Question 1

A $300,000 bond issue sold at 105 will cost:

Accepted Answer

A) $300,000. 
B) $315,000. 
C) $285.000. 
D) whatever cost is negotiated. 
A) $300,000. 
B) $315,000. 
C) $285.000. 
D) whatever cost is negotiated.

Question 2

A $10,000 bond issue with a stated rate of interest of 7%,when the market rate of interest is 8%,means that the bond will be sold for:

Accepted Answer

A) $10,000. 
B) more than $10,000. 
C) less than $10,000. 
D) the maturity value. 
A) $10,000. 
B) more than $10,000. 
C) less than $10,000. 
D) the maturity value.

Question 3

According to the matching principle,warranty expense must always be recorded in the same period as the related revenue.

Accepted Answer

A) True 
 B)False

Question 4

The disclosure of a contingent liability in the footnotes and on the Balance Sheet indicates that the potential for the obligation occurring is:

Accepted Answer

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

Question 5

Bonds that are backed by collateral are:

Accepted Answer

A) unsecured bonds. 
B) convertible bonds. 
C) callable bonds. 
D) secured bonds. 
A) unsecured bonds. 
B) convertible bonds. 
C) callable bonds. 
D) secured bonds.

Question 6

During the month,Evergreen Roofing settled $300 in warranty claims by replacing the defective flashing.Evergreen uses an estimated warranty account.The journal entry to record the settled claims would have been:

Accepted Answer

A) debit Estimated Warranty Payable $300;credit Cash $300. 
B) debit Estimated Warranty Payable $300;credit Inventory $300. 
C) debit Warranty Expense $300;credit Estimated Warranty Payable $300. 
D) debit Warranty Expense $300;credit Cash $300. 
A) debit Estimated Warranty Payable $300;credit Cash $300. 
B) debit Estimated Warranty Payable $300;credit Inventory $300. 
C) debit Warranty Expense $300;credit Estimated Warranty Payable $300. 
D) debit Warranty Expense $300;credit Cash $300.

Question 7

TNT Construction had cash sales for the month of June totaling $43,700.TNT offers a 1-year warranty on its construction services.If TNT estimates warranty claims will equal 5% of sales,the journal entry to record the estimated warranty expense for the month is:

Accepted Answer

A) debit Warranty expense,$2,185;credit Cash,$2,185. 
B) debit Estimated warranty payable,$2,185;credit Warranty expense,$2,185. 
C) debit Warranty expense,$2,185;credit Estimated warranty payable,$2,185. 
D) debit Warranty expense,$2,185;credit Sales revenue,$2,185. 
A) debit Warranty expense,$2,185;credit Cash,$2,185. 
B) debit Estimated warranty payable,$2,185;credit Warranty expense,$2,185. 
C) debit Warranty expense,$2,185;credit Estimated warranty payable,$2,185. 
D) debit Warranty expense,$2,185;credit Sales revenue,$2,185.

Question 8

The majority of a company's liabilities are estimated liabilities.

Accepted Answer

A) True 
 B)False

Question 9

The rate of interest that is printed on the bond is called the ________ rate of interest.

Accepted Answer

A) stated 
B) market 
C) variable 
D) maturity 
A) stated 
B) market 
C) variable 
D) maturity

Question 10

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 11

The current portion of long-term debt represents the principal and interest payments on long-term installment obligations that are due within one year.

Accepted Answer

A) True 
 B)False

Question 12

A W-4 filled out by the employee does not designate their:

Accepted Answer

A) marital status. 
B) withholding allowances. 
C) address. 
D) age. 
A) marital status. 
B) withholding allowances. 
C) address. 
D) age.

Question 13

Accounts Payable is generally listed first under long-term debt.

Accepted Answer

A) True 
 B)False

Question 14

The maximum tax credit an employer can get for FUTA if they pay unemployment taxes to a state is:

Accepted Answer

A) 6)20%. 
B) 5)40%. 
C) 0)80%. 
D) 7)65%. 
A) 6)20%. 
B) 5)40%. 
C) 0)80%. 
D) 7)65%.

Question 15

The Discount on Bonds Payable account is known as an adjunct account.

Accepted Answer

A) True 
 B)False

Question 16

A good internal control for payroll is for the Human Resource Department to be in charge of distributing paychecks to employees.

Accepted Answer

A) True 
 B)False

Question 17

A contingent liability arises because of a past event,but is dependent upon a future event.

