Question 1

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 on the note? (Use 360 days a year.)

Accepted Answer

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

Question 2

Describe employer responsibilities for reporting payroll taxes.(To the extent possible,reference the form to be filed for each tax.)

Accepted Answer

Employers are required to report FICA ta...

Question 3

The deferred income tax liability:

Accepted Answer

A)  Results from the income tax expense reported on the income statement differing from the amount of income taxes payable to the government.
B)  Is a contingent liability.
C)  Can result in a deferred income tax asset.
D)  Is never recorded.
E)  Is recorded whether or not the difference between taxable income and financial accounting income is permanent or temporary.F) D) and E)
G) C) and D)

Question 4

Obligations to be paid within one year or the company's operating cycle,whichever is longer,are:

Accepted Answer

A)  Current assets.
B)  Current liabilities.
C)  Earned revenues.
D)  Operating cycle liabilities.
E)  Bills.F) A) and C)
G) A) and B)

Question 5

A company has a selling price of $1,800 each for its printers.Each printer has a 2 year warranty that covers replacement of defective parts.It is estimated that 2% of all printers sold will be returned under the warranty at an average cost of $150 each.During November,the company sold 30,000 printers,and 400 printers were serviced under the warranty.What is the company's warranty expense for the month of November?

Accepted Answer

A)  $26,000
B)  $45,000
C)  $55,000
D)  $60,000
E)  $90,000F) B) and C)
G) None of the above

Question 6

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 7

Employee vacation benefits:

Accepted Answer

A)  Are estimated liabilities.
B)  Are contingent liabilities.
C)  Are recorded as an expense when the employee takes a vacation.
D)  Are recorded as an expense when the employee retires.
E)  Increase net income.F) A) and B)
G) A) and C)

Question 8

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% and the FICA-Medicare tax rate is 1.45%.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 for...

Question 9

The amount of FICA tax that employers must pay is exactly twice the amount of the FICA taxes withheld from their employees.

Accepted Answer

A) True 
 B)False

Question 10

________ are probable future payments of assets or services that a company is presently obligated to make as a result of past transactions or events.

Accepted Answer

The answer of ________ are probable future payments of assets...

Question 11

The payroll records of a company provided the following data for the current weekly pay period ended March 12.

Assume that the Social Security portion of the FICA taxes is 6.2% on the first $128,400 and the Medicare portion is 1.45% of all wages paid to each employee for this pay period.The federal and state unemployment tax rates are 0.6% and 5.4%,respectively,on the first $7,000 paid to each employee.Calculate the net pay for each employee.

Accepted Answer

The answer of The payroll records of a company provided...

Question 12

In order to be reported,liabilities must:

Accepted Answer

A)  Be certain.
B)  Sometimes be estimated.
C)  Be for a specific amount.
D)  Always have a definite date for payment.
E)  Involve an outflow of cash.F) A) and E)
G) None of the above

Question 13

Uncertainties such as natural disasters are:

Accepted Answer

A)  Not contingent liabilities because they are future events not arising from past transactions or events.
B)  Contingent liabilities because they are future events arising from past transactions or events.
C)  Disclosed because of their usefulness to financial statements.
D)  Estimated liabilities because the amounts are uncertain.
E)  Reported in the same way as debt guarantees.F) B) and D)
G) A) and C)

Question 14

Obligations not expected to be paid within the longer of one year or the company's operating cycle are reported as:

Accepted Answer

A)  Current assets.
B)  Current liabilities.
C)  Long-term liabilities.
D)  Operating cycle liabilities.
E)  Bills.F) C) and D)
G) All of the above

Question 15

Match between columns
                        Premises: A record for a pay period that shows the pay period dates, regular and overtime hours worked, gross pay, net pay and deductions.
Liabilities due within one year or the company's operating cycle, whichever is longer.
A calculation of a company's ability to pay interest when due.
A special bank account used solely for paying employees; each pay period an amount equal to the total employees' net pay is deposited and the employees' payroll checks are drawn on that account.
A bank authorized to accept deposits of amounts payable to the federal government, including payroll taxes.
Employee withholdings and equal employer taxes, paid to cover medical benefits.
Compensation provided to employees beyond salaries and wages, such as premiums for medical insurance and contributions to pension plans.
Total compensation earned by an employee.
A seller's obligation to replace or fix a product or service that fails to perform as expected within a specified period.
A written promise to pay a specified amount on a stated future date within one year or the company's operating cycle, whichever is longer.

