Question 1

A company receives $180 for a sale,of which $10 is for sales tax.The journal entry to record the sale is:

Accepted Answer

A)  Sales Tax expense 10
Cash 170
Sales 180 
B)  Cash 170
Sales 170 
C)  Cash 180
Sales 180 
D)  Cash 180
Sales Tax Payable 10
Sales 170 
A)  Sales Tax expense 10
Cash 170
Sales 180 
B)  Cash 170
Sales 170 
C)  Cash 180
Sales 180 
D)  Cash 180
Sales Tax Payable 10
Sales 170 D

Question 2

Calculate answers to the following questions:
a.To what amount will a $1,600 deposit grow,assuming 9 percent annual interest,five years,and simple interest?
b.To what amount will a $1,000 deposit grow,assuming 10 percent annual interest paid semiannually,three years,and simple interest?

Accepted Answer

a.$2,320 [($1,600 * .09 * 5)+ $1,600] 
b.$1,300 [($1,000 * .05 * 6)+ $1,000]

Question 3

All of the following are classified as definitely determinable liabilities except

Accepted Answer

A)  sales tax payable. 
B)  estimated property warranty liability. 
C)  dividends payable. 
D)  unearned revenue. 
A)  sales tax payable. 
B)  estimated property warranty liability. 
C)  dividends payable. 
D)  unearned revenue. B

Question 4

The future value of an ordinary annuity table would not include the factor

Accepted Answer

A)  0.971. 
B)  1.000. 
C)  8.0192. 
D)  25.290. 
A)  0.971. 
B)  1.000. 
C)  8.0192. 
D)  25.290.

Question 5

During March,Photo Mart sold 300 instant cameras for $200 each.Each camera had cost Photo Mart $138 to purchase and carried a one-year warranty.If 4 percent typically need to be replaced over the warranty period and two actually are replaced during March,the entry to record the Product Warranty Expense for the month is:

Accepted Answer

A)  Product Warranty Expense 552
Estimated Product Warranty Liability 552 
B)  Product Warranty Expense 1,104
Cash 1,104 
C)  Product Warranty Expense 2,208
Cash 2,208 
D)  Product Warranty Expense 1,656
Estimated Product Warranty Liability 1,656 
A)  Product Warranty Expense 552
Estimated Product Warranty Liability 552 
B)  Product Warranty Expense 1,104
Cash 1,104 
C)  Product Warranty Expense 2,208
Cash 2,208 
D)  Product Warranty Expense 1,656
Estimated Product Warranty Liability 1,656

Question 6

The higher the interest rate assumed,the

Accepted Answer

A)  higher the present value of an ordinary annuity. 
B)  more one must deposit today to accumulate to a desired sum. 
C)  lower the future value of a sum invested in the bank today. 
D)  lower the present value of a sum due in the future. 
A)  higher the present value of an ordinary annuity. 
B)  more one must deposit today to accumulate to a desired sum. 
C)  lower the future value of a sum invested in the bank today. 
D)  lower the present value of a sum due in the future.

Question 7

Working capital equals current assets minus current liabilities.

Accepted Answer

A) True 
 B)False

Question 8

All liabilities involve an obligation of one sort or another.

Accepted Answer

A) True 
 B)False

Question 9

The lower the interest rate,the lower the present value factor.

Accepted Answer

A) True 
 B)False

Question 10

Contrast the accounting problems presented by definitely determinable liabilities and those associated with estimated liabilities.

Accepted Answer

Definitely determinable liabilities requ

Question 11

The amount of property tax payable is usually an estimated liability for a portion of the year.

Accepted Answer

A) True 
 B)False

Question 12

There is a limit to the amount of income subject to the FUTA tax.

Accepted Answer

A) True 
 B)False

Question 13

You win the grand prize and can choose between receiving $200,000 today or $40,000 per year for seven years.Ignoring income taxes,how would you go about making your decision?

Accepted Answer

The present value of the $40,000 annuity

Question 14

Match each definition with the correct term below.
-Contingent liability

Accepted Answer

A) Definite debts or obligations whose exact dollar amount cannot be known until a later date. 
B) Liabilities due beyond one year or beyond the normal operating cycle. 
C) Unsecured loans that are sold to the public ,usually through professionally managed investment firms. 
D) The cost of using money for a specific period. 
E) A potential liability that depends on a future event arising out of a past transaction.
F)Debts and obligations that a company expects to satisfy within one year or within its normal operating cycle.
G)The interest cost for two or more periods when,after each period,the interest earned in that period is added to the amount on which interest is calculated in future periods.
H)A legal obligation that does not meet the technical requirements for recognition as a liability.
I)A person who is not an employee of the organization and so is not accounted for under the payroll system.
J)The interest cost for one or more periods when the principal sum stays the same from period to period. 
A) Definite debts or obligations whose exact dollar amount cannot be known until a later date. 
B) Liabilities due beyond one year or beyond the normal operating cycle. 
C) Unsecured loans that are sold to the public ,usually through professionally managed investment firms. 
D) The cost of using money for a specific period. 
E) A potential liability that depends on a future event arising out of a past transaction.
F)Debts and obligations that a company expects to satisfy within one year or within its normal operating cycle.
G)The interest cost for two or more periods when,after each period,the interest earned in that period is added to the amount on which interest is calculated in future periods.
H)A legal obligation that does not meet the technical requirements for recognition as a liability.
I)A person who is not an employee of the organization and so is not accounted for under the payroll system.
J)The interest cost for one or more periods when the principal sum stays the same from period to period.

