Question 1

A liability is recognized when

Accepted Answer

A) the exact due date is known. 
B) it is paid for. 
C) an obligation has arisen. 
D) the exact amount of the liability is known. 
A) the exact due date is known. 
B) it is paid for. 
C) an obligation has arisen. 
D) the exact amount of the liability is known.

Question 2

Company A's current assets = $10,000,total assets = $26,000,current liabilities = $7,000 and total liabilities = $47,000.What is Company A's working ratio?

Accepted Answer

A) $3,000 
B) $21,000 
C) 1.43 
D) 0.55 
A) $3,000 
B) $21,000 
C) 1.43 
D) 0.55

Question 3

If the amount of a liability cannot be exactly determined,it should not be recorded.

Accepted Answer

A) True 
 B)False

Question 4

The term salaries refers to the compensation of employees who are paid at an hourly rate.

Accepted Answer

A) True 
 B)False

Question 5

Use this information to answer the following question.   A single deposit of $7,000 made at the beginning of period 1 and earning 12 percent interest compounded annually would grow to how much at the end of three years?

Accepted Answer

A) $7,840 
B) $9,835 
C) $8,778 
D) $23,618 
A) $7,840 
B) $9,835 
C) $8,778 
D) $23,618

Question 6

The annual interest earned on an amount deposited into a bank account will be the same each year when compound interest is used.

Accepted Answer

A) True 
 B)False

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

Which of the following is not a component of the operating cycle?

Accepted Answer

A) Sales to customers 
B) Collection of accounts receivable 
C) Recognition of depreciation 
D) Purchases from suppliers 
A) Sales to customers 
B) Collection of accounts receivable 
C) Recognition of depreciation 
D) Purchases from suppliers

Question 9

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) Cash 180 Sales 180 
B) Excise Tax Expense 12 Sales Tax Expense 8
Cash 180
Sales 200 
C) Sales 200 Cash 200 
D) Cash 200 Sales Tax Payable 8
Excise Tax Payable 12
Sales 180 
A) Cash 180 Sales 180 
B) Excise Tax Expense 12 Sales Tax Expense 8
Cash 180
Sales 200 
C) Sales 200 Cash 200 
D) Cash 200 Sales Tax Payable 8
Excise Tax Payable 12
Sales 180

Question 10

To find the days' payable,

Accepted Answer

A) divide 365 by the payables turnover. 
B) multiply the payables turnover by 365. 
C) divide the payables turnover by 365. 
D) subtract 365 from the payables turnover. 
A) divide 365 by the payables turnover. 
B) multiply the payables turnover by 365. 
C) divide the payables turnover by 365. 
D) subtract 365 from the payables turnover.

Question 11

On January 2,2014,Lionel Company issued $40,000 of notes payable,of which $10,000 is due on January 2 for each of the next four years.The proper balance sheet presentation on December 31,2014,is

Accepted Answer

A) Current Liabilities,$40,000. 
B) Current Liabilities,$10,000; Long-Term Liabilities,$30,000. 
C) Long-Term Liabilities,$40,000. 
D) Current Liabilities,$30,000; Long-Term Liabilities,$10,000. 
A) Current Liabilities,$40,000. 
B) Current Liabilities,$10,000; Long-Term Liabilities,$30,000. 
C) Long-Term Liabilities,$40,000. 
D) Current Liabilities,$30,000; Long-Term Liabilities,$10,000.

Question 12

Which of the following is a contingent liability?

Accepted Answer

A) Note payable with interest included in face amount 
B) Excise tax payable 
C) Property tax liability 
D) Disputed additional tax assessment 
A) Note payable with interest included in face amount 
B) Excise tax payable 
C) Property tax liability 
D) Disputed additional tax assessment

Question 13

Calculate answers to the following scenarios:
a. To what amount will an $800 deposit grow,assuming an APR of 9 percent paid annually,5 years,and simple interest?
b. To what amount will a $500 deposit grow,assuming an APR of 10 percent paid semiannually,three years,and simple interest?

Accepted Answer

a.$1,160 [($800 × 0.

Question 14

When a business sells an item and collects a state sales tax on it,a current liability to the state arises.

