Question 1

If a company uses a special payroll bank account:

Accepted Answer

A) The company does not need to issue paychecks. 
B) The company draws one check for the entire payroll on the regular bank account and deposits it in the payroll bank account. 
C) The company must use a federal depository bank for the payroll bank account. 
D) There is no need for a payroll register. 
E) There is no need to issue W-2's. 
A) The company does not need to issue paychecks. 
B) The company draws one check for the entire payroll on the regular bank account and deposits it in the payroll bank account. 
C) The company must use a federal depository bank for the payroll bank account. 
D) There is no need for a payroll register. 
E) There is no need to issue W-2's.

Question 2

On December 1, Victoria Company signed a 90-day, 6% note payable, with a face value of $15,000. What amount of interest expense is accrued at December 31, the company's year end, on the note?

Accepted Answer

A) $0 
B) $75 
C) $900 
D) $225 
E) $300 
A) $0 
B) $75 
C) $900 
D) $225 
E) $300

Question 3

The times interest earned ratio reflects:

Accepted Answer

A) A company's ability to pay its operating expenses on time. 
B) A company's ability to pay interest even if sales decline. 
C) A company's profitability. 
D) The relation between income and debt. 
E) The relation between assets and liabilities. 
A) A company's ability to pay its operating expenses on time. 
B) A company's ability to pay interest even if sales decline. 
C) A company's profitability. 
D) The relation between income and debt. 
E) The relation between assets and liabilities.

Question 4

To compute the amount of tax withheld from an employee's pay, employers can use a __________________________ table.

Accepted Answer

wage brack

Question 5

An employee earns $5,500 per month working for an employer. The FICA tax rate for Social Security is 6.2% of the first $118,500 earned each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 4.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The employee has $182 in federal income taxes withheld. The employee has voluntary deductions for health insurance of $150 and contributes $75 to a retirement plan each month. What is the amount of net pay for the employee for the month of January?

Accepted Answer

A) $4,827.00 
B) $4,672.25 
C) $4,628.25 
D) $4,386.25 
E) $4,430.25 
A) $4,827.00 
B) $4,672.25 
C) $4,628.25 
D) $4,386.25 
E) $4,430.25

Question 6

Richardson Fields receives $31,680 cash in advance ticket sales for 11 home soccer games. Record the advance ticket sales on March 31. Record the revenue earned for the first game played on August 17.

Accepted Answer

The answer of Richardson Fields receives $31,680 cash in advance...

Question 7

Debt guarantees are usually disclosed as a contingent liability.

Accepted Answer

A) True 
 B)False

Question 8

General Co. entered into the following transactions involving short-term notes payable.
On May 14, General purchased $40,000 merchandise from Steller Co., terms are 2/15, n/30. General uses the perpetual inventory system. On May 29, General replaced the May 14 account payable with a 60-day, $36,000 note bearing 8% annual along with paying $4,000 in cash. On July 28, General paid the amount due on the note at maturity.
Prepare journal entries for all the preceding transactions and events.

Accepted Answer

The answer of General Co. entered into the following transactions...

Question 9

Companies with many employees rarely use a special payroll bank account from which to pay employees.

Accepted Answer

A) True 
 B)False

Question 10

A company sold $12,000 worth of bicycles with an extended warranty. It estimates that 2% of these sales will result in warranty work. The current period's entry to record the warranty expense is:

Accepted Answer

A) Debit Warranty Expense $240; credit Cash $240. 
B) Debit Prepaid Warranties $240; credit Warranty Expense $240. 
C) Debit Estimated Warranty Liability $240; credit Cash $240. 
D) Debit Sales Allowances $240; credit Estimated Warranty Liability $240. 
E) Debit Warranty Expense $240; credit Estimated Warranty Liability $240. 
A) Debit Warranty Expense $240; credit Cash $240. 
B) Debit Prepaid Warranties $240; credit Warranty Expense $240. 
C) Debit Estimated Warranty Liability $240; credit Cash $240. 
D) Debit Sales Allowances $240; credit Estimated Warranty Liability $240. 
E) Debit Warranty Expense $240; credit Estimated Warranty Liability $240.

