Question 1

List four different types of contingent liabilities and two different types of commitments.

Accepted Answer

Contingent Liabilities:
Lawsuits 
Income

Question 2

Commercial paper consists of secured loans that are sold to the public.

Accepted Answer

A) True 
 B)False

Question 3

Match each definition with the correct term below.
-Current 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 4

A contingent liability is a legal obligation that does not meet the technical requirements for recognition as a liability.

Accepted Answer

A) True 
 B)False

Question 5

The classification of a liability as current or long-term is important because it may affect the evaluation of a company's liquidity.

Accepted Answer

A) True 
 B)False

Question 6

The product warranty liability is an example of a definitely determinable liability.

Accepted Answer

A) True 
 B)False

Question 7

On December 1,Grenada Company borrowed $80,000 from the bank,issuing a 90-day,15 percent promissory note.Interest is in addition to the face value.In the journal provided,prepare Grenada's December 1 entry,December 31 adjusting entry without explanation for accrued interest,and March 1 entry at maturity.Round to the nearest whole dollar.

Accepted Answer

The answer of On December 1,Grenada Company borrowed $80,000 from...

Question 8

Use this information to answer the following question.   What is the present value of receiving $1,200 at the end of each year for three years at a 12% interest rate?

Accepted Answer

A)  $3,366.00 
B)  $979.20 
C)  $2,937.60 
D)  $3,148.80 
A)  $3,366.00 
B)  $979.20 
C)  $2,937.60 
D)  $3,148.80

Question 9

A company wishes to make deposits at the end of each of the next four years to accumulate a fund of $60,000.The annual contributions equal $60,000 multiplied by the appropriate present value of an ordinary annuity factor.

Accepted Answer

A) True 
 B)False

Question 10

The following information is known for Alcorn Company for the year ended December 31:   Compute Alcorn Company's payables turnover for the current year (round to two decimal places).

Accepted Answer

A)  10.89 times 
B)  9.18 times 
C)  8.52 times 
D)  7.94 times 
A)  10.89 times 
B)  9.18 times 
C)  8.52 times 
D)  7.94 times

Question 11

Ronald Company has current assets of $115,000 and current liabilities of $75,000 of which accounts payable are $65,000.Arnold's cost of goods sold is $420,000,its merchandise inventory increased by $20,000,and accounts payable were $45,000 the prior year.Calculate Ronald's payables turnover,and days' payable.

Accepted Answer

Payables Turnover = (Cost of G

Question 12

Usually,failure to record a liability means failure to record a(n)

Accepted Answer

A)  revenue. 
B)  dividend. 
C)  expense. 
D)  current asset. 
A)  revenue. 
B)  dividend. 
C)  expense. 
D)  current asset.

Question 13

Use this information to answer the following question.   A deposit of $5,400 made at the end of each year for three years at a 12% interest rate would grow to how much?

Accepted Answer

A)  $7,587.00 
B)  $18,219.60 
C)  $16,200.00 
D)  $18,144.00 
A)  $7,587.00 
B)  $18,219.60 
C)  $16,200.00 
D)  $18,144.00

Question 14

Anson's Auto Parts had cash sales of $10,000 for the month of April.Sales are subject to a 6 1/2 percent sales tax and an 8 percent excise tax.In the journal provided,prepare a compound entry without explanation to record Anson's Auto Parts sales and related sales and excise taxes for the month.

Accepted Answer

The answer of Anson's Auto Parts had cash sales of...

Question 15

Future value refers to the amount of principle plus interest after one or more periods.

Accepted Answer

A) True 
 B)False

Question 16

Match each definition with the correct term below.
-Compound interest

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

Payables turnover is measured in number of days.

Accepted Answer

A) True 
 B)False

Question 18

Decision makers rely on the future values,rather than on the present values,of future cash flows.

Accepted Answer

A) True 
 B)False

Question 19

When accounting for property taxes,which of the following accounts normally would not be credited?