Accepted Answer

A) True 
 B)False

Question 15

Novack Company has current assets of $100,000,total assets of $300,000,current liabilities of $75,000 of which accounts payable are $35,000,and total liabilities of $150,000.Calculate Novack's working capital and current ratio.

Accepted Answer

The answer of Novack Company has current assets of $100,000,total...

Question 16

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 17

In a deferred payment arrangement,interest is charged only if it is stated.

Accepted Answer

A) True 
 B)False

Question 18

The days' payable shows the maximum time a company takes to pay its accounts payable.

Accepted Answer

A) True 
 B)False

Question 19

Commercial paper consists of secured loans that are sold to the public.

Accepted Answer

A) True 
 B)False

Question 20

Failure to record a liability probably will

Accepted Answer

A) result in an overstated net income. 
B) result in overstated total liabilities and stockholders' equity. 
C) have no effect on net income. 
D) result in overstated total assets. 
A) result in an overstated net income. 
B) result in overstated total liabilities and stockholders' equity. 
C) have no effect on net income. 
D) result in overstated total assets.

A liability is recognized when

Company A's current assets = $10,000,total assets = $26,000,current liabilities = $7,000 and total liabilities = $47,000.What is Company A's working ratio?

If the amount of a liability cannot be exactly determined,it should not be recorded.

The term salaries refers to the compensation of employees who are paid at an hourly rate.

Use this information to answer the following question. A single deposit of $7,000 made at the beginning of period 1 and earning 12 percent interest compounded annually would grow to how much at the end of three years?

The annual interest earned on an amount deposited into a bank account will be the same each year when compound interest is used.

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

Which of the following is not a component of the operating cycle?

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:

To find the days' payable,

On January 2,2014,Lionel Company issued $40,000 of notes payable,of which $10,000 is due on January 2 for each of the next four years.The proper balance sheet presentation on December 31,2014,is

Which of the following is a contingent liability?

Calculate answers to the following scenarios: a. To what amount will an $800 deposit grow,assuming an APR of 9 percent paid annually,5 years,and simple interest? b. To what amount will a $500 deposit grow,assuming an APR of 10 percent paid semiannually,three years,and simple interest?

When a business sells an item and collects a state sales tax on it,a current liability to the state arises.

Novack Company has current assets of $100,000,total assets of $300,000,current liabilities of $75,000 of which accounts payable are $35,000,and total liabilities of $150,000.Calculate Novack's working capital and current ratio.

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

In a deferred payment arrangement,interest is charged only if it is stated.

The days' payable shows the maximum time a company takes to pay its accounts payable.

Commercial paper consists of secured loans that are sold to the public.

Failure to record a liability probably will

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

A liability is recognized when

Company A's current assets = $10,000,total assets = $26,000,current liabilities = $7,000 and total liabilities = $47,000.What is Company A's working ratio?

If the amount of a liability cannot be exactly determined,it should not be recorded.

The term salaries refers to the compensation of employees who are paid at an hourly rate.

Use this information to answer the following question. A single deposit of $7,000 made at the beginning of period 1 and earning 12 percent interest compounded annually would grow to how much at the end of three years?

The annual interest earned on an amount deposited into a bank account will be the same each year when compound interest is used.

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

Which of the following is not a component of the operating cycle?

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:

To find the days' payable,

On January 2,2014,Lionel Company issued $40,000 of notes payable,of which $10,000 is due on January 2 for each of the next four years.The proper balance sheet presentation on December 31,2014,is

Which of the following is a contingent liability?

Calculate answers to the following scenarios: a. To what amount will an $800 deposit grow,assuming an APR of 9 percent paid annually,5 years,and simple interest? b. To what amount will a $500 deposit grow,assuming an APR of 10 percent paid semiannually,three years,and simple interest?

When a business sells an item and collects a state sales tax on it,a current liability to the state arises.

Novack Company has current assets of $100,000,total assets of $300,000,current liabilities of $75,000 of which accounts payable are $35,000,and total liabilities of $150,000.Calculate Novack's working capital and current ratio.

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

In a deferred payment arrangement,interest is charged only if it is stated.

The days' payable shows the maximum time a company takes to pay its accounts payable.

Commercial paper consists of secured loans that are sold to the public.

Failure to record a liability probably will

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