Question 1

Which of the following most likely is a definitely determinable liability during interim periods?

Accepted Answer

A) Estimated property tax payable 
B) Accrued interest payable 
C) Estimated product warranty liability 
D) Estimated income taxes payable 
A) Estimated property tax payable 
B) Accrued interest payable 
C) Estimated product warranty liability 
D) Estimated income taxes payable B

Question 2

The lower the interest rate,the lower the future value factor.

Accepted Answer

A) True 
 B)False  True

Question 3

During August,Radio City sold 200 iPods for $50 each.Each iPod had cost Audio City $31 to purchase and carried a two-year warranty.If 5 percent typically need to be replaced over the warranty period and one actually is replaced during August,the entry to record the Product Warranty Expense is

Accepted Answer

A)   
B)   
C)   
D)   
A)   
B)   
C)   
D)   C

Question 4

A company receives $360 for a sale,of which $20 is for sales tax.The journal entry to record the sale is:

Accepted Answer

A)   
B)   
C)   
D)   
A)   
B)   
C)   
D)

Question 5

The lower the interest rate,the higher the present value factor.

Accepted Answer

A) True 
 B)False

Question 6

The current portion of long-term debt is classified as a current liability only if it is due within the next year and is to be paid from current assets.

Accepted Answer

A) True 
 B)False

Question 7

The owner of an amusement park is considering installing a new ride.The ride would cost $10,000,produce an estimated net cash flow of $1,575 annually,and last for nine years.
a.Assuming an interest rate of 10 percent,what is the present value of the net cash flows expected from the ride? Use future value and/or present value tables in calculating your answer.
b.Should the ride be purchased?

Accepted Answer

a.$9,070.43 [($1,575 × 5.759 (

Question 8

The costs associated with coupons and rebates are usually reflected in contra-revenue accounts.

Accepted Answer

A) True 
 B)False

Question 9

A company purchases an asset on a deferred payment plan,ultimately paying $15,000.On the payment date,the company would

Accepted Answer

A) credit Cash for less than $15,000. 
B) debit Interest Expense for the imputed amount. 
C) debit the asset account for $15,000. 
D) debit Accounts Payable for $15,000. 
A) credit Cash for less than $15,000. 
B) debit Interest Expense for the imputed amount. 
C) debit the asset account for $15,000. 
D) debit Accounts Payable for $15,000.

Question 10

A liability is recognized when

Accepted Answer

A) the exact due date is known. 
B) it is paid for. 
C) an obligation has arisen. 
D) the exact amount of the liability is known. 
A) the exact due date is known. 
B) it is paid for. 
C) an obligation has arisen. 
D) the exact amount of the liability is known.

Question 11

On January 2,2014,Lionel Company issued $40,000 of notes payable,of which $10,000 is due on January 2 for each of the next four years.The proper balance sheet presentation on December 31,2014,is

Accepted Answer

A) Current Liabilities,$40,000. 
B) Current Liabilities,$10,000;Long-Term Liabilities,$30,000. 
C) Long-Term Liabilities,$40,000. 
D) Current Liabilities,$30,000;Long-Term Liabilities,$10,000. 
A) Current Liabilities,$40,000. 
B) Current Liabilities,$10,000;Long-Term Liabilities,$30,000. 
C) Long-Term Liabilities,$40,000. 
D) Current Liabilities,$30,000;Long-Term Liabilities,$10,000.

Question 12

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

Accepted Answer

A) Sales to customers 
B) Collection of accounts receivable 
C) Recognition of depreciation 
D) Purchases from suppliers 
A) Sales to customers 
B) Collection of accounts receivable 
C) Recognition of depreciation 
D) Purchases from suppliers

Question 13

Use this information to answer the following question. The transactions below pertain to Dunhill Company,whose fiscal year ends April 30.
  The entry to record the April 10 transaction (amounts rounded)is:

Accepted Answer

A)   
B)   
C)   
D)   
A)   
B)   
C)   
D)

Question 14

Use this information to answer the following question. Panadora Company has the following information for the pay period of January 1-15,2014.Payment occurs on January 20.
 
-The entry on January 20 would be a debit to

Accepted Answer

A) Salaries Payable and a credit to Cash. 
B) Salaries Payable and a credit to Salaries Expense. 
C) Salaries Expense and a credit to Cash. 
D) Salaries Expense and a credit to Salaries Payable. 
A) Salaries Payable and a credit to Cash. 
B) Salaries Payable and a credit to Salaries Expense. 
C) Salaries Expense and a credit to Cash. 
D) Salaries Expense and a credit to Salaries Payable.