Accepted Answer

A)  Prepaid Property Taxes 
B)  Cash 
C)  Estimated Property Taxes Payable 
D)  Property Taxes Expense 
A)  Prepaid Property Taxes 
B)  Cash 
C)  Estimated Property Taxes Payable 
D)  Property Taxes Expense

Question 20

The entry that includes a debit to Payroll Taxes and Benefits Expense also includes credits to Federal Unemployment Tax Payable and State Unemployment Tax Payable.

Accepted Answer

A) True 
 B)False

List four different types of contingent liabilities and two different types of commitments.

Commercial paper consists of secured loans that are sold to the public.

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

A contingent liability is a legal obligation that does not meet the technical requirements for recognition as a liability.

The classification of a liability as current or long-term is important because it may affect the evaluation of a company's liquidity.

The product warranty liability is an example of a definitely determinable liability.

Use this information to answer the following question. What is the present value of receiving $1,200 at the end of each year for three years at a 12% interest rate?

A company wishes to make deposits at the end of each of the next four years to accumulate a fund of $60,000.The annual contributions equal $60,000 multiplied by the appropriate present value of an ordinary annuity factor.

The following information is known for Alcorn Company for the year ended December 31: Compute Alcorn Company's payables turnover for the current year (round to two decimal places).

Usually,failure to record a liability means failure to record a(n)

Use this information to answer the following question. A deposit of $5,400 made at the end of each year for three years at a 12% interest rate would grow to how much?

Anson's Auto Parts had cash sales of $10,000 for the month of April.Sales are subject to a 6 1/2 percent sales tax and an 8 percent excise tax.In the journal provided,prepare a compound entry without explanation to record Anson's Auto Parts sales and related sales and excise taxes for the month.

Future value refers to the amount of principle plus interest after one or more periods.

Match each definition with the correct term below. -Compound interest

Payables turnover is measured in number of days.

Decision makers rely on the future values,rather than on the present values,of future cash flows.

When accounting for property taxes,which of the following accounts normally would not be credited?

The entry that includes a debit to Payroll Taxes and Benefits Expense also includes credits to Federal Unemployment Tax Payable and State Unemployment Tax Payable.

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

List four different types of contingent liabilities and two different types of commitments.

Commercial paper consists of secured loans that are sold to the public.

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

A contingent liability is a legal obligation that does not meet the technical requirements for recognition as a liability.

The classification of a liability as current or long-term is important because it may affect the evaluation of a company's liquidity.

The product warranty liability is an example of a definitely determinable liability.

Use this information to answer the following question. What is the present value of receiving $1,200 at the end of each year for three years at a 12% interest rate?

A company wishes to make deposits at the end of each of the next four years to accumulate a fund of $60,000.The annual contributions equal $60,000 multiplied by the appropriate present value of an ordinary annuity factor.

The following information is known for Alcorn Company for the year ended December 31: Compute Alcorn Company's payables turnover for the current year (round to two decimal places).

Usually,failure to record a liability means failure to record a(n)

Use this information to answer the following question. A deposit of $5,400 made at the end of each year for three years at a 12% interest rate would grow to how much?

Anson's Auto Parts had cash sales of $10,000 for the month of April.Sales are subject to a 6 1/2 percent sales tax and an 8 percent excise tax.In the journal provided,prepare a compound entry without explanation to record Anson's Auto Parts sales and related sales and excise taxes for the month.

Future value refers to the amount of principle plus interest after one or more periods.

Match each definition with the correct term below. -Compound interest

Payables turnover is measured in number of days.

Decision makers rely on the future values,rather than on the present values,of future cash flows.

When accounting for property taxes,which of the following accounts normally would not be credited?

The entry that includes a debit to Payroll Taxes and Benefits Expense also includes credits to Federal Unemployment Tax Payable and State Unemployment Tax Payable.

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