Richard is paid a salary of $9,000. At the end of November, his cumulative gross earnings were $95,000. How much will his employer take out for the HI portion of social security for December? (Round your final answer to the nearest cent.)

Discount on bonds payable and Premium on bonds payable are examples of:

Metropolitan Masonry had sales on account of $7,700 which were subject to state sales tax of 10%. The entry to record the sales would be to:

A ratio which measures a company's ability to pay interest on its debt is called the:

Which of the following would be considered an estimated liability?

If the market rate of interest is greater than the bond's stated rate of interest, the bond will be issued at:

Bach Instruments had total assets of $600,000; total liabilities of $270,000; and total Stockholders' Equity of $330,000. Bach's debt ratio is: (Round your final answer to the nearest whole number.)

A company's ability to pay the interest on its debt is often measured with the interest coverage ratio.

Contingent liabilities represent actual-NOT potential-obligations.

S&C Roofing had sales on account of $32,500 which were subject to state sales tax of 8%. The entry to record the sales would be to:

Under a capital lease, the title of an asset remains with the lessor at the end of the lease.

A $260,000 issue of bonds that sold for $255,000 matures on June 25, 2020. The journal entry to record the payment of the bond on the maturity date is to:

Southeast Plumbing had cash sales for the month totaling $732,000. Southeast offers a 6-month warranty on its services. If Southeast estimates warranty claims will equal 3% of sales, the journal entry to record the estimated warranty expense for the month is:

Lionworks Inc. signed a $57,000 8% 30-year installment note on November 1, 2016. The note requires semiannual payments of $950 plus interest on May 1 and November 1 of each year. How will Lionworks classify this loan on its December 31, 2016 Balance Sheet?

The disclosure of a contingent liability only in the footnotes designates that the possibility of an actual obligation occurring is:

Business, Accounting, and You

Analyzing and Recording Business Transactions

Adjusting and Closing Entries

Accounting for a Merchandising Business

Inventory

The Challenges of Accounting: Standards, Internal Control, Audits, Fraud, and Ethics

Cash and Receivables

Long-Term and Other Assets

Corporations: Paid-In Capital and Retained Earnings

The Statement of Cash Flows

Financial Statement Analysis

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