Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

At the time a company signs a contract to pay an employee a certain salary in the future,it records a liability.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Dividends Payable is an example of a(n)

Accepted Answer

A) contingent liability. 
B) definitely determinable liability. 
C) estimated liability. 
D) long-term liability. 
A) contingent liability. 
B) definitely determinable liability. 
C) estimated liability. 
D) long-term liability.

Question 5

Hilda wishes to deposit an amount into her savings account that will enable her to withdraw $1,600 per year for the next four years.She should deposit an amount equal to $1,600 multiplied by the

Accepted Answer

A) present value of a single sum factor. 
B) present value of an ordinary annuity factor. 
C) future value of a single sum factor. 
D) future value of an ordinary annuity factor. 
A) present value of a single sum factor. 
B) present value of an ordinary annuity factor. 
C) future value of a single sum factor. 
D) future value of an ordinary annuity factor.

Question 6

The higher the interest rate assumed,the

Accepted Answer

A) higher the present value of an ordinary annuity. 
B) more one must deposit today to accumulate to a desired sum. 
C) lower the future value of a sum invested in the bank today. 
D) lower the present value of a sum due in the future. 
A) higher the present value of an ordinary annuity. 
B) more one must deposit today to accumulate to a desired sum. 
C) lower the future value of a sum invested in the bank today. 
D) lower the present value of a sum due in the future.

Question 7

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

Accepted Answer

A) Debit Interest Receivable and credit Interest Income. 
B) Debit Interest Expense and credit Cash. 
C) Debit Interest Expense and credit Interest Payable. 
D) Debit Cash and credit Notes Payable. 
A) Debit Interest Receivable and credit Interest Income. 
B) Debit Interest Expense and credit Cash. 
C) Debit Interest Expense and credit Interest Payable. 
D) Debit Cash and credit Notes Payable.

Question 8

Margo Dhang is paid $8 per hour plus time-and-one-half for hours over 40 for a given week.During the week of January 21,Margo worked 46 hours.Social security taxes are 6.2 percent,Medicare taxes are 1.45 percent,$50 is withheld for federal income taxes,$12 is withheld for state income taxes,and $15 is withheld for medical insurance.In addition,Margo's employer must pay Social Security taxes of 6.2 percent,Medicare taxes of 1.45 percent,state unemployment taxes of 5.4 percent,and federal unemployment taxes of 0.8 percent.Calculate (a)Margo's gross earnings, (b)Margo's take-home pay, (c)the employer's payroll taxes expense,and (d)the total cost of employing Margo for the week.Round all amounts to the nearest penny.
a.$392.00 [(40 ´ $8)+ (6 ´ $12)]

Accepted Answer

b.$285.02 [392 - ($392 × .062)

Question 9

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)

Question 10

Expected obligations arising from programs,such as frequent flyer miles,are usually recorded as a reduction in sales (in a contra-sales account)with a related liability.

Accepted Answer

A) True 
 B)False

Question 11

Marta Company had cash sales of $120,000 for the month of November.Sales are subject to a 4.5 percent sales tax and a 6 percent excise tax.In the journal provided,prepare a compound entry to record Marta's sales and related sales and excise taxes for the month.

Accepted Answer

The answer of Marta Company had cash sales of $120,000...

Question 12

Lawsuits against a company in connection with an industrial accident would not be listed in the contingent liabilities section on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 13

A company receives $200,of which $8 is for sales tax and $12 is for excise tax.The journal entry to record the sale is:

Accepted Answer

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

Question 14

Which of the following typically would not be done to satisfy a current liability?

Accepted Answer

A) Use long-term assets to satisfy the liability 
B) Render a service to satisfy the liability 
C) Use current assets to satisfy the liability 
D) Take on another current liability to satisfy the liability 
A) Use long-term assets to satisfy the liability 
B) Render a service to satisfy the liability 
C) Use current assets to satisfy the liability 
D) Take on another current liability to satisfy the liability

Question 15

Which of the following does not represent a liability?

Accepted Answer

A) An obligation for estimated income taxes payable 
B) Interest that has accrued on a bank loan 
C) An obligation to pay for goods purchased,payable one year after purchase 
D) An obligation for future purchases of goods 
A) An obligation for estimated income taxes payable 
B) Interest that has accrued on a bank loan 
C) An obligation to pay for goods purchased,payable one year after purchase 
D) An obligation for future purchases of goods

Question 16

The FUTA tax rate most often actually paid by employers is 0.8 percent.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following most likely is an estimated liability?

Accepted Answer

A) Liability for vacation pay 
B) Payroll liabilities 
C) Unearned revenues 
D) Current portion of long-term debt 
A) Liability for vacation pay 
B) Payroll liabilities 
C) Unearned revenues 
D) Current portion of long-term debt

Question 18

Potential vacation pay should be accounted for as a commitment.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

For a contingent liability to be reflect

Question 20

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 to record the payroll taxes expense would include a credit to

Accepted Answer

A) Salaries Payable. 
B) Federal Income Taxes Payable. 
C) Social Security Tax Payable. 
D) Cash. 
A) Salaries Payable. 
B) Federal Income Taxes Payable. 
C) Social Security Tax Payable. 
D) Cash.

Exam 11: Current Liabilities and Fair Value Accounting

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

At the time a company signs a contract to pay an employee a certain salary in the future,it records a liability.

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

Dividends Payable is an example of a(n)

Hilda wishes to deposit an amount into her savings account that will enable her to withdraw $1,600 per year for the next four years.She should deposit an amount equal to $1,600 multiplied by the

The higher the interest rate assumed,the

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

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

Expected obligations arising from programs,such as frequent flyer miles,are usually recorded as a reduction in sales (in a contra-sales account)with a related liability.

Marta Company had cash sales of $120,000 for the month of November.Sales are subject to a 4.5 percent sales tax and a 6 percent excise tax.In the journal provided,prepare a compound entry to record Marta's sales and related sales and excise taxes for the month.

Lawsuits against a company in connection with an industrial accident would not be listed in the contingent liabilities section on the balance sheet.

A company receives $200,of which $8 is for sales tax and $12 is for excise tax.The journal entry to record the sale is:

Which of the following typically would not be done to satisfy a current liability?

Which of the following does not represent a liability?

The FUTA tax rate most often actually paid by employers is 0.8 percent.

Which of the following most likely is an estimated liability?

Potential vacation pay should be accounted for as a commitment.

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

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 to record the payroll taxes expense would include a credit to

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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