Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) Interest payable 
B) Accounts payable 
C) Current portion of long-term debt 
D) Sales tax payable 
A) Interest payable 
B) Accounts payable 
C) Current portion of long-term debt 
D) Sales tax payable

Question 3

Which of the following statements is true regarding the time value of money?

Accepted Answer

A) Compound interest will produce equal amounts of interest each period on a fixed deposit. 
B) Earning simple interest is more beneficial than earning compound interest. 
C) When making a purchase,it is better to make payment as soon as possible. 
D) It is better to receive $1 now than a year from now. 
A) Compound interest will produce equal amounts of interest each period on a fixed deposit. 
B) Earning simple interest is more beneficial than earning compound interest. 
C) When making a purchase,it is better to make payment as soon as possible. 
D) It is better to receive $1 now than a year from now.

Question 4

During May,Phone Mart sold 150 iphones for $200 each.Each camera had cost Phone Mart $108 to purchase and carried a one-year warranty.If 4 percent typically need to be replaced over the warranty period and two actually are replaced during May,the entry to record the Product Warranty Expense is

Accepted Answer

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

Question 5

A company wishes to make annual contributions into a fund intended to retire $700,000 in debt five years from now.The amount to contribute each year equals $700,000

Accepted Answer

A) divided by the appropriate future value of an ordinary annuity factor. 
B) times the appropriate present value of an ordinary annuity factor. 
C) times the appropriate future value of an ordinary annuity factor. 
D) divided by the appropriate present value of an ordinary annuity factor. 
A) divided by the appropriate future value of an ordinary annuity factor. 
B) times the appropriate present value of an ordinary annuity factor. 
C) times the appropriate future value of an ordinary annuity factor. 
D) divided by the appropriate present value of an ordinary annuity factor.

Question 6

Second National Bank computes interest semiannually.If the annualized interest rate (APR)is currently 6 percent,the amount deposited today should be multiplied by which future value factor to calculate the amount that will accumulate by the end of 10 years?

Accepted Answer

A) 20 periods at 12 percent 
B) 20 periods at 3 percent 
C) 10 periods at 6 percent 
D) 10 periods at 3 percent 
A) 20 periods at 12 percent 
B) 20 periods at 3 percent 
C) 10 periods at 6 percent 
D) 10 periods at 3 percent

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

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 9

The entry that includes a debit to Payroll Taxes and Benefits Expense would also include credits to Social Security Tax Payable and Medicare Tax Payable.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) $2,496. 
B) $1,100. 
C) $1,596. 
D) $496. 
A) $2,496. 
B) $1,100. 
C) $1,596. 
D) $496.

Question 11

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.

Accepted Answer

$4,800 (2,

Question 12

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.
  
-Payroll Taxes and Benefits Expense would be recorded for

Accepted Answer

A) $1,984. 
B) $2,248. 
C) $4,432. 
D) $8,032. 
A) $1,984. 
B) $2,248. 
C) $4,432. 
D) $8,032.

Question 13

Contrast the accounting problems presented by definitely determinable liabilities and those associated with estimated liabilities.

Accepted Answer

Definitely determinable liabilities requ

Question 14

Use this information to answer the following question.   
-What amount must be deposited today to grow to $900 in three years,assuming an APR of 7 percent?

Accepted Answer

A) $662.00 
B) $734.40 
C) $342.98 
D) $841.50 
A) $662.00 
B) $734.40 
C) $342.98 
D) $841.50

Question 15

There is no limit to the amount of income subject to the FUTA tax.

Accepted Answer

A) True 
 B)False

Question 16

A business accepts a 12 percent,$94,000 note due in three years.Assuming simple interest,how much will the business receive when the note falls due?

Accepted Answer

A) $105,280 
B) $127,840 
C) $116,560 
D) $94,000 
A) $105,280 
B) $127,840 
C) $116,560 
D) $94,000

Question 17

Compound interest is computed quarterly on $700 for seven years at 12 percent annual interest.The future value table is used by multiplying the $700 by which factor?

Accepted Answer

A) 28 periods at 3 percent 
B) 7 periods at 3 percent 
C) 7 periods at 12 percent 
D) 28 periods at 7 percent 
A) 28 periods at 3 percent 
B) 7 periods at 3 percent 
C) 7 periods at 12 percent 
D) 28 periods at 7 percent

Question 18

The amount recorded for Payroll Taxes and Benefits Expense is borne entirely by the employee.

Accepted Answer

A) True 
 B)False

Question 19

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 amount of liabilities relating to payroll,other than Salaries Payable,is

Accepted Answer

A) $8,356. 
B) $7,496. 
C) $7,256. 
D) $8,596. 
A) $8,356. 
B) $7,496. 
C) $7,256. 
D) $8,596.

Question 20

Which of the following is an example of a commitment?

Accepted Answer

A) Purchasing agreement 
B) Note payable 
C) Revenue received in advance 
D) Dividend payable 
A) Purchasing agreement 
B) Note payable 
C) Revenue received in advance 
D) Dividend payable

Exam 11: Current Liabilities and Fair Value Accounting

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

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

Which of the following statements is true regarding the time value of money?

During May,Phone Mart sold 150 iphones for $200 each.Each camera had cost Phone Mart $108 to purchase and carried a one-year warranty.If 4 percent typically need to be replaced over the warranty period and two actually are replaced during May,the entry to record the Product Warranty Expense is

A company wishes to make annual contributions into a fund intended to retire $700,000 in debt five years from now.The amount to contribute each year equals $700,000

Second National Bank computes interest semiannually.If the annualized interest rate (APR)is currently 6 percent,the amount deposited today should be multiplied by which future value factor to calculate the amount that will accumulate by the end of 10 years?

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

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 entry that includes a debit to Payroll Taxes and Benefits Expense would also include credits to Social Security Tax Payable and Medicare Tax Payable.

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

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. -Payroll Taxes and Benefits Expense would be recorded for

Contrast the accounting problems presented by definitely determinable liabilities and those associated with estimated liabilities.

Use this information to answer the following question. -What amount must be deposited today to grow to $900 in three years,assuming an APR of 7 percent?

There is no limit to the amount of income subject to the FUTA tax.

A business accepts a 12 percent,$94,000 note due in three years.Assuming simple interest,how much will the business receive when the note falls due?

Compound interest is computed quarterly on $700 for seven years at 12 percent annual interest.The future value table is used by multiplying the $700 by which factor?

The amount recorded for Payroll Taxes and Benefits Expense is borne entirely by the employee.

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 amount of liabilities relating to payroll,other than Salaries Payable,is

Which of the following is an example of a commitment?

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Adjusting the Accounts

Completing the Accounting Cycle

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long -Term Assets

Accounting for Partnerships

Accounting for Corporations

Long Term Liabilities

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 and Capital Budgeting

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