Accepted Answer

A) True 
 B)False

Question 18

During the month,TNT Construction paid $278 to settle warranty claims.TNT uses an estimated warranty account.The journal entry to record the claims payment would have been:

Accepted Answer

A) debit Warranty expense,$278;credit Cash,$278. 
B) debit Warranty expense,$278;credit Estimated warranty payable,$278. 
C) debit Estimated warranty payable,278;credit Warranty expense,$278. 
D) debit Estimated warranty payable,$278;credit Cash,$278. 
A) debit Warranty expense,$278;credit Cash,$278. 
B) debit Warranty expense,$278;credit Estimated warranty payable,$278. 
C) debit Estimated warranty payable,278;credit Warranty expense,$278. 
D) debit Estimated warranty payable,$278;credit Cash,$278.

Question 19

TLR Productions reported Interest expense of $8,300,Income tax expense of $26,400 and Net income of $88,700.TLR's interest coverage ratio is (rounded to three decimals):

Accepted Answer

A) 13.867. 
B) 14.867. 
C) 0)072. 
D) 0)067. 
A) 13.867. 
B) 14.867. 
C) 0)072. 
D) 0)067.

Question 20

Which of the following would NOT be a required payroll deduction for an employee?

Accepted Answer

A) FICA 
B) 401(K)retirement 
C) Federal income tax 
D) State income tax 
A) FICA 
B) 401(K)retirement 
C) Federal income tax 
D) State income tax

A $300,000 bond issue sold at 105 will cost:

A $10,000 bond issue with a stated rate of interest of 7%,when the market rate of interest is 8%,means that the bond will be sold for:

According to the matching principle,warranty expense must always be recorded in the same period as the related revenue.

The disclosure of a contingent liability in the footnotes and on the Balance Sheet indicates that the potential for the obligation occurring is:

Bonds that are backed by collateral are:

During the month,Evergreen Roofing settled $300 in warranty claims by replacing the defective flashing.Evergreen uses an estimated warranty account.The journal entry to record the settled claims would have been:

TNT Construction had cash sales for the month of June totaling $43,700.TNT offers a 1-year warranty on its construction services.If TNT estimates warranty claims will equal 5% of sales,the journal entry to record the estimated warranty expense for the month is:

The majority of a company's liabilities are estimated liabilities.

The rate of interest that is printed on the bond is called the ________ rate of interest.

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

The current portion of long-term debt represents the principal and interest payments on long-term installment obligations that are due within one year.

A W-4 filled out by the employee does not designate their:

Accounts Payable is generally listed first under long-term debt.

The maximum tax credit an employer can get for FUTA if they pay unemployment taxes to a state is:

The Discount on Bonds Payable account is known as an adjunct account.

A good internal control for payroll is for the Human Resource Department to be in charge of distributing paychecks to employees.

A contingent liability arises because of a past event,but is dependent upon a future event.

During the month,TNT Construction paid $278 to settle warranty claims.TNT uses an estimated warranty account.The journal entry to record the claims payment would have been:

TLR Productions reported Interest expense of $8,300,Income tax expense of $26,400 and Net income of $88,700.TLR's interest coverage ratio is (rounded to three decimals):

Which of the following would NOT be a required payroll deduction for an employee?

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

A $300,000 bond issue sold at 105 will cost:

A $10,000 bond issue with a stated rate of interest of 7%,when the market rate of interest is 8%,means that the bond will be sold for:

According to the matching principle,warranty expense must always be recorded in the same period as the related revenue.

The disclosure of a contingent liability in the footnotes and on the Balance Sheet indicates that the potential for the obligation occurring is:

Bonds that are backed by collateral are:

During the month,Evergreen Roofing settled $300 in warranty claims by replacing the defective flashing.Evergreen uses an estimated warranty account.The journal entry to record the settled claims would have been:

TNT Construction had cash sales for the month of June totaling $43,700.TNT offers a 1-year warranty on its construction services.If TNT estimates warranty claims will equal 5% of sales,the journal entry to record the estimated warranty expense for the month is:

The majority of a company's liabilities are estimated liabilities.

The rate of interest that is printed on the bond is called the ________ rate of interest.

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

The current portion of long-term debt represents the principal and interest payments on long-term installment obligations that are due within one year.

A W-4 filled out by the employee does not designate their:

Accounts Payable is generally listed first under long-term debt.

The maximum tax credit an employer can get for FUTA if they pay unemployment taxes to a state is:

The Discount on Bonds Payable account is known as an adjunct account.

A good internal control for payroll is for the Human Resource Department to be in charge of distributing paychecks to employees.

A contingent liability arises because of a past event,but is dependent upon a future event.

During the month,TNT Construction paid $278 to settle warranty claims.TNT uses an estimated warranty account.The journal entry to record the claims payment would have been:

TLR Productions reported Interest expense of $8,300,Income tax expense of $26,400 and Net income of $88,700.TLR's interest coverage ratio is (rounded to three decimals):

Which of the following would NOT be a required payroll deduction for an employee?

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

Filters