Question 1

Uncertainties such as natural disasters:

Accepted Answer

A) Are not contingent liabilities because they are future events not arising out of past transactions or events 
B) Are contingent liabilities because they are future events arising from past transactions or events 
C) Should be disclosed because of their usefulness to financial statements 
D) Are estimated liabilities because the amounts are uncertain 
E) Arise out of transactions such as debt guarantees 
A) Are not contingent liabilities because they are future events not arising out of past transactions or events 
B) Are contingent liabilities because they are future events arising from past transactions or events 
C) Should be disclosed because of their usefulness to financial statements 
D) Are estimated liabilities because the amounts are uncertain 
E) Arise out of transactions such as debt guarantees

Question 2

The rate for FICA-social security is 6.2% and the rate for FICA-Medicare is 1.45%.Calculate the total amount of FICA withholding for an employee whose pay is $2,400 and is entirely subject to these FICA taxes.

Accepted Answer

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Question 3

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 4

Experience shows that when times interest earned falls below 1.5 to 2.0 and remains at that level or lower for several time periods,the default rate on liabilities increases sharply.

Accepted Answer

A) True 
 B)False

Question 5

A high merit rating means that an employer has high employee turnover or seasonal hiring.

Accepted Answer

A) True 
 B)False

Question 6

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 7

FUTA is the abbreviation for social security taxes.

Accepted Answer

A) True 
 B)False

Question 8

On October 10,2010,Printfast Company sells a commercial printer for $2,350 with a one year warranty that covers parts.Warranty expense is project to be 4% of sales.On February 28,2011,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 is the warranty expense at the end of 2011?

Accepted Answer

A) $14.00 
B) $84.80 
C) $94.00 
D) $0,there is no expense at the end of 2011 
E) $230.00 
A) $14.00 
B) $84.80 
C) $94.00 
D) $0,there is no expense at the end of 2011 
E) $230.00

Question 9

On December 1,2010 Gates Company borrowed $45,000 cash from FirstBank on a 90-day,9% note payable.
a. Prepare Gate's general journal entry to record the issuance of the note payable
b. Prepare Gate's general journal entry to record the accrued interest due at December 31, 2010
c. Prepare Gate's general journal entry to record the payment of the note on March 1, 2013.

Accepted Answer

a.
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Question 10

__________ allowances are items that reduce the amount of federal income taxes owed by the individual.

Accepted Answer

The answer of __________ allowances are items that reduce the...

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

A company's income before interest expense and income taxes is $302,400 and its interest expense is $72,000.Calculate the company's times interest earned ratio.

Accepted Answer

$302,400/$

Question 13

Define liabilities and explain the differences between current and long-term liabilities.

Accepted Answer

Liabilities are probable future payments

Question 14

FUTA taxes are:

Accepted Answer

A) Social Security taxes 
B) Medicare taxes 
C) Employee income taxes 
D) Unemployment taxes 
E) Employee deductions 
A) Social Security taxes 
B) Medicare taxes 
C) Employee income taxes 
D) Unemployment taxes 
E) Employee deductions

Question 15

An employee earnings report is a cumulative record of an employee's hours worked,gross earnings,deductions and net pay.

Accepted Answer

A) True 
 B)False

Question 16

Match between columns
                        Premises:    Wage bracket withholding table 
   Merit rating 
   Long-term liability 
   Warranty 
   Contingent liability 
   FUTA taxes 
   Estimated liability 
   Withholding allowance 
   Net pay 
   FICA taxes

Accepted Answer

The Answer of  Taxes assessed on both employer and is...

Question 17

On September 15,SportsWorld borrowed $75,000 cash from FirstBank on a 12%,60-day note payable.
a. Prepare SportsWorld's general journal entry to record the issuance of the note payable
b. Prepare SportsWorld's general journal entry to record the payment of the note at maturity.