Question 11

On December 1, Watson Enterprises signed a $24,000, 60-day, 4% note payable as replacement of an account payable with Erikson Company. What amount of interest expense is accrued at December 31, the company's year-end, on the note?

Accepted Answer

A) $0 
B) $80 
C) $320 
D) $960 
E) $160 
A) $0 
B) $80 
C) $320 
D) $960 
E) $160

Question 12

A company has three employees. Total salaries for the month of January were $8,000. The federal income tax rate for all employees is 15%. The FICA-social security tax rate is 6.2% of the first $118,500 of earnings each calendar year and the FICA-Medicare tax rate is 1.45% of all earnings. Calculate the amount of employee taxes withheld and prepare the company's journal entry to record the January payroll assuming these were the only deductions.

Accepted Answer

The answer of A company has three employees. Total salaries...

Question 13

A _______________________ is a written promise to pay a specified amount on a definite future date within one year or the company's operating cycle, whichever is longer.

Accepted Answer

short-term

Question 14

A company has 90 employees and a weekly payroll of $117,000. The FICA-social security tax withheld totals $7,254 and the FICA-Medicare tax withheld totals $1,696.50. The total withholding for federal income tax is $16,500. Prepare the journal entry to accrue this week's salaries expense and withholdings, assuming no employees have exceeded the maximum taxable earnings for FICA-Social Security.

Accepted Answer

The answer of A company has 90 employees and a...

Question 15

A company borrowed $60,000 by signing a 60-day, 5% note payable from its bank. Compute the total cash payment due on the note's maturity date.

Accepted Answer

At maturity: $60,000

Question 16

When a company is obligated for sales taxes payable, it is reported as a(n):

Accepted Answer

A) Estimated liability. 
B) Contingent liability. 
C) Current liability. 
D) Business expense. 
E) Long-term liability. 
A) Estimated liability. 
B) Contingent liability. 
C) Current liability. 
D) Business expense. 
E) Long-term liability.

Question 17

Furniture World is required by law to collect and remit sales taxes to the state. If Furniture World has $78,000 of cash sales that are subject to a 6% sales tax, what is the journal entry to record the cash sales?

Accepted Answer

A) Debit Cash $82,680; credit Sales $78,000; credit Sales Taxes Payable $4,680. 
B) Debit Sales Taxes Payable $4,680; debit Cash $73,220; credit Sales $78,000. 
C) Debit Cash $78,000; credit Sales $78,000; and record the taxes when paid. 
D) Debit Cash $78,000; credit Sales $73,320; credit Sales Taxes Payable $4,680. 
E) Debit Accounts Receivable $82,680; credit Sales $78,000; credit Sales Taxes Payable $4,680. 
A) Debit Cash $82,680; credit Sales $78,000; credit Sales Taxes Payable $4,680. 
B) Debit Sales Taxes Payable $4,680; debit Cash $73,220; credit Sales $78,000. 
C) Debit Cash $78,000; credit Sales $78,000; and record the taxes when paid. 
D) Debit Cash $78,000; credit Sales $73,320; credit Sales Taxes Payable $4,680. 
E) Debit Accounts Receivable $82,680; credit Sales $78,000; credit Sales Taxes Payable $4,680.

Question 18

A known obligation of an uncertain amount that can at least be reasonably estimated is reported as an estimated liability.

Accepted Answer

A) True 
 B)False

Question 19

Victory Auto Sales, a used car dealership, offers a one-year or 12,000 mile warranty covering parts on all vehicles it sells. The dealer's experience shows that warranty expense averages about 3% of a car's selling price. During July, Victory sold 7 cars for a total of $105,000. The entry to record the estimated expense and liability related to its July sales is:

Accepted Answer

A) Debit Warranty Expense $3,150; credit Sales $3,150. 
B) Debit Warranty Expense $3,150; credit Estimated Warranty Liability $3,150. 
C) Debit Sales $450; credit Estimated Warranty Liability $450. 
D) Debit Warranty Expense $450; credit Estimated Warranty Liability $450. 
E) Debit Sales Returns and Allowances $22,050; credit Parts Inventory $22,050. 
A) Debit Warranty Expense $3,150; credit Sales $3,150. 
B) Debit Warranty Expense $3,150; credit Estimated Warranty Liability $3,150. 
C) Debit Sales $450; credit Estimated Warranty Liability $450. 
D) Debit Warranty Expense $450; credit Estimated Warranty Liability $450. 
E) Debit Sales Returns and Allowances $22,050; credit Parts Inventory $22,050.

