Question 1

Unearned revenues are current liabilities.

Accepted Answer

A) True 
 B)False

Question 2

During August, Boxer Company sells $356,000 in merchandise that has a one year warranty. Experience shows that warranty expenses average about 5% of the selling price. The warranty liability account has a credit balance of $1,800 before adjustment. Customers returned merchandise for warranty repairs during the month that used $9,400 in parts for repairs. The entry to record the customer warranty repairs is:

Accepted Answer

A) Debit Warranty Expense $17,800; credit Estimated Warranty Liability $17,800. 
B) Debit Warranty Expense $9,400; credit Estimated Warranty Liability $9,400. 
C) Debit Warranty Expense $14,400; credit Estimated Warranty Liability $14,400. 
D) Debit Estimated Warranty Liability $9,400; credit Parts Inventory $9,400. 
E) Debit Estimated Warranty Liability $17,800; credit Parts Inventory $17,800. 
A) Debit Warranty Expense $17,800; credit Estimated Warranty Liability $17,800. 
B) Debit Warranty Expense $9,400; credit Estimated Warranty Liability $9,400. 
C) Debit Warranty Expense $14,400; credit Estimated Warranty Liability $14,400. 
D) Debit Estimated Warranty Liability $9,400; credit Parts Inventory $9,400. 
E) Debit Estimated Warranty Liability $17,800; credit Parts Inventory $17,800.

Question 3

A liability may exist even if there is uncertainty about whom to pay, when to pay, or how much to pay.

Accepted Answer

A) True 
 B)False

Question 4

What is a short-term note payable? Explain the accounting issues related to notes payable.

Accepted Answer

A short-term note payable is a written p

Question 5

Explain the responsibilities of and the accounting by employers for deductions from employee payroll.

Accepted Answer

Employers are responsible for collecting

Question 6

Gladstone Company liabilities include $13,500 of accounts payable, $8,000 of wages payable, $6,300 of unearned revenue, $32,000 note payable due in 18 months, $70,000 of 10-year bonds payable, and $41,000 of taxes payable. Gladstone's current liabilities equal:

Accepted Answer

A) $59,800 
B) $68,800 
C) $60,800 
D) $62,500 
E) $100,800 
A) $59,800 
B) $68,800 
C) $60,800 
D) $62,500 
E) $100,800

Question 7

A company sells tablet computers for $1,300 each. The price includes a two-year warranty. During the current year, the company sells 400 tablets. On the basis of past experience, the warranty repair costs are estimated to be $280 per tablet. The actual warranty costs (paid in cash) by the company during the current year were $65,000. Prepare general journal entries to record the (a) estimated warranty expense and (b) warranty repair costs during current year.

Accepted Answer

The answer of A company sells tablet computers for $1,300...

Question 8

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 company should:

Accepted Answer

A) Consider the warranty expense a remote liability since the rate is only 2%. 
B) Recognize warranty expense at the time the warranty work is performed. 
C) Recognize warranty expense and liability in the year of the sale. 
D) Consider the warranty expense a contingent liability. 
E) Recognize warranty liability when the company purchases the bicycles. 
A) Consider the warranty expense a remote liability since the rate is only 2%. 
B) Recognize warranty expense at the time the warranty work is performed. 
C) Recognize warranty expense and liability in the year of the sale. 
D) Consider the warranty expense a contingent liability. 
E) Recognize warranty liability when the company purchases the bicycles.

Question 9

A short-term note payable:

Accepted Answer

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. 
B) Is a contingent liability. 
C) Is an estimated liability. 
D) Is not a liability until the due date. 
E) Cannot be used to extend the payment period for an account payable. 
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. 
B) Is a contingent liability. 
C) Is an estimated liability. 
D) Is not a liability until the due date. 
E) Cannot be used to extend the payment period for an account payable.

Question 10

______________ are amounts owed to suppliers for products or services purchased on credit.

Accepted Answer

Trade acco

Question 11

Employees earn vacation pay at the rate of one day per month. During the month of June, 10 employees qualify for one vacation day each. Their average daily wage is $150 per day. Which of the following is the necessary adjusting journal entry to record the June vacation benefits?

Accepted Answer

A) Debit Vacation Benefits Expense $1,500; credit Prepaid Vacation Benefits $1,500. 
B) Debit Vacation Benefits Expense $1,500; credit Vacation Benefits Payable $1,500. 
C) Debit Payroll Tax Expense $1,500; credit Payroll Taxes Payable $1,500. 
D) Debit Prepaid Vacation Benefits $1,500; credit Vacation Benefits Payable $1,500. 
E) Debit Vacation Benefits Payable; credit Vacation Benefits Expense $1,500. 
A) Debit Vacation Benefits Expense $1,500; credit Prepaid Vacation Benefits $1,500. 
B) Debit Vacation Benefits Expense $1,500; credit Vacation Benefits Payable $1,500. 
C) Debit Payroll Tax Expense $1,500; credit Payroll Taxes Payable $1,500. 
D) Debit Prepaid Vacation Benefits $1,500; credit Vacation Benefits Payable $1,500. 
E) Debit Vacation Benefits Payable; credit Vacation Benefits Expense $1,500.

Question 12

Obligations not due within one year or the company's operating cycle, whichever is longer, are reported as current liabilities.

Accepted Answer

A) True 
 B)False

Question 13

Identify and explain the types of employer payroll taxes, both those that are withheld from employees and those that are the responsibility of the employer.

