Question 1

Liabilities that might arise from which of the following probably would be disclosed only in the notes to the financial statements?

Accepted Answer

A)  A lawsuit with a reasonably estimable loss 
B)  Two year purchase agreement 
C)  Possible bankruptcy of an important customer 
D)  Estimated income taxes for the current year 
A)  A lawsuit with a reasonably estimable loss 
B)  Two year purchase agreement 
C)  Possible bankruptcy of an important customer 
D)  Estimated income taxes for the current year

Question 2

If the amount of a liability cannot be exactly determined,it should not be recorded.

Accepted Answer

A) True 
 B)False

Question 3

Use this information to answer the following question.   What amount must be deposited today at a 12% interest rate to grow to $900 in three years?

Accepted Answer

A)  $662.00 
B)  $734.40 
C)  $342.98 
D)  $841.50 
A)  $662.00 
B)  $734.40 
C)  $342.98 
D)  $841.50

Question 4

To find the days' payable,

Accepted Answer

A)  divide 365 by the payables turnover. 
B)  multiply the payables turnover by 365. 
C)  divide the payables turnover by 365. 
D)  subtract 365 from the payables turnover. 
A)  divide 365 by the payables turnover. 
B)  multiply the payables turnover by 365. 
C)  divide the payables turnover by 365. 
D)  subtract 365 from the payables turnover.

Question 5

A business accepts a 12 percent,$38,000 note due in three years.Assuming simple interest,how much will the business receive when the note falls due?

Accepted Answer

A)  $42,560 
B)  $51,680 
C)  $47,120 
D)  $38,000 
A)  $42,560 
B)  $51,680 
C)  $47,120 
D)  $38,000

Question 6

Use this information to answer the following question.   If $100 is invested at a 12% interest rate,how much will it grow to at the end of the three years?

Accepted Answer

A)  $100 * .935 * 3 
B)  $100 ÷ .816 
C)  ($100 ÷ 2.624) * 3 
D)  $100 * 2.624 
A)  $100 * .935 * 3 
B)  $100 ÷ .816 
C)  ($100 ÷ 2.624) * 3 
D)  $100 * 2.624

Question 7

Use this information to answer the following question.   A single deposit of $4,000 made at the beginning of period 1 at a 12% interest rate would grow to how much at the end of three years?

Accepted Answer

A)  $4,480.00 
B)  $5,620.00 
C)  $5,016.00 
D)  $13,496.00 
A)  $4,480.00 
B)  $5,620.00 
C)  $5,016.00 
D)  $13,496.00

Question 8

Under what circumstances is a contingent liability reflected in the accounting records as though an actual liability exists?

Accepted Answer

For a contingent liability to be reflect

Question 9

Interest on a promissory note is recognized when the note is issued.

Accepted Answer

A) True 
 B)False

Question 10

Use this information to answer the following question.   The entry to record the payroll taxes expense would include a credit to

Accepted Answer

A)  Salaries Payable. 
B)  Federal Income Taxes Payable. 
C)  Social Security Tax Payable. 
D)  Cash. 
A)  Salaries Payable. 
B)  Federal Income Taxes Payable. 
C)  Social Security Tax Payable. 
D)  Cash.

Question 11

At the time a company signs a contract to pay an employee a certain salary in the future,it records a liability.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following most likely is an estimated liability?

Accepted Answer

A)  Incomes taxes payable 
B)  Payroll liabilities 
C)  Sales tax payable 
D)  Current portion of long-term debt 
A)  Incomes taxes payable 
B)  Payroll liabilities 
C)  Sales tax payable 
D)  Current portion of long-term debt

Question 13

Peter Perry is paid $12 per hour,plus double-time for hours worked on weekends.During the two-week period ending March 5,Perry worked 70 hours on weekdays and 8 hours on weekends.Social security taxes are 6.2 percent,Medicare taxes are 1.45 percent,$130 is withheld for federal taxes,$36 is withheld for state income taxes,and $48 is withheld for charities.In addition,Perry's employer must pay social security taxes of 6.2 percent,Medicare taxes of 1.45 percent,federal unemployment taxes of .8 percent,and state unemployment taxes of 5.4 percent.Calculate (a)Perry's gross earnings,(b)Perry's net pay,(c)the employer's payroll taxes expense,and (d)the total cost of employing Perry for the two-week period.Round all amounts to the nearest penny.

Accepted Answer

a.$1,032.00 [(70* $12)+ (8 * $24)] 
b.$7

Question 14

The current portion of long-term debt is classified as a current liability only if it is due within the next year and is to be paid from current assets.

Accepted Answer

A) True 
 B)False

Question 15

If product X cost $50 and had a 4 percent failure rate during the warranty period,the entry to record the estimated product warranty expense in a month when 1,000 units are sold would be

Accepted Answer

A)  Product Warranty Expense 2,000
Estimated Product Warranty Liability 2,000 
B)  Product Warranty Expense 200
Estimated Product Warranty Liability 200 
C)  Product Warranty Expense 20
Cash 20 
D)  Estimated Product Warranty Liability 50
Cash 50 
A)  Product Warranty Expense 2,000
Estimated Product Warranty Liability 2,000 
B)  Product Warranty Expense 200
Estimated Product Warranty Liability 200 
C)  Product Warranty Expense 20
Cash 20 
D)  Estimated Product Warranty Liability 50
Cash 50

Question 16

On January 2,2013,Chester Company,a calendar-year company,issued $80,000 of notes payable,of which $20,000 is due on January 2 for each of the next four years.The proper balance sheet presentation on December 31,2013,is

Accepted Answer

A)  Current Liabilities,$80,000. 
B)  Current Liabilities,$20,000; Long-Term Liabilities,$60,000. 
C)  Long-Term Liabilities,$80,000. 
D)  Current Liabilities,$60,000; Long-Term Liabilities,$20,000. 
A)  Current Liabilities,$80,000. 
B)  Current Liabilities,$20,000; Long-Term Liabilities,$60,000. 
C)  Long-Term Liabilities,$80,000. 
D)  Current Liabilities,$60,000; Long-Term Liabilities,$20,000.

Question 17

Darla Katz earns an hourly wage of $12,with time-and-a-half pay for hours worked over 40 per week.During the most recent week,she worked 46 hours,her federal tax withholding totaled $62,her state tax withholding totaled $18,and $3 was withheld for union dues.Assuming a 6.2 percent social security tax rate and a 1.45 percent Medicare tax rate,prepare the entry without explanation in the journal provided to record Katz's wages and related liabilities.Round to the nearest penny.

Accepted Answer

The answer of Darla Katz earns an hourly wage of...

Liabilities that might arise from which of the following probably would be disclosed only in the notes to the financial statements?

If the amount of a liability cannot be exactly determined,it should not be recorded.

Use this information to answer the following question. What amount must be deposited today at a 12% interest rate to grow to $900 in three years?

To find the days' payable,

A business accepts a 12 percent,$38,000 note due in three years.Assuming simple interest,how much will the business receive when the note falls due?

Use this information to answer the following question. If $100 is invested at a 12% interest rate,how much will it grow to at the end of the three years?

Use this information to answer the following question. A single deposit of $4,000 made at the beginning of period 1 at a 12% interest rate would grow to how much at the end of three years?

Under what circumstances is a contingent liability reflected in the accounting records as though an actual liability exists?

Interest on a promissory note is recognized when the note is issued.

Use this information to answer the following question. The entry to record the payroll taxes expense would include a credit to

At the time a company signs a contract to pay an employee a certain salary in the future,it records a liability.

Which of the following most likely is an estimated liability?

The current portion of long-term debt is classified as a current liability only if it is due within the next year and is to be paid from current assets.

If product X cost $50 and had a 4 percent failure rate during the warranty period,the entry to record the estimated product warranty expense in a month when 1,000 units are sold would be

On January 2,2013,Chester Company,a calendar-year company,issued $80,000 of notes payable,of which $20,000 is due on January 2 for each of the next four years.The proper balance sheet presentation on December 31,2013,is

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

Liabilities that might arise from which of the following probably would be disclosed only in the notes to the financial statements?

If the amount of a liability cannot be exactly determined,it should not be recorded.

Use this information to answer the following question. What amount must be deposited today at a 12% interest rate to grow to $900 in three years?

To find the days' payable,

A business accepts a 12 percent,$38,000 note due in three years.Assuming simple interest,how much will the business receive when the note falls due?

Use this information to answer the following question. If $100 is invested at a 12% interest rate,how much will it grow to at the end of the three years?

Use this information to answer the following question. A single deposit of $4,000 made at the beginning of period 1 at a 12% interest rate would grow to how much at the end of three years?

Under what circumstances is a contingent liability reflected in the accounting records as though an actual liability exists?

Interest on a promissory note is recognized when the note is issued.

Use this information to answer the following question. The entry to record the payroll taxes expense would include a credit to

At the time a company signs a contract to pay an employee a certain salary in the future,it records a liability.

Which of the following most likely is an estimated liability?

The current portion of long-term debt is classified as a current liability only if it is due within the next year and is to be paid from current assets.

If product X cost $50 and had a 4 percent failure rate during the warranty period,the entry to record the estimated product warranty expense in a month when 1,000 units are sold would be

On January 2,2013,Chester Company,a calendar-year company,issued $80,000 of notes payable,of which $20,000 is due on January 2 for each of the next four years.The proper balance sheet presentation on December 31,2013,is

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