Question 1

Trade accounts payable are amounts owed to suppliers for products or services purchased on credit.

Accepted Answer

A) True 
 B)False

Question 2

The full disclosure principle requires the reporting of contingent liabilities that are reasonably possible.

Accepted Answer

A) True 
 B)False

Question 3

What are known current liabilities? Provide at least two examples of known current liabilities.

Accepted Answer

Known current liabilities are obligation

Question 4

Karen Cooper,the founder of SmartIT Staffing,realized that effectively managing payroll was crucial to the success of her business.If an employee of the company earns $50,500 per year,SmartIT Staffing's total FICA payroll tax for this employee is:

Accepted Answer

A) $3,863.25. 
B) $3,131.00. 
C) $732.25. 
D) $3,535. 
E) Zero because the employee has not earned more that the FICA earnings limitation. 
A) $3,863.25. 
B) $3,131.00. 
C) $732.25. 
D) $3,535. 
E) Zero because the employee has not earned more that the FICA earnings limitation.

Question 5

A company's employer payroll taxes are 0.8% for federal unemployment taxes,5.4% for state unemployment taxes,6.2% for FICA Social Security taxes on earnings up to $110,100 (for 2012) and 1.45% for FICA Medicare taxes on all earnings.Compute the W-2 Wage and Tax Statement information required below for the following employees:

Accepted Answer

The answer of A company's employer payroll taxes are 0.8%...

Question 6

Home Depot had income before interest expense and income taxes of $5,909 million and interest expense of $37 million.Calculate Home Depot's times interest earned ratio.

Accepted Answer

The answer of Home Depot had income before interest expense...

Question 7

A high value for the times interest earned ratio means that a company is of high risk to the borrower.

Accepted Answer

A) True 
 B)False

Question 8

A company sold $12,000 worth of trampolines with an extended warranty.It estimates that 2% of these sales will result in warranty work.The company should:

Accepted Answer

A) Consider the warranty expense a remote liability since the rate is only 2%. 
B) Recognize warranty expense at the time the warranty work is performed. 
C) Recognize warranty expense and liability in the year of the sale. 
D) Consider the warranty expense a contingent liability. 
E) Recognize warranty liability when the company purchases the trampolines. 
A) Consider the warranty expense a remote liability since the rate is only 2%. 
B) Recognize warranty expense at the time the warranty work is performed. 
C) Recognize warranty expense and liability in the year of the sale. 
D) Consider the warranty expense a contingent liability. 
E) Recognize warranty liability when the company purchases the trampolines.

Question 9

Employers must pay FICA taxes that are equal to the amount being withheld from their employees.

Accepted Answer

A) True 
 B)False

Question 10

Walmart had income before interest expense and income taxes of $12,581 million and interest expense of $1,063 million.Sears had income before interest expense and income taxes of $3,596 million and interest expense of $1,143 million.Calculate the times interest earned ratio for each company and comment on the results.

Accepted Answer

Walmart times interest earned = $12,581/

Question 11

Advance ticket sales totaling $6,000,000 cash would be recognized as follows:

Accepted Answer

A) Debit Sales,credit Unearned Revenue. 
B) Debit Unearned Revenue,credit Sales. 
C) Debit Cash,credit Unearned Revenue. 
D) Debit Unearned Revenue,credit Cash. 
E) Debit Cash,credit Revenue Payable. 
A) Debit Sales,credit Unearned Revenue. 
B) Debit Unearned Revenue,credit Sales. 
C) Debit Cash,credit Unearned Revenue. 
D) Debit Unearned Revenue,credit Cash. 
E) Debit Cash,credit Revenue Payable.

Question 12

If a company had net income of $1,486,875,a times interest earned ratio of 4.0,a tax rate of 35%,and operating income of $3,050,000,what is the company's interest expense for the year?

Accepted Answer

A) $1,067,500 
B) $725,329 
C) $371,719 
D) $762,500 
E) $1,564,000 
A) $1,067,500 
B) $725,329 
C) $371,719 
D) $762,500 
E) $1,564,000

Question 13

A company has 90 employees and a weekly payroll of $117,000.The FICA-Social Security tax is 6.2% and the FICA-Medicare tax is 1.45%.The total withholding for federal income tax is $16,500 for the current week.Calculate the amount of FICA taxes owed (assume no employee's salary is over the FICA limit) and prepare the journal entry to accrue this week's salaries expense and withholdings.

Accepted Answer

@#IMG-DLM&_TB6947_00

Question 14

The difference between the amount received from issuing a note payable and the amount repaid is referred to as:

Accepted Answer

A) Interest 
B) Principle 
C) Face value 
D) Cash 
E) Accounts payable 
A) Interest 
B) Principle 
C) Face value 
D) Cash 
E) Accounts payable

Question 15

Accounting for contingent liabilities covers three possibilities.(1) The future event is probable and the amount cannot be reasonably estimated.(2) The future event is remote or unlikely to recur.(3) The likelihood of the liability to occur is impossible.