Question 15

The theoretical value of an asset is the future value of its expected benefits.

Accepted Answer

A) True 
 B)False

Question 16

Use this information to answer the following question. The following totals for the month of September were taken from the payroll register of Meadors Company:
 
-The entry to record the payment of net payroll would include a

Accepted Answer

A) debit to Salaries Payable for $24,000. 
B) debit to Salaries Payable for $15,900. 
C) debit to Salaries Payable for $17,000. 
D) credit to Cash for $18,100. 
A) debit to Salaries Payable for $24,000. 
B) debit to Salaries Payable for $15,900. 
C) debit to Salaries Payable for $17,000. 
D) credit to Cash for $18,100.

Question 17

All of the following can be employee payroll withholdings except

Accepted Answer

A) state income taxes. 
B) medical insurance premium payments. 
C) charitable contributions. 
D) federal unemployment tax. 
A) state income taxes. 
B) medical insurance premium payments. 
C) charitable contributions. 
D) federal unemployment tax.

Question 18

Use this information to answer the following question. The transactions below pertain to Dunhill Company,whose fiscal year ends April 30.
  The April 30 adjusting entry,rounded to the nearest dollar,to accrue the interest expense on the note payable is:

Accepted Answer

A)   
B)   
C)   
D)   
A)   
B)   
C)   
D)

Question 19

A company enters into a contract to purchase a certain quantity of goods from another company during the following month.At this point,would a liability exist? Explain why or why not.

Accepted Answer

A liability would not exist be

Question 20

A business accepts a 9 percent,$50,000 note due in 120 days.Assuming simple interest,how much (amount rounded)will the business receive when the note falls due?

Accepted Answer

A) $50,000 
B) $50,150 
C) $51,480 
D) $54,520 
A) $50,000 
B) $50,150 
C) $51,480 
D) $54,520

Exam 10: Current Liabilities and Fair Value Accounting

Which of the following most likely is a definitely determinable liability during interim periods?

The lower the interest rate,the lower the future value factor.

During August,Radio City sold 200 iPods for $50 each.Each iPod had cost Audio City $31 to purchase and carried a two-year warranty.If 5 percent typically need to be replaced over the warranty period and one actually is replaced during August,the entry to record the Product Warranty Expense is

A company receives $360 for a sale,of which $20 is for sales tax.The journal entry to record the sale is:

The lower the interest rate,the higher the present value factor.

The current portion of long-term debt is classified as a current liability only if it is due within the next year and is to be paid from current assets.

The costs associated with coupons and rebates are usually reflected in contra-revenue accounts.

A company purchases an asset on a deferred payment plan,ultimately paying $15,000.On the payment date,the company would

A liability is recognized when

On January 2,2014,Lionel Company issued $40,000 of notes payable,of which $10,000 is due on January 2 for each of the next four years.The proper balance sheet presentation on December 31,2014,is

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

Use this information to answer the following question. The transactions below pertain to Dunhill Company,whose fiscal year ends April 30. The entry to record the April 10 transaction (amounts rounded)is:

Use this information to answer the following question. Panadora Company has the following information for the pay period of January 1-15,2014.Payment occurs on January 20. -The entry on January 20 would be a debit to

The theoretical value of an asset is the future value of its expected benefits.

Use this information to answer the following question. The following totals for the month of September were taken from the payroll register of Meadors Company: -The entry to record the payment of net payroll would include a

All of the following can be employee payroll withholdings except

Use this information to answer the following question. The transactions below pertain to Dunhill Company,whose fiscal year ends April 30. The April 30 adjusting entry,rounded to the nearest dollar,to accrue the interest expense on the note payable is:

A company enters into a contract to purchase a certain quantity of goods from another company during the following month.At this point,would a liability exist? Explain why or why not.

A business accepts a 9 percent,$50,000 note due in 120 days.Assuming simple interest,how much (amount rounded)will the business receive when the note falls due?

Uses of Accounting Information and the Financial Statements

Measurement Concepts: Recording Business Transactions

Measuring Business Income: Adjusting the Accounts

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long-Term Assets

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting and Cost Concepts

Costing Systems: Job Order Costing

Costing Systems: Process Costing

Value-Based Systems: Activity-Based Costing and Lean Accounting

Cost-Volume-Profit Analysis

The Budgeting Process

Flexible Budgets and Performance Analysis

Standard Costing and Variance Analysis

Short-Run Decision Analysis

Capital Investment Analysis

Pricing Decisions, including Target Costing and Transfer Pricing

Quality Management and Measurement

Accounting for Unincorporated Businesses

Accounting for Investments

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