Question 1

Days' payable is the shortest in which of the following industries?

Accepted Answer

A)  Grocery stores 
B)  Computers 
C)  Machinery 
D)  Auto and home supply 
A)  Grocery stores 
B)  Computers 
C)  Machinery 
D)  Auto and home supply

Question 2

Days' payable is measured

Accepted Answer

A)  in days. 
B)  as a percentage. 
C)  in dollars. 
D)  in times. 
A)  in days. 
B)  as a percentage. 
C)  in dollars. 
D)  in times.

Question 3

Which of the following is a tax borne by the employer but not the employee?

Accepted Answer

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

Question 4

Both the employee and the employer must bear the tax burden for unemployment benefits.

Accepted Answer

A) True 
 B)False

Question 5

Match each definition with the correct term below.
-Independent contractor

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 6

Hatley Corporation borrowed $10 million to finance the construction of a new building.In addition to the annual interest that is not included in the face,one-tenth of the principal amount borrowed is to be repaid each year.If the borrowing occurred one month prior to year end,how should the loan be presented on the upcoming balance sheet?

Accepted Answer

Nine million dollars of the loan should

Question 7

An asset purchased according to a deferred payment plan should be recorded based on the present value of the total cash paid.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following businesses most likely would have a large Unearned Revenue account balance at all times?

Accepted Answer

A)  Dry cleaners 
B)  Realtor 
C)  Magazine publisher 
D)  Department store 
A)  Dry cleaners 
B)  Realtor 
C)  Magazine publisher 
D)  Department store

Question 9

Use this information to answer the following question.   If an accumulation of $6,000 is desired at the end of three years,at a 12% interest rate what amount must be deposited at the end of each of the three years?

Accepted Answer

A)  $1,778.30 
B)  $20,244.00 
C)  $4,270.46 
D)  $8,430.00 
A)  $1,778.30 
B)  $20,244.00 
C)  $4,270.46 
D)  $8,430.00

Question 10

In a deferred payment arrangement,an implied or imputed interest rate is usually charged.

Accepted Answer

A) True 
 B)False

Question 11

Match each definition with the correct term below.
-Commercial paper

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 12

Match each definition with the correct term below.
-Long-term liabilities

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 13

Product warranties are an expense of the period in which the product is sold.

Accepted Answer

A) True 
 B)False

Question 14

Unearned revenue arises from the acceptance of payment in advance for a service to be performed.

Accepted Answer

A) True 
 B)False

Question 15

If any portion of a long-term debt is to be paid in the next year,that portion should be classified as a current liability.

Accepted Answer

A) True 
 B)False

Question 16

Lee Provo is paid $8 per hour,plus time-and-one-half for hours over 40 for a given week.During the week of January 21,Provo worked 46 hours.Social security taxes are 6.2 percent,Medicare taxes are 1.45 percent,$50 is withheld for federal income taxes,$12 is withheld for state income taxes,and $15 is withheld for medical insurance.In addition,Provo's employer must pay social security taxes of 6.2 percent,Medicare taxes of 1.45 percent,state unemployment taxes of 5.4 percent,and federal unemployment taxes of .8 percent.Calculate (a)Provo's gross earnings,(b)Provo's take-home pay,(c)the employer's payroll taxes expense,and (d)the total cost of employing Provo for the week.Round all amounts to the nearest penny.

Accepted Answer

a.$392.00 [(40 * $8)+ (6 * $12

Question 17

Recording estimated product warranty expense in the year of the sale best follows which of the following accounting principles?

Accepted Answer

A)  Matching 
B)  Consistency 
C)  Historical cost 
D)  Full disclosure 
A)  Matching 
B)  Consistency 
C)  Historical cost 
D)  Full disclosure

Question 18

A contingent liability is best described as a(n)

Accepted Answer

A)  current liability. 
B)  probable liability. 
C)  potential liability. 
D)  estimated liability. 
A)  current liability. 
B)  probable liability. 
C)  potential liability. 
D)  estimated liability.