Accepted Answer

A) True 
 B)False

Question 16

Current liabilities are obligations not due within one year or the company's operating cycle,whichever is longer.

Accepted Answer

A) True 
 B)False

Question 17

On October 10,2013,Printfast Company sells a commercial printer for $2,350 with a one-year warranty that covers parts.Warranty expense is projected to be 4% of sales.On February 28,2014,the printer requires repairs.The cost of the parts for the repair is $80 and Printfast pays their technician $150 to perform the repair.
-What warranty expense is recorded for this printer during 2014?

Accepted Answer

A) $14.00. 
B) $84.80. 
C) $94.00. 
D) $0,there is no expense in 2014. 
E) $230.00. 
A) $14.00. 
B) $84.80. 
C) $94.00. 
D) $0,there is no expense in 2014. 
E) $230.00.

Question 18

An employer's federal unemployment taxes (FUTA) are reported:

Accepted Answer

A) Annually 
B) Semiannually 
C) Quarterly 
D) Monthly 
E) Weekly 
A) Annually 
B) Semiannually 
C) Quarterly 
D) Monthly 
E) Weekly

Question 19

A company's employees had the following earnings records at the close of the current payroll period:
   The company's payroll taxes expense on each employee's earnings includes: FICA Social Security taxes of 6.2% on the first $110,100 (for 2012) plus 1.45% FICA Medicare on all wages; 0.8% federal unemployment taxes on the first $7,000; and 2.5% state unemployment taxes on the first $7,000.Compute the employer's total payroll taxes expense for the current pay period.

Accepted Answer

@#IMG-DLM&_TB6947_00_TB6947_00

Question 20

Companies with many employees often use a special ____________________ account to pay employees.

Accepted Answer

The answer of Companies with many employees often use a...

Trade accounts payable are amounts owed to suppliers for products or services purchased on credit.

The full disclosure principle requires the reporting of contingent liabilities that are reasonably possible.

What are known current liabilities? Provide at least two examples of known current liabilities.

Karen Cooper,the founder of SmartIT Staffing,realized that effectively managing payroll was crucial to the success of her business.If an employee of the company earns $50,500 per year,SmartIT Staffing's total FICA payroll tax for this employee is:

Home Depot had income before interest expense and income taxes of $5,909 million and interest expense of $37 million.Calculate Home Depot's times interest earned ratio.

A high value for the times interest earned ratio means that a company is of high risk to the borrower.

A company sold $12,000 worth of trampolines with an extended warranty.It estimates that 2% of these sales will result in warranty work.The company should:

Employers must pay FICA taxes that are equal to the amount being withheld from their employees.

Advance ticket sales totaling $6,000,000 cash would be recognized as follows:

If a company had net income of $1,486,875,a times interest earned ratio of 4.0,a tax rate of 35%,and operating income of $3,050,000,what is the company's interest expense for the year?

The difference between the amount received from issuing a note payable and the amount repaid is referred to as:

Accounting for contingent liabilities covers three possibilities.(1) The future event is probable and the amount cannot be reasonably estimated.(2) The future event is remote or unlikely to recur.(3) The likelihood of the liability to occur is impossible.

Current liabilities are obligations not due within one year or the company's operating cycle,whichever is longer.

An employer's federal unemployment taxes (FUTA) are reported:

Companies with many employees often use a special ____________________ account to pay employees.

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters

Exam 9: Reporting and Analyzing Current Liabilities

Trade accounts payable are amounts owed to suppliers for products or services purchased on credit.

The full disclosure principle requires the reporting of contingent liabilities that are reasonably possible.

What are known current liabilities? Provide at least two examples of known current liabilities.

Karen Cooper,the founder of SmartIT Staffing,realized that effectively managing payroll was crucial to the success of her business.If an employee of the company earns $50,500 per year,SmartIT Staffing's total FICA payroll tax for this employee is:

Home Depot had income before interest expense and income taxes of $5,909 million and interest expense of $37 million.Calculate Home Depot's times interest earned ratio.

A high value for the times interest earned ratio means that a company is of high risk to the borrower.

A company sold $12,000 worth of trampolines with an extended warranty.It estimates that 2% of these sales will result in warranty work.The company should:

Employers must pay FICA taxes that are equal to the amount being withheld from their employees.

Advance ticket sales totaling $6,000,000 cash would be recognized as follows:

If a company had net income of $1,486,875,a times interest earned ratio of 4.0,a tax rate of 35%,and operating income of $3,050,000,what is the company's interest expense for the year?

The difference between the amount received from issuing a note payable and the amount repaid is referred to as:

Accounting for contingent liabilities covers three possibilities.(1) The future event is probable and the amount cannot be reasonably estimated.(2) The future event is remote or unlikely to recur.(3) The likelihood of the liability to occur is impossible.

Current liabilities are obligations not due within one year or the company's operating cycle,whichever is longer.

An employer's federal unemployment taxes (FUTA) are reported:

Companies with many employees often use a special ____________________ account to pay employees.

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters