Exam 10: Current Liabilities and Fair Value Accounting

Anson's Auto Parts had cash sales of $10,000 for the month of April. Sales are subject to a 6 1/2 percent sales tax and an 8 percent excise tax. In the journal provided, prepare a compound entry without explanations to record Anson's Auto Parts sales and related sales and excise taxes for the month.

Dividends Payable is an example of a(n)

You win the grand prize and can choose between receiving $100,000 today or $20,000 per year for seven years. Ignoring income taxes, how would you go about making your decision?

When compound interest is used, interest accumulates less quickly than when simple interest is used.

The entry that includes a debit to Payroll Taxes and Benefits Expense also includes credits to Federal Unemployment Tax Payable and State Unemployment Tax Payable.

Which of the following is an example of a commitment?

Only the unused portion of a line of credit is recognized as a liability.

Payroll Taxes and Benefits Expense includes all of the following except

The declaration of dividends is solely the decision of the corporation's stockholders.

All factors in a future value table must be greater than or equal to 1.000.

Calculate answers to the following questions using future value and/or present value tables (amounts rounded). a. What is the present value of receiving $1,000 at the end of each year for six years, assuming 7 percent interest compounded annually? b. What amount must be deposited at the bank today to grow to $300 in five years, assuming 14 percent interest compounded semi-annually?

Which of the following is not a component of the operating cycle?

If the amount of a liability cannot be exactly determined, it should not be recorded.

Vacation pay is charged properly as an expense in the month in which the employee takes a vacation.

All of the following are estimated liabilities except

The days' payable shows how long, on average, a company takes to pay its accounts payable.

To find the days' payable,

Days' payable is the shortest in which of the following industries?

Use this information to answer the following question. The following totals for the month of November were taken from the payroll register of Levine Company: The amount of liabilities relating to payroll, other than Salaries Payable, is

Explain why the cost of employing someone is more than just the wage or salary paid to the employee.