Question 1

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 2

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 3

Contingent liabilities are recorded in the accounts if the future event is _______________ and the amount owed can be _______________.

Accepted Answer

Probable;

Question 4

A company estimates that warranty expense will be 4% of sales.The company's sales for the current period are $185,000.The current period's entry to record the warranty expense is:

Accepted Answer

A) 
$\begin{array}{|l|l|l|}
\hline \text { Warranty Expense } & 7,400 & \
\hline \text { Sales } & & 7,400 \
\hline
\end{array}$ 
B) 
$\begin{array}{|c|c|c|}
\hline \text { Warranty Expense } & 7,400 & \
\hline \text { Estimated Warranty Liability } & & 7,400 \
\hline
\end{array}$ 
C) 
$\begin{array}{|c|c|c|}
\hline \text { Estimated Warranty Liability } & 7,400 & \
\hline \text { Estimated Warranty Expense } & & 7,400 \
\hline
\end{array}$ 
D) 
$\begin{array}{|l|l|l|}
\hline \text { Warranty Liability } & 7,400 & \
\hline \text { Cash } & & 7,400 \
\hline
\end{array}$ 
E) No entry is recorded until the items are returned for warranty repairs 
A) 
$\begin{array}{|l|l|l|}
\hline \text { Warranty Expense } & 7,400 & \
\hline \text { Sales } & & 7,400 \
\hline
\end{array}$ 
B) 
$\begin{array}{|c|c|c|}
\hline \text { Warranty Expense } & 7,400 & \
\hline \text { Estimated Warranty Liability } & & 7,400 \
\hline
\end{array}$ 
C) 
$\begin{array}{|c|c|c|}
\hline \text { Estimated Warranty Liability } & 7,400 & \
\hline \text { Estimated Warranty Expense } & & 7,400 \
\hline
\end{array}$ 
D) 
$\begin{array}{|l|l|l|}
\hline \text { Warranty Liability } & 7,400 & \
\hline \text { Cash } & & 7,400 \
\hline
\end{array}$ 
E) No entry is recorded until the items are returned for warranty repairs

Question 5

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 6

A contingent liability:

Accepted Answer

A) Is always of a specific amount 
B) Is a potential obligation that depends on a future event arising out of a past transaction or event 
C) Is an obligation not requiring future payment 
D) Is an obligation arising from the purchase of goods or services on credit 
E) Is an obligation arising from a future event 
A) Is always of a specific amount 
B) Is a potential obligation that depends on a future event arising out of a past transaction or event 
C) Is an obligation not requiring future payment 
D) Is an obligation arising from the purchase of goods or services on credit 
E) Is an obligation arising from a future event

Question 7

A short-term note payable:

Accepted Answer

A) Is a written promise to pay a specified amount on a definite future date within one year or the company's operating cycle,whichever is longer 
B) Is a contingent liability 
C) Is an estimated liability 
D) Is not a liability until the due date 
E) Cannot be used to extend the payment period for an account payable 
A) Is a written promise to pay a specified amount on a definite future date within one year or the company's operating cycle,whichever is longer 
B) Is a contingent liability 
C) Is an estimated liability 
D) Is not a liability until the due date 
E) Cannot be used to extend the payment period for an account payable

Question 8

Federal depository banks are authorized to accept deposits of amounts payable to the federal government.

Accepted Answer

A) True 
 B)False

Question 9

Match between columns
                        Premises:  Additional compensation paid to or on behalf of employees, such as premiums for medical insurance and contributions to pension plans
 A record for a pay period that shows the pay period dates, regular and overtime hours worked, gross pay, net pay and deductions
 Total compensation earned by an employee
 Income before interest expense and income taxes divided by interest expense
 A written promise to pay a specified amount on a definite future date within one year or the company's operating cycle, whichever is longer
 A bank authorized to accept deposits of amounts payable to the federal government, including payroll taxes
 A seller's obligation to repair or replace a product or service that fails to perform as expected within a specified period
 A special bank account used solely for paying employees; each pay period an amount equal to the total employees' net pay is deposited and the employees' payroll checks are drawn on that account
 Obligations due within one year or the company's operating cycle, whichever is longer
 Payments of income taxes that are deferred until future years because of temporary differences between GAAP and tax accounting rules

Accepted Answer

The Answer of Payroll register and Current liabilities and Payroll is...

