Question 1

An employee's take-home pay is equal to gross pay less all voluntary deductions.

Accepted Answer

A) True 
 B)False

Question 2

An employee earns $40 per hour and 1.5 times that rate for all hours in excess of 40 hours per week.Assume that the employee worked 60 hours during the week,and that the gross pay prior to the current week totaled $58,000.Assume further that the social security tax rate was 6.0%,the Medicare tax rate was 1.5%,and the federal income tax to be withheld was $614.
​
(a)Determine the gross pay for the week.
(b)Determine the net pay for the week.

Accepted Answer

The answer of An employee earns $40 per hour and...

Question 3

​An installment note payable for a principal amount of $94,000 at 6% interest requires Lawson Company to repay the principal and interest in equal annual payments of $22,315 beginning December 31,of the first year,for each of the next five years.After the final payment,the carrying amount on the note will be​

Accepted Answer

A)  ​$1,263 
B)  ​$21,053 
C)  ​$22,315 
D)  ​$0 
A)  ​$1,263 
B)  ​$21,053 
C)  ​$22,315 
D)  ​$0

Question 4

Match the following terms or phrases in (a-g)with the explanations in 1-8.Terms or phrases may be used more than once.
-Reasonably possible likelihood of a liability

Accepted Answer

A) Current ratio 
B) Working capital 
C) Quick assets 
D) Quick ratio 
E) Record an accrual and disclose in the notes to the financial statements
F)Disclose only in notes to financial statements
G)No disclosure needed in notes to financial statements
   
A) Current ratio 
B) Working capital 
C) Quick assets 
D) Quick ratio 
E) Record an accrual and disclose in the notes to the financial statements
F)Disclose only in notes to financial statements
G)No disclosure needed in notes to financial statements

Question 5

The current assets and current liabilities for Kolbie Company and Newton Company are as follows:
​
   *These represent prepaid expenses and other non-quick current assets.
(a)Determine the quick ratio for both companies.Round to two decimal places.
(b)Interpret the quick ratio difference between the two companies.

Accepted Answer

The answer of The current assets and current liabilities for...

Question 6

During the first year of operations,employees earned vacation pay of $35,000.The vacations will be taken during the second year.The vacation pay expense should be recorded in the second year as the vacations are taken by the employees.

Accepted Answer

A) True 
 B)False

Question 7

Depending upon when an unfunded pension liability is to be paid,it will be classified on the balance sheet as either a long-term or a current liability.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following taxes are employers required to withhold from employees?

Accepted Answer

A)  FICA tax 
B)  FICA tax,and state and federal unemployment tax 
C)  state unemployment tax 
D)  federal unemployment tax 
A)  FICA tax 
B)  FICA tax,and state and federal unemployment tax 
C)  state unemployment tax 
D)  federal unemployment tax

Question 9

When a borrower receives the face amount of a discounted note less the discount,the amount received is known as

Accepted Answer

A)  the note proceeds 
B)  the note discount 
C)  the note deferred interest 
D)  the note principal 
A)  the note proceeds 
B)  the note discount 
C)  the note deferred interest 
D)  the note principal

Question 10

The amount of money a borrower receives from the lender is called the discount rate.

Accepted Answer

A) True 
 B)False

Question 11

The journal entry a company uses to record the estimated product warranty liability expense is

Accepted Answer

A)  debit Product Warranty Expense; credit Product Warranty Payable 
B)  debit Product Warranty Payable; credit Cash 
C)  debit Product Warranty Expense; credit Cash 
D)  debit Product Warranty Payable; credit Product Warranty Expense 
A)  debit Product Warranty Expense; credit Product Warranty Payable 
B)  debit Product Warranty Payable; credit Cash 
C)  debit Product Warranty Expense; credit Cash 
D)  debit Product Warranty Payable; credit Product Warranty Expense

Question 12

The journal entry to record the monthly payroll on April 30 would include a

Accepted Answer

A)  credit to Salaries Payable for $8,150 
B)  debit to Salaries Expense for $7,902 
C)  debit to Salaries Payable for $8,150 
D)  debit to Salaries Payable for $7,902 
A)  credit to Salaries Payable for $8,150 
B)  debit to Salaries Expense for $7,902 
C)  debit to Salaries Payable for $8,150 
D)  debit to Salaries Payable for $7,902

Question 13

Which of the following is the most desirable quick ratio?