Question 19

Use this information to answer the following question. The following totals for the month of July were taken from the payroll register of Greene Company:
  The entry to record the payment of net payroll would include a

Accepted Answer

A)  debit to Salaries Payable for $24,000. 
B)  debit to Salaries Payable for $15,900. 
C)  debit to Salaries Payable for $17,000. 
D)  credit to Cash for $18,100. 
A)  debit to Salaries Payable for $24,000. 
B)  debit to Salaries Payable for $15,900. 
C)  debit to Salaries Payable for $17,000. 
D)  credit to Cash for $18,100.

Question 20

Of a company's employees,75 percent typically qualify to receive two weeks' paid vacation out of 50 working weeks per year.The entry to record the amount of estimated liability for vacation pay for a week in which the total payroll is $19,200 :

Accepted Answer

A)  Estimated Liability for Vacation Pay 288
Cash 288 
B)  Vacation Pay Expense 576
Estimated Liability for Vacation Pay 576 
C)  Vacation Pay Expense 14,400
Cash 14,400 
D)  Cash 512
Estimated Liability for Vacation Pay 512 
A)  Estimated Liability for Vacation Pay 288
Cash 288 
B)  Vacation Pay Expense 576
Estimated Liability for Vacation Pay 576 
C)  Vacation Pay Expense 14,400
Cash 14,400 
D)  Cash 512
Estimated Liability for Vacation Pay 512

Days' payable is the shortest in which of the following industries?

Days' payable is measured

Which of the following is a tax borne by the employer but not the employee?

Both the employee and the employer must bear the tax burden for unemployment benefits.

Match each definition with the correct term below. -Independent contractor

An asset purchased according to a deferred payment plan should be recorded based on the present value of the total cash paid.

Which of the following businesses most likely would have a large Unearned Revenue account balance at all times?

Use this information to answer the following question. If an accumulation of $6,000 is desired at the end of three years,at a 12% interest rate what amount must be deposited at the end of each of the three years?

In a deferred payment arrangement,an implied or imputed interest rate is usually charged.

Match each definition with the correct term below. -Commercial paper

Match each definition with the correct term below. -Long-term liabilities

Product warranties are an expense of the period in which the product is sold.

Unearned revenue arises from the acceptance of payment in advance for a service to be performed.

If any portion of a long-term debt is to be paid in the next year,that portion should be classified as a current liability.

Recording estimated product warranty expense in the year of the sale best follows which of the following accounting principles?

A contingent liability is best described as a(n)

Use this information to answer the following question. The following totals for the month of July were taken from the payroll register of Greene Company: The entry to record the payment of net payroll would include a

Of a company's employees,75 percent typically qualify to receive two weeks' paid vacation out of 50 working weeks per year.The entry to record the amount of estimated liability for vacation pay for a week in which the total payroll is $19,200 :

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

Days' payable is the shortest in which of the following industries?

Days' payable is measured

Which of the following is a tax borne by the employer but not the employee?

Both the employee and the employer must bear the tax burden for unemployment benefits.

Match each definition with the correct term below. -Independent contractor

An asset purchased according to a deferred payment plan should be recorded based on the present value of the total cash paid.

Which of the following businesses most likely would have a large Unearned Revenue account balance at all times?

Use this information to answer the following question. If an accumulation of $6,000 is desired at the end of three years,at a 12% interest rate what amount must be deposited at the end of each of the three years?

In a deferred payment arrangement,an implied or imputed interest rate is usually charged.

Match each definition with the correct term below. -Commercial paper

Match each definition with the correct term below. -Long-term liabilities

Product warranties are an expense of the period in which the product is sold.

Unearned revenue arises from the acceptance of payment in advance for a service to be performed.

If any portion of a long-term debt is to be paid in the next year,that portion should be classified as a current liability.

Recording estimated product warranty expense in the year of the sale best follows which of the following accounting principles?

A contingent liability is best described as a(n)

Use this information to answer the following question. The following totals for the month of July were taken from the payroll register of Greene Company: The entry to record the payment of net payroll would include a

Of a company's employees,75 percent typically qualify to receive two weeks' paid vacation out of 50 working weeks per year.The entry to record the amount of estimated liability for vacation pay for a week in which the total payroll is $19,200 :

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