Question 1

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 2

A contingent liability should be entered into the accounting records if it is both probable and reasonably estimable.

Accepted Answer

A) True 
 B)False

Question 3

A customer is injured using a company's product.The potential liability that may result is called a(n)

Accepted Answer

A) contingent liability. 
B) estimated liability. 
C) definitely determinable liability. 
D) estimated warranty liability. 
A) contingent liability. 
B) estimated liability. 
C) definitely determinable liability. 
D) estimated warranty liability.

Question 4

McAfee Corporation borrowed $20 million to finance the construction of a new building.In addition to the annual interest that is not included in the face,one-tenth of the principal amount borrowed is to be repaid each year.If the borrowing occurred one month prior to year end,how should the loan be presented on the upcoming balance sheet?

Accepted Answer

Eighteen million dollars of the loan sho

Question 5

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.

Question 6

For notes payable whose interest is stated separately,the adjusting entry would consist of a debit to Interest Expense and a credit to Interest Payable.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

A business accepts a 9 percent,$50,000 note due in 120 days.Assuming simple interest,how much (amount rounded)will the business receive when the note falls due?

Accepted Answer

A) $50,000 
B) $50,150 
C) $51,480 
D) $54,520 
A) $50,000 
B) $50,150 
C) $51,480 
D) $54,520

Question 9

Saybrook Company purchased a machine on January 2,2014.Under the terms of the purchase agreement,the company is required to make 14 quarterly installment payments of $23,000 each,beginning April 1,2014.Assuming 16 percent interest compounded quarterly,determine the purchase price of the machine.Use future value and/or present value tables in calculating your answer.

Accepted Answer

Purchase price = $23

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

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 12

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

Accepted Answer

A) True 
 B)False

Question 13

When a company discounts a note receivable at the bank,it has a contingent liability.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

An asset purchased according to a deferred payment plan should be recorded based on the total cash paid.

Accepted Answer

A) True 
 B)False

Question 16

Decision makers rely on the future values,rather than on the present values of future cash flows.

Accepted Answer

A) True 
 B)False

Question 17

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.

Accepted Answer

a.$392.00 [(40 × $8)+ (6 × $12

Question 18

Which of the following is a tax borne by the employer but not the employee?

Accepted Answer

A) State income tax 
B) FUTA tax 
C) Medicare tax 
D) Social security tax 
A) State income tax 
B) FUTA tax 
C) Medicare tax 
D) Social security tax

Question 19

If an accrued liability for salaries is not recorded,income for the following period will be overstated.

Accepted Answer

A) True 
 B)False

Question 20

All of the following are estimated liabilities except

Accepted Answer

A) liability for vacation pay. 
B) payroll liabilities. 
C) product warranty liability. 
D) property tax liability. 
A) liability for vacation pay. 
B) payroll liabilities. 
C) product warranty liability. 
D) property tax liability.

Dividends Payable is an example of a(n)

A contingent liability should be entered into the accounting records if it is both probable and reasonably estimable.

A customer is injured using a company's product.The potential liability that may result is called a(n)

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

For notes payable whose interest is stated separately,the adjusting entry would consist of a debit to Interest Expense and a credit to Interest Payable.

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

A business accepts a 9 percent,$50,000 note due in 120 days.Assuming simple interest,how much (amount rounded)will the business receive when the note falls due?

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

Which of the following does not represent a liability?

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

When a company discounts a note receivable at the bank,it has a contingent liability.

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

An asset purchased according to a deferred payment plan should be recorded based on the total cash paid.

Decision makers rely on the future values,rather than on the present values of future cash flows.

Which of the following is a tax borne by the employer but not the employee?

If an accrued liability for salaries is not recorded,income for the following period will be overstated.

All of the following are estimated liabilities except

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

Supplement: 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

Supplement: the Statement of Cash Flows

Financial Statement Analysis

Accounting for Investments

Filters

Exam 11: Current Liabilities and Fair Value Accounting

Dividends Payable is an example of a(n)

A contingent liability should be entered into the accounting records if it is both probable and reasonably estimable.

A customer is injured using a company's product.The potential liability that may result is called a(n)

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

For notes payable whose interest is stated separately,the adjusting entry would consist of a debit to Interest Expense and a credit to Interest Payable.

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

A business accepts a 9 percent,$50,000 note due in 120 days.Assuming simple interest,how much (amount rounded)will the business receive when the note falls due?

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

Which of the following does not represent a liability?

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

When a company discounts a note receivable at the bank,it has a contingent liability.

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

An asset purchased according to a deferred payment plan should be recorded based on the total cash paid.

Decision makers rely on the future values,rather than on the present values of future cash flows.

Which of the following is a tax borne by the employer but not the employee?

If an accrued liability for salaries is not recorded,income for the following period will be overstated.

All of the following are estimated liabilities except

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

Supplement: 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

Supplement: the Statement of Cash Flows

Financial Statement Analysis

Accounting for Investments

Filters