Accepted Answer

A)  2.20 
B)  1.80 
C)  1.95 
D)  1.50 
A)  2.20 
B)  1.80 
C)  1.95 
D)  1.50

Question 14

Taylor Bank lends Guarantee Company $150,000 on January 1.Guarantee Company signs a $150,000,8%,9-month,interest-bearing note.The entry made by Guarantee Company on January 1 to record the proceeds and issuance of the note is ​

Accepted Answer

A)  Interest Expense 12,000
Cash 138,000
Notes Payable 150,000
​ 
B)  Cash 150,000
Notes Payable 150,000
​ 
C)  Cash 162,000
Interest Expense 12,000
Notes Payable 150,000
​ 
D)  Notes Payable 120,000
Interest Payable 7,200
Cash 120,000
Interest Expense 7,200 
A)  Interest Expense 12,000
Cash 138,000
Notes Payable 150,000
​ 
B)  Cash 150,000
Notes Payable 150,000
​ 
C)  Cash 162,000
Interest Expense 12,000
Notes Payable 150,000
​ 
D)  Notes Payable 120,000
Interest Payable 7,200
Cash 120,000
Interest Expense 7,200

Question 15

Match the following terms or phrases in (a-g)with the explanations in 1-8.Terms or phrases may be used more than once.
-Current assets / Current liabilities

Accepted Answer

A) Current ratio 
B) Working capital 
C) Quick assets 
D) Quick ratio 
E) Record an accrual and disclose in the notes to the financial statements
F)Disclose only in notes to financial statements
G)No disclosure needed in notes to financial statements
   
A) Current ratio 
B) Working capital 
C) Quick assets 
D) Quick ratio 
E) Record an accrual and disclose in the notes to the financial statements
F)Disclose only in notes to financial statements
G)No disclosure needed in notes to financial statements

Question 16

Scott Company sells merchandise with a one-year warranty.Sales consisted of 2,500 units in Year 1 and 2,000 units in Year 2.It is estimated that warranty repairs will average $10 per unit sold,and 30% of the repairs will be made in Year 1 and 70% in Year 2 for the Year 1 sales.Similarly,30% of repairs will be made in Year 2 and 70% in Year 3 for the Year 2 sales.In the Year 3 income statement,how much of the warranty expense shown will be due to Year 1 sales?

Accepted Answer

A)  $6,000 
B)  $14,000 
C)  $20,000 
D)  $0 
A)  $6,000 
B)  $14,000 
C)  $20,000 
D)  $0

Question 17

List five internal controls that relate directly to payroll.

Accepted Answer

All of the cash payment controls. Proper

Question 18

​The interest portion of an installment note payment is computed by multiplying the interest rate by the carrying amount of the note at the end of the period.

Accepted Answer

A) True 
 B)False

Question 19

Use the following key (a-d)to identify the proper treatment of each contingent liability.
-Event is reasonably possible and amount is estimable

Accepted Answer

A) Record only 
B) Record and disclose 
C) Disclose only 
D) Do not record or disclose
   
A) Record only 
B) Record and disclose 
C) Disclose only 
D) Do not record or disclose

Question 20

Several months ago,Jones Company experienced a spill of hazardous materials into the White River from one of its plants.As a result,the Environmental Protection Agency (EPA)fined the company $405,000.The company contested the fine.In addition,an employee is seeking $180,000 damages related to the spill.Finally,a homeowner has sued the company for $260,000.Although the homeowner lives 30 miles downstream from the plant,he believes that the spill has reduced his home's resale value by $260,000.
Jones' legal counsel believes the following will happen in relationship to these incidents:
​

Accepted Answer

The answer of Several months ago,Jones Company experienced a spill...

Exam 10: Liabilities: Current,installment Notes,and Contingencies

An employee's take-home pay is equal to gross pay less all voluntary deductions.

Match the following terms or phrases in (a-g)with the explanations in 1-8.Terms or phrases may be used more than once. -Reasonably possible likelihood of a liability

During the first year of operations,employees earned vacation pay of $35,000.The vacations will be taken during the second year.The vacation pay expense should be recorded in the second year as the vacations are taken by the employees.

Depending upon when an unfunded pension liability is to be paid,it will be classified on the balance sheet as either a long-term or a current liability.

Which of the following taxes are employers required to withhold from employees?

When a borrower receives the face amount of a discounted note less the discount,the amount received is known as

The amount of money a borrower receives from the lender is called the discount rate.

The journal entry a company uses to record the estimated product warranty liability expense is

The journal entry to record the monthly payroll on April 30 would include a

Which of the following is the most desirable quick ratio?

Taylor Bank lends Guarantee Company $150,000 on January 1.Guarantee Company signs a $150,000,8%,9-month,interest-bearing note.The entry made by Guarantee Company on January 1 to record the proceeds and issuance of the note is ​

Match the following terms or phrases in (a-g)with the explanations in 1-8.Terms or phrases may be used more than once. -Current assets / Current liabilities

List five internal controls that relate directly to payroll.

​The interest portion of an installment note payment is computed by multiplying the interest rate by the carrying amount of the note at the end of the period.

Use the following key (a-d)to identify the proper treatment of each contingent liability. -Event is reasonably possible and amount is estimable

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Internal Control and Cash

Receivables

Long-Term Assets: Fixed and Intangible

Liabilities: Bonds Payable

Corporations: Organization, stock Transactions, and Dividends

Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Cost Systems

Activity-Based Costing

Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Evaluating Variances From Standard Costs

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

Filters

Taylor Bank lends Guarantee Company $150,000 on January 1.Guarantee Company signs a $150,000,8%,9-month,interest-bearing note.The entry made by Guarantee Company on January 1 to record the proceeds and issuance of the note is

The interest portion of an installment note payment is computed by multiplying the interest rate by the carrying amount of the note at the end of the period.