Exam 10: Current Liabilities and Fair Value Accounting

A company wishes to make annual contributions into a fund intended to retire $400,000 in debt five years from now. The amount to contribute each year equals $400,000

A contingent liability is not entered into the accounting records under any circumstances.

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

A company purchases an asset on a deferred payment plan, ultimately paying $10,000. On the payment date, the company would

Use this information to answer the following question. Periods Present Value of \ 1 at 7 Percent Present Value of Ordinary Annuity of \ 1 at 7 Percent 1 0.935 0.935 2 0.873 1.808 3 0.816 2.624 What is the present value of receiving $400 at the end of each year for three years?

Which of the following is a tax borne by the employer but not the employee?

Prepare journal entries without explanations for the following transactions involving notes payable for Willson Company, whose fiscal year ends September 30. Round all numbers to the nearest dollar.

Unearned revenue arises from the acceptance of payment in advance for a service to be performed.

Which of the following taxes is not subject to a maximum amount per employee per year?

Use this information to answer the following question. Baker Company has the following information for the pay period of January 1-15, 2010. Payment occurs on January 20. Gross payroll \ 16,000 Federal income taxes withheld \ 1,800 Social security and Medicare rate 7.65\% Federal unemployment tax rate 8\% State unemployment tax rate 5.4\% Salaries Payable would be recorded for

Wages are compensation of employees at a yearly or monthly rate.

Use this information to answer the following question. Baker Company has the following information for the pay period of January 1-15, 2010. Payment occurs on January 20. Gross payroll \ 16,000 Federal income taxes withheld \ 1,800 Social security and Medicare rate 7.65\% Federal unemployment tax rate 8\% State unemployment tax rate 5.4\% The entry to record the payroll would include a

All of the following can be employee payroll withholdings except

Both the employee and the employer must bear the tax burden for unemployment benefits.

Working capital equals current assets plus current liabilities.

Total payroll for a given week is $17,000. If 70 percent of the company's employees typically qualify to receive two weeks' paid vacation per year (50 weeks), the entry to record estimated liability for vacation pay for the week is

Lawsuits against a company in connection with an industrial accident would not be disclosed in the notes to the financial statements as a contingent liability until the lawsuits have been settled.

Sales Tax Payable is an example of a(n)

Gross earnings minus deductions equals take-home pay.

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