Accepted Answer

The Answer of Federal depository bank and Payroll register and is...

Question 16

The chief executive officer earns $10,000 per month.As of May 31,her gross pay was $50,000.The tax rate for Social Security is 6.2% of the first $128,400 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 5.4%.Both unemployment taxes are applied to the first $7,000 of an employee's pay.What is the amount of FICA-Social Security withheld from this employee for the month of June?

Accepted Answer

A)  $7,347
B)  $620
C)  $1,240
D)  $268
E)  $290F) A) and E)
G) B) and C)

Question 17

On December 1,Williams Company borrowed $45,000 cash from Second National Bank by signing a 90-day,9% note payable.
a.Prepare Williams' journal entry to record the issuance of the note payable.
b.Prepare Williams' journal entry to record the accrued interest due at December 31.
c.Prepare Williams' journal entry to record the payment of the note on March 1 of the next year.

Accepted Answer

The answer of On December 1,Williams Company borrowed $45,000 cash...

Question 18

Debt guarantees are:

Accepted Answer

A)  Never disclosed in the financial statements.
B)  Considered to be contingent liabilities.
C)  A bad business practice.
D)  Recorded as liabilities even though it is highly unlikely that the original debtor will default.
E)  Considered to be an unearned revenue.F) C) and D)
G) A) and D)

Question 19

Recording employee payroll deductions may involve:

Accepted Answer

A)  Liabilities to the employer.
B)  Liabilities to federal and state governments.
C)  Expenses for state unemployment.
D)  Expenses for the gross wages and salaries.
E)  Expenses for the employer portion of any medical insurance.F) B) and E)
G) B) and D)

Question 20

Contingent liabilities that are reasonably possible are disclosed in the notes.

Accepted Answer

A) True 
 B)False

Exam 9: Accounting for Current Liabilities

In order to be reported,liabilities must:

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

Correct Answer
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Correct Answer
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The deferred income tax liability:

Correct Answer
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Uncertainties such as natural disasters are:

Correct Answer
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________ are probable future payments of assets or services that a company is presently obligated to make as a result of past transactions or events.

Correct Answer
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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 on the note? (Use 360 days a year.)

Correct Answer
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Correct Answer
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Describe employer responsibilities for reporting payroll taxes.(To the extent possible,reference the form to be filed for each tax.)

Correct Answer
verified
Employers are required to report FICA ta...
View Answer

Contingent liabilities that are reasonably possible are disclosed in the notes.

Correct Answer
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Correct Answer
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Correct Answer
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Debt guarantees are:

Correct Answer
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Match each of the appropriate definitions with correct term.

Recording employee payroll deductions may involve:

Correct Answer
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Obligations to be paid within one year or the company's operating cycle,whichever is longer,are:

Correct Answer
verified

The amount of FICA tax that employers must pay is exactly twice the amount of the FICA taxes withheld from their employees.

Correct Answer
verified

Obligations not expected to be paid within the longer of one year or the company's operating cycle are reported as:

Correct Answer
verified

Employee vacation benefits:

Correct Answer
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Exam 9: Accounting for Current Liabilities

In order to be reported,liabilities must:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The deferred income tax liability:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Uncertainties such as natural disasters are:

Correct AnswerverifiedShow Answer

________ are probable future payments of assets or services that a company is presently obligated to make as a result of past transactions or events.

Correct AnswerverifiedShow Answer

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 on the note? (Use 360 days a year.)

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Describe employer responsibilities for reporting payroll taxes.(To the extent possible,reference the form to be filed for each tax.)

Correct AnswerverifiedEmployers are required to report FICA ta...View AnswerShow Answer

Contingent liabilities that are reasonably possible are disclosed in the notes.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Debt guarantees are:

Correct AnswerverifiedShow Answer

Match each of the appropriate definitions with correct term.

Recording employee payroll deductions may involve:

Correct AnswerverifiedShow Answer

Obligations to be paid within one year or the company's operating cycle,whichever is longer,are:

Correct AnswerverifiedShow Answer

The amount of FICA tax that employers must pay is exactly twice the amount of the FICA taxes withheld from their employees.

Correct AnswerverifiedShow Answer

Obligations not expected to be paid within the longer of one year or the company's operating cycle are reported as:

Correct AnswerverifiedShow Answer

Employee vacation benefits:

Correct AnswerverifiedShow Answer

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Employers are required to report FICA ta...
View Answer

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