Question 20

In the accounting records of a defendant, lawsuits:

Accepted Answer

A) Are estimated liabilities. 
B) Should always be recorded. 
C) Should always be disclosed. 
D) Should be recorded if payment for damages is probable and the amount can be reasonably estimated. 
E) Should never be recorded. 
A) Are estimated liabilities. 
B) Should always be recorded. 
C) Should always be disclosed. 
D) Should be recorded if payment for damages is probable and the amount can be reasonably estimated. 
E) Should never be recorded.

If a company uses a special payroll bank account:

On December 1, Victoria Company signed a 90-day, 6% note payable, with a face value of $15,000. What amount of interest expense is accrued at December 31, the company's year end, on the note?

The times interest earned ratio reflects:

To compute the amount of tax withheld from an employee's pay, employers can use a __________________________ table.

Richardson Fields receives $31,680 cash in advance ticket sales for 11 home soccer games. Record the advance ticket sales on March 31. Record the revenue earned for the first game played on August 17.

Debt guarantees are usually disclosed as a contingent liability.

Companies with many employees rarely use a special payroll bank account from which to pay employees.

A company sold $12,000 worth of bicycles with an extended warranty. It estimates that 2% of these sales will result in warranty work. The current period's entry to record the warranty expense is:

On December 1, Watson Enterprises signed a $24,000, 60-day, 4% note payable as replacement of an account payable with Erikson Company. What amount of interest expense is accrued at December 31, the company's year-end, on the note?

A _______________________ is a written promise to pay a specified amount on a definite future date within one year or the company's operating cycle, whichever is longer.

A company borrowed $60,000 by signing a 60-day, 5% note payable from its bank. Compute the total cash payment due on the note's maturity date.

When a company is obligated for sales taxes payable, it is reported as a(n):

Furniture World is required by law to collect and remit sales taxes to the state. If Furniture World has $78,000 of cash sales that are subject to a 6% sales tax, what is the journal entry to record the cash sales?

A known obligation of an uncertain amount that can at least be reasonably estimated is reported as an estimated liability.

In the accounting records of a defendant, lawsuits:

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Reporting and Analyzing Partnerships

Filters

Exam 9: Reporting and Analyzing Current Liabilities

If a company uses a special payroll bank account:

On December 1, Victoria Company signed a 90-day, 6% note payable, with a face value of $15,000. What amount of interest expense is accrued at December 31, the company's year end, on the note?

The times interest earned ratio reflects:

To compute the amount of tax withheld from an employee's pay, employers can use a __________________________ table.

Richardson Fields receives $31,680 cash in advance ticket sales for 11 home soccer games. Record the advance ticket sales on March 31. Record the revenue earned for the first game played on August 17.

Debt guarantees are usually disclosed as a contingent liability.

Companies with many employees rarely use a special payroll bank account from which to pay employees.

A company sold $12,000 worth of bicycles with an extended warranty. It estimates that 2% of these sales will result in warranty work. The current period's entry to record the warranty expense is:

On December 1, Watson Enterprises signed a $24,000, 60-day, 4% note payable as replacement of an account payable with Erikson Company. What amount of interest expense is accrued at December 31, the company's year-end, on the note?

A _______________________ is a written promise to pay a specified amount on a definite future date within one year or the company's operating cycle, whichever is longer.

A company borrowed $60,000 by signing a 60-day, 5% note payable from its bank. Compute the total cash payment due on the note's maturity date.

When a company is obligated for sales taxes payable, it is reported as a(n):

Furniture World is required by law to collect and remit sales taxes to the state. If Furniture World has $78,000 of cash sales that are subject to a 6% sales tax, what is the journal entry to record the cash sales?

A known obligation of an uncertain amount that can at least be reasonably estimated is reported as an estimated liability.

In the accounting records of a defendant, lawsuits:

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Reporting and Analyzing Partnerships

Filters