Accepted Answer

Employers are required to contribute an

Question 14

An employer has an employee benefit package that includes employer-paid health insurance and an employer-paid retirement program. During March, the employer paid $5,500 for health insurance, and contributed to the employee retirement program 10% of the employees' $120,000 gross salaries. Prepare the journal entry to record these employee benefits.

Accepted Answer

The answer of An employer has an employee benefit package...

Question 15

A contingent liability is:

Accepted Answer

A) Always of a specific amount. 
B) A potential obligation that depends on a future event arising from a past transaction or event. 
C) An obligation not requiring future payment. 
D) An obligation arising from the purchase of goods or services on credit. 
E) An obligation arising from a future event. 
A) Always of a specific amount. 
B) A potential obligation that depends on a future event arising from a past transaction or event. 
C) An obligation not requiring future payment. 
D) An obligation arising from the purchase of goods or services on credit. 
E) An obligation arising from a future event.

Question 16

Obligations due within one year or the company's operating cycle, whichever is longer, are ________________________.

Accepted Answer

The answer of Obligations due within one year or the...

Question 17

FICA taxes include:

Accepted Answer

A) Social Security and Medicare taxes. 
B) Charitable giving. 
C) Employee state income tax. 
D) Federal and state unemployment taxes. 
E) Employee federal income tax. 
A) Social Security and Medicare taxes. 
B) Charitable giving. 
C) Employee state income tax. 
D) Federal and state unemployment taxes. 
E) Employee federal income tax.

Question 18

Employers must pay FICA taxes twice the amount of the FICA taxes withheld from their employees.

Accepted Answer

A) True 
 B)False

Question 19

Deacon Company provides you with following information related to payroll transactions for the month of May. Prepare journal entries to record the transactions for May.   a. Record the May payroll using the payroll register information given above.
b. Record the employer's payroll taxes resulting from the May payroll. The company had a state unemployment tax rate of 3.5% of the first $7,000 paid each employee. Only $42,000 of the current months salaries are subject to unemployment taxes. The federal rate is 0.6%.
c. Issue a check to Reliant Bank in payment of the May FICA and employee taxes.
d. Issue a check to the state for the payment of the SUTA taxes for the month of May.
e. Issue a check to Reliant Bank for the first quarter in FUTA taxes in the amount of $1,020.

Accepted Answer

The answer of Deacon Company provides you with following information...

Question 20

A company's employer payroll tax rates are 0.6% for federal unemployment taxes, 5.4% for state unemployment taxes, 6.2% for FICA social security taxes on earnings up to $118,500 per calendar year, and 1.45% for FICA Medicare taxes on all earnings. Compute the W-2 Wage and Tax Statement information required below for the following employees:   
A.Baylor
C.Jasmine
W-2 Information:
________
________
Federal Income Tax Withheld
________
________
Wages, Tips, Other Compensation
________
________
Social Security Tax Withheld
________
________
Social Security Wages
________
________
Medicare Tax Withheld
________
________
Medicare Wages
________
________

Accepted Answer

A. Baylor
C. Jasmine
W-2 Information:
Fe

Unearned revenues are current liabilities.

A liability may exist even if there is uncertainty about whom to pay, when to pay, or how much to pay.

What is a short-term note payable? Explain the accounting issues related to notes payable.

Explain the responsibilities of and the accounting by employers for deductions from employee payroll.

Gladstone Company liabilities include $13,500 of accounts payable, $8,000 of wages payable, $6,300 of unearned revenue, $32,000 note payable due in 18 months, $70,000 of 10-year bonds payable, and $41,000 of taxes payable. Gladstone's current liabilities equal:

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 company should:

A short-term note payable:

______________ are amounts owed to suppliers for products or services purchased on credit.

Employees earn vacation pay at the rate of one day per month. During the month of June, 10 employees qualify for one vacation day each. Their average daily wage is $150 per day. Which of the following is the necessary adjusting journal entry to record the June vacation benefits?

Obligations not due within one year or the company's operating cycle, whichever is longer, are reported as current liabilities.

Identify and explain the types of employer payroll taxes, both those that are withheld from employees and those that are the responsibility of the employer.

A contingent liability is:

Obligations due within one year or the company's operating cycle, whichever is longer, are ________________________.

FICA taxes include:

Employers must pay FICA taxes twice the amount of the FICA taxes withheld from their employees.

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

Unearned revenues are current liabilities.

A liability may exist even if there is uncertainty about whom to pay, when to pay, or how much to pay.

What is a short-term note payable? Explain the accounting issues related to notes payable.

Explain the responsibilities of and the accounting by employers for deductions from employee payroll.

Gladstone Company liabilities include $13,500 of accounts payable, $8,000 of wages payable, $6,300 of unearned revenue, $32,000 note payable due in 18 months, $70,000 of 10-year bonds payable, and $41,000 of taxes payable. Gladstone's current liabilities equal:

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 company should:

A short-term note payable:

______________ are amounts owed to suppliers for products or services purchased on credit.

Employees earn vacation pay at the rate of one day per month. During the month of June, 10 employees qualify for one vacation day each. Their average daily wage is $150 per day. Which of the following is the necessary adjusting journal entry to record the June vacation benefits?

Obligations not due within one year or the company's operating cycle, whichever is longer, are reported as current liabilities.

Identify and explain the types of employer payroll taxes, both those that are withheld from employees and those that are the responsibility of the employer.

A contingent liability is:

Obligations due within one year or the company's operating cycle, whichever is longer, are ________________________.

FICA taxes include:

Employers must pay FICA taxes twice the amount of the FICA taxes withheld from their employees.

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