Accepted Answer

a.
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Question 18

Metro Express has 5 sales employees,each of whom earns $4,000 per month and is paid on the last working day of the month.Each employee's wages are subject to FICA social security taxes of 6.2% and Medicare taxes of 1.45% on all wages.Withholding for each employee also includes federal income tax of 16% and monthly medical insurance premiums of $110 for each employee.
a. Prepare the general journal entry to accrue the monthly sales salaries expense at January 31
b. The employer payroll taxes for Metro Express include FICA taxes, federal unemployment taxes of 0.8% of the first $7,000 paid each employee and state unemployment taxes of 4.0% of the first $7,000 paid to each employee. Prepare the journal entry to record the employer's payroll taxes at January 31 for Metro Express. (Assume that none of the employees has reached the unemployment limit of $7,000.)

Accepted Answer

a.
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Question 19

In the accounting records of a defendant,lawsuits:

Accepted Answer

A) Are estimated liabilities 
B) Should always be recorded 
C) Should always be disclosed 
D) Should be recorded if payment for damages is probable and the amount can be reasonably estimated 
E) Should never be recorded 
A) Are estimated liabilities 
B) Should always be recorded 
C) Should always be disclosed 
D) Should be recorded if payment for damages is probable and the amount can be reasonably estimated 
E) Should never be recorded

Question 20

Obligations not expected to be paid within the longer of one year or the company's operating cycle are reported as:

Accepted Answer

A) Current assets 
B) Current liabilities 
C) Long-term liabilities 
D) Operating cycle liabilities 
E) Bills 
A) Current assets 
B) Current liabilities 
C) Long-term liabilities 
D) Operating cycle liabilities 
E) Bills

Uncertainties such as natural disasters:

The rate for FICA-social security is 6.2% and the rate for FICA-Medicare is 1.45%.Calculate the total amount of FICA withholding for an employee whose pay is $2,400 and is entirely subject to these FICA taxes.

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:

Experience shows that when times interest earned falls below 1.5 to 2.0 and remains at that level or lower for several time periods,the default rate on liabilities increases sharply.

A high merit rating means that an employer has high employee turnover or seasonal hiring.

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

FUTA is the abbreviation for social security taxes.

__________ allowances are items that reduce the amount of federal income taxes owed by the individual.

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

A company's income before interest expense and income taxes is $302,400 and its interest expense is $72,000.Calculate the company's times interest earned ratio.

Define liabilities and explain the differences between current and long-term liabilities.

FUTA taxes are:

An employee earnings report is a cumulative record of an employee's hours worked,gross earnings,deductions and net pay.

On September 15,SportsWorld borrowed $75,000 cash from FirstBank on a 12%,60-day note payable. a. Prepare SportsWorld's general journal entry to record the issuance of the note payable b. Prepare SportsWorld's general journal entry to record the payment of the note at maturity.

In the accounting records of a defendant,lawsuits:

Obligations not expected to be paid within the longer of one year or the company's operating cycle are reported as:

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

Uncertainties such as natural disasters:

The rate for FICA-social security is 6.2% and the rate for FICA-Medicare is 1.45%.Calculate the total amount of FICA withholding for an employee whose pay is $2,400 and is entirely subject to these FICA taxes.

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:

Experience shows that when times interest earned falls below 1.5 to 2.0 and remains at that level or lower for several time periods,the default rate on liabilities increases sharply.

A high merit rating means that an employer has high employee turnover or seasonal hiring.

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

FUTA is the abbreviation for social security taxes.

__________ allowances are items that reduce the amount of federal income taxes owed by the individual.

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

A company's income before interest expense and income taxes is $302,400 and its interest expense is $72,000.Calculate the company's times interest earned ratio.

Define liabilities and explain the differences between current and long-term liabilities.

FUTA taxes are:

An employee earnings report is a cumulative record of an employee's hours worked,gross earnings,deductions and net pay.

On September 15,SportsWorld borrowed $75,000 cash from FirstBank on a 12%,60-day note payable. a. Prepare SportsWorld's general journal entry to record the issuance of the note payable b. Prepare SportsWorld's general journal entry to record the payment of the note at maturity.

In the accounting records of a defendant,lawsuits:

Obligations not expected to be paid within the longer of one year or the company's operating cycle are reported as:

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