Exam 10: Current Liabilities and Fair Value Accounting

Toojay Company manufactures and sells widgets.Each widget costs $60 and sells for $100.Each widget carries a warranty that provides for free replacement if it fails for any reason during the next 36 months.In the past,4 percent of the widgets have had to be replaced under the warranty.During April,Toojay sold 2,000 widgets and replaced 150 under warranty.Calculate the product warranty expense for the month.Show your computation.

A contingent liability eventually becomes either a true liability or no liability at all.

Which of the following descriptions would not fit the definition of a liability?

Which of the following is a measure of liquidity?

Under what circumstances is a contingent liability reflected in the accounting records as though an actual liability exists?

To calculate payables turnover,an increase in merchandise inventory must be added to cost of goods sold before dividing by average accounts payable.

The higher the interest rate assumed,the

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

Calculate answers to the following scenarios: a.To what amount will an $800 deposit grow,assuming an APR of 9 percent paid annually,5 years,and simple interest? b.To what amount will a $500 deposit grow,assuming an APR of 10 percent paid semiannually,three years,and simple interest?

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.

All of the following are classified as definitely determinable liabilities except

Property Taxes Expense is recorded only in the month it is paid.

A contingent liability is a liability that may materialize in the future because of something that happened in the past.

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 accrual of employer's payroll taxes would include a debit to Payroll Taxes and Benefits Expense for

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

The amount of property tax payable is usually an estimated liability for a portion of the year.

Which of the following is a contingent liability?

What would be the adjusting entry for a note payable whose interest is not included in the face amount of the note?

Which of the following most likely is an example of an accrued liability?