Question 15

Which of the following taxes is not subject to a maximum amount per employee per year?

Accepted Answer

A)  State unemployment tax 
B)  Federal unemployment tax 
C)  Social security tax 
D)  Medicare tax 
A)  State unemployment tax 
B)  Federal unemployment tax 
C)  Social security tax 
D)  Medicare tax

Question 16

Match each definition with the correct term below.
-Commitment

Accepted Answer

A) Definite debts or obligations whose exact dollar amount cannot be known until a later date. 
B) Liabilities due beyond one year or beyond the normal operating cycle. 
C) Unsecured loans that are sold to the public ,usually through professionally managed investment firms. 
D) The cost of using money for a specific period. 
E) A potential liability that depends on a future event arising out of a past transaction.
F)Debts and obligations that a company expects to satisfy within one year or within its normal operating cycle.
G)The interest cost for two or more periods when,after each period,the interest earned in that period is added to the amount on which interest is calculated in future periods.
H)A legal obligation that does not meet the technical requirements for recognition as a liability.
I)A person who is not an employee of the organization and so is not accounted for under the payroll system.
J)The interest cost for one or more periods when the principal sum stays the same from period to period. 
A) Definite debts or obligations whose exact dollar amount cannot be known until a later date. 
B) Liabilities due beyond one year or beyond the normal operating cycle. 
C) Unsecured loans that are sold to the public ,usually through professionally managed investment firms. 
D) The cost of using money for a specific period. 
E) A potential liability that depends on a future event arising out of a past transaction.
F)Debts and obligations that a company expects to satisfy within one year or within its normal operating cycle.
G)The interest cost for two or more periods when,after each period,the interest earned in that period is added to the amount on which interest is calculated in future periods.
H)A legal obligation that does not meet the technical requirements for recognition as a liability.
I)A person who is not an employee of the organization and so is not accounted for under the payroll system.
J)The interest cost for one or more periods when the principal sum stays the same from period to period.

Question 17

Kemper Company manufactures and sells widgets.Each widget costs $120 and sells for $200.Each widget carries a warranty that provides for free replacement if it fails for any reason during the next 36 months.In the past,4 percent of the widgets have had to be replaced under the warranty.During May,Kemper sold 4,000 widgets and replaced 300 under warranty.Calculate the product warranty expense for the month.Show your computation.

Accepted Answer

$19,200 (4

Question 18

A commitment is recognized when the amount can be reasonably estimated and the likelihood of loss is probable.

Accepted Answer

A) True 
 B)False

Question 19

If the net present value of a proposed investment is negative,it means that the investment should not be made.

Accepted Answer

A) True 
 B)False

Question 20

Salaries are compensation of employees at a yearly or monthly rate.

Accepted Answer

A) True 
 B)False

A company receives $180 for a sale,of which $10 is for sales tax.The journal entry to record the sale is:

Calculate answers to the following questions: a.To what amount will a $1,600 deposit grow,assuming 9 percent annual interest,five years,and simple interest? b.To what amount will a $1,000 deposit grow,assuming 10 percent annual interest paid semiannually,three years,and simple interest?

All of the following are classified as definitely determinable liabilities except

The future value of an ordinary annuity table would not include the factor

The higher the interest rate assumed,the

Working capital equals current assets minus current liabilities.

All liabilities involve an obligation of one sort or another.

The lower the interest rate,the lower the present value factor.

Contrast the accounting problems presented by definitely determinable liabilities and those associated with estimated liabilities.

The amount of property tax payable is usually an estimated liability for a portion of the year.

There is a limit to the amount of income subject to the FUTA tax.

You win the grand prize and can choose between receiving $200,000 today or $40,000 per year for seven years.Ignoring income taxes,how would you go about making your decision?

Match each definition with the correct term below. -Contingent liability

Which of the following taxes is not subject to a maximum amount per employee per year?

Match each definition with the correct term below. -Commitment

A commitment is recognized when the amount can be reasonably estimated and the likelihood of loss is probable.

If the net present value of a proposed investment is negative,it means that the investment should not be made.

Salaries are compensation of employees at a yearly or monthly rate.

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Long Term Assets

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Investments

Filters

Exam 9: Current Liabilities and Fair Value Accounting

A company receives $180 for a sale,of which $10 is for sales tax.The journal entry to record the sale is:

Calculate answers to the following questions: a.To what amount will a $1,600 deposit grow,assuming 9 percent annual interest,five years,and simple interest? b.To what amount will a $1,000 deposit grow,assuming 10 percent annual interest paid semiannually,three years,and simple interest?

All of the following are classified as definitely determinable liabilities except

The future value of an ordinary annuity table would not include the factor

The higher the interest rate assumed,the

Working capital equals current assets minus current liabilities.

All liabilities involve an obligation of one sort or another.

The lower the interest rate,the lower the present value factor.

Contrast the accounting problems presented by definitely determinable liabilities and those associated with estimated liabilities.

The amount of property tax payable is usually an estimated liability for a portion of the year.

There is a limit to the amount of income subject to the FUTA tax.

You win the grand prize and can choose between receiving $200,000 today or $40,000 per year for seven years.Ignoring income taxes,how would you go about making your decision?

Match each definition with the correct term below. -Contingent liability

Which of the following taxes is not subject to a maximum amount per employee per year?

Match each definition with the correct term below. -Commitment

A commitment is recognized when the amount can be reasonably estimated and the likelihood of loss is probable.

If the net present value of a proposed investment is negative,it means that the investment should not be made.

Salaries are compensation of employees at a yearly or monthly rate.

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Long Term Assets

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Investments

Filters