Question 10

Cooper Company borrows $785,100 cash on November 1,2010,by signing a 120-day,8% note.What is the total amount of interest expense that Cooper will recognize in 2010?

Accepted Answer

785,100*.

Question 11

A company's payroll for the week ended May 15 and included earned salaries of $20,000.All of that week's pay is subject to FICA social security taxes of 6.2% and Medicare taxes of 1.45%.In addition,the company withholds the following amounts for this weekly pay period: $900 for medical insurance,$3,400 for federal income taxes and $180 for union dues.
a. Prepare the general journal entry to accrue the payroll
b. The company is subject to state unemployment taxes at the rate of 2% and federal unemployment taxes at the rate of 0.8%. By May 15, some employees had earned over $7,000, so only $9,000 of the $20,000 weekly gross pay was subject to unemployment tax. Prepare the general journal entry to accrue the employer's payroll tax expense.

Accepted Answer

None

Question 12

Classify each of the following items as a: Contingent liability,Estimated liability or Current liability.

Accepted Answer

The answer of Classify each of the following items as...

Question 13

Mission Company has three employees:
$\begin{array}{lcc}
&\text { Gross Pay through July}&\text {  Gross Pay for August }\
\text { Smith } & \$ 3,200 & \$ 1,000 \
\text { Cain } & 25,800 & 3,500 \
 \text { Clark } & 94,600 & 13,100
\end{array}$

$\text { The company is subject to the following taxes: }$

$\begin{array} { l c l } \text { Tax } & \text { Rate } & \text { Applied To } \ \text { FICA-Social Security } & 6 . 2 0 \%  & \text { First } \$ 106,800 \ \text { FICA-Medicare } & 1.45 & \text { All grosspay } \ \text { FUTA } & . 8 0& \text { First } \$ 7,000 \ \text { SUTA } & 5.40 & \text { First } \$ 7,000 \end{array}$

What is Mission Company's amount for payroll taxes for Clark?

Accepted Answer

A) $ 946.35 
B) $1,002.15 
C) $1,814.35 
D) $6,234.75 
E) $812.20 
A) $ 946.35 
B) $1,002.15 
C) $1,814.35 
D) $6,234.75 
E) $812.20

Question 14

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 would the company's interest expense be 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 15

An employer has an employee benefit package that includes employer-paid health insurance and employer-paid retirement program.During January,the employer-paid health insurance equaled $7,500 and the amount the employer agreed to contribute to the employee retirement program an amount equal to 10% of the employees' $150,000 gross salaries.Prepare the general journal entry to record these employee benefits.

Accepted Answer

None

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

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

Contingent liabilities are recorded in the accounts if the future event is _ and the amount owed can be _.

A company estimates that warranty expense will be 4% of sales.The company's sales for the current period are $185,000.The current period's entry to record the warranty expense 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 contingent liability:

A short-term note payable:

Federal depository banks are authorized to accept deposits of amounts payable to the federal government.

Cooper Company borrows $785,100 cash on November 1,2010,by signing a 120-day,8% note.What is the total amount of interest expense that Cooper will recognize in 2010?

Classify each of the following items as a: Contingent liability,Estimated liability or Current liability.

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 would the company's interest expense be for the year?

Introducing Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing 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

Investments and International Operations

Reporting and Analyzing Partnerships

Reporting and Preparing Special Journals

Filters

Exam 9: Reporting and Analyzing Current Liabilities

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

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

Contingent liabilities are recorded in the accounts if the future event is _______________ and the amount owed can be _______________.

A company estimates that warranty expense will be 4% of sales.The company's sales for the current period are $185,000.The current period's entry to record the warranty expense 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 contingent liability:

A short-term note payable:

Federal depository banks are authorized to accept deposits of amounts payable to the federal government.

Cooper Company borrows $785,100 cash on November 1,2010,by signing a 120-day,8% note.What is the total amount of interest expense that Cooper will recognize in 2010?

Classify each of the following items as a: Contingent liability,Estimated liability or Current liability.

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 would the company's interest expense be for the year?

Introducing Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing 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

Investments and International Operations

Reporting and Analyzing Partnerships

Reporting and Preparing Special Journals

Filters

Contingent liabilities are recorded in the accounts if the future event is _ and the amount owed can be _.