Question 1

Vacation benefits are a type of  __________ liability.

Accepted Answer

estimated

Question 2

The report that shows the pay period dates, hours worked, gross pay, deductions, and net pay of each employee for every pay period is the payroll register.

Accepted Answer

A) True 
 B)False

Question 3

Uncertainties such as natural disasters are:

Accepted Answer

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

Question 4

Explain how to calculate times interest earned and how it is used to analyze a company's risk.

Accepted Answer

The times interest earned ratio is calcu...

Question 5

Deposits of amounts payable to the federal government may be paid through federal depository banks.

Accepted Answer

A) True 
 B)False  True

Question 6

The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both taxes are applied to the first $7,000 of an employee's pay.
- Assume that an employee earned total wages of $2,900 in the current period and had cumulative pay for prior periods of $5,800. What is the amount of unemployment taxes the employer must pay on this employee's wages for the current period?

Accepted Answer

A)   $174.00.
B)   $0.00.
C)   $348.00.
D)   $420.00.
E)   $72.00.F) C) and E)
G) D) and E)

Question 7

All expected future payments are liabilities.

Accepted Answer

A) True 
 B)False

Question 8

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

None...

Question 9

A potential lawsuit claim is disclosed when the claim can be reasonably estimated and it is reasonably possible.

Accepted Answer

A) True 
 B)False

Question 10

Gross pay less all deductions is called ________.

Accepted Answer

The answer of Gross pay less all deductions is called...

Question 11

Estimated liabilities commonly arise from all of the following except:

Accepted Answer

A)   Vacation benefits.
B)   Warranties.
C)   Income taxes.
D)   Employee benefits.
E)   Unearned revenues.F) None of the above
G) A) and D)

Question 12

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 13

The Wage and Tax Statement given to each employee annually is:

Accepted Answer

A)   Form W-4.
B)   Form 1040.
C)   Form W-2.
D)   Form 941.
E)   Form 940.F) C) and D)
G) A) and C)

Question 14

An employer's federal unemployment taxes (FUTA)  are reported:

Accepted Answer

A)   Semiannually.
B)   Annually.
C)   Monthly.
D)   Weekly.
E)   Quarterly.F) C) and D)
G) A) and B)

Question 15

The times interest earned ratio is calculated by dividing interest expense by income before interest expense and income taxes.

Accepted Answer

A) True 
 B)False

Question 16

A liability is a probable future payment of assets or services that a company is presently obligated to make as a result of past transactions or events.

Accepted Answer

A) True 
 B)False

Question 17

Times interest earned is calculated by:

Accepted Answer

A)   Dividing income before interest expense and income taxes by interest expense.
B)   Dividing interest expense by income before interest expense.
C)   Multiplying interest expense by income.
D)   Dividing income before interest expense by interest expense and income taxes.
E)   Multiplying interest expense by income before interest expense.F) A) and D)
G) A) and C)

Question 18

On September 1, Knack Company signed a $50,000, 90-day, 5% note payable with Central Savings Bank. What is the journal entry that should be recorded by Knack upon maturity of the note? (Use 360 days a year.)

Accepted Answer

A)   Debit Notes Payable $50,625; credit Cash $50,625.
B)   Debit Notes Payable $50,000; debit Interest Expense $625; credit Cash $50,625.
C)   Debit Interest Expense $625; credit Interest Payable $625.
D)   Debit Notes Payable $50,000; credit Interest Revenue $625; credit Cash $49,375.
E)   Debit Cash $50,625; credit Notes Receivable $50,625.F) D) and E)
G) A) and D) B

Question 19

The correct times interest earned computation is:

Accepted Answer

A)   (Net income - Interest expense - Income taxes) /Interest expense.
B)   (Net income + Interest expense - Income taxes) /Interest expense.
C)   Interest expense/(Net income + Interest expense + Income taxes expense) .
D)   (Net income - Interest expense + Income taxes) /Interest expense.
E)   (Net income + Interest expense + Income taxes) /Interest expense.F) A) and C)
G) A) and B)

Question 20

Employer payroll taxes:

Accepted Answer

A)   Are payable for up to a maximum $117,000 of employee earnings.
B)   Are paid by the employee.
C)   Are added expenses beyond that for the wages and salaries earned by employees.
D)   Represent the social security taxes withheld from employees.
E)   Represent the federal taxes withheld from employees.F) B) and D)
G) A) and B)

Exam 11: Current Liabilities and Payroll Accounting

Vacation benefits are a type of __________ liability.

Correct Answer
verified
estimated

The report that shows the pay period dates, hours worked, gross pay, deductions, and net pay of each employee for every pay period is the payroll register.

Correct Answer
verified

Uncertainties such as natural disasters are:

Correct Answer
verified

Explain how to calculate times interest earned and how it is used to analyze a company's risk.

Correct Answer
verified
The times interest earned ratio is calcu...
View Answer

Deposits of amounts payable to the federal government may be paid through federal depository banks.

Correct Answer
verified
True

Correct Answer
verified

All expected future payments are liabilities.

Correct Answer
verified

Correct Answer
verified
None...
View Answer

A potential lawsuit claim is disclosed when the claim can be reasonably estimated and it is reasonably possible.

Correct Answer
verified

Gross pay less all deductions is called ________.

Correct Answer
verified

Estimated liabilities commonly arise from all of the following except:

Correct Answer
verified

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

Correct Answer
verified
A short-term note payable is a written p...
View Answer

The Wage and Tax Statement given to each employee annually is:

Correct Answer
verified

An employer's federal unemployment taxes (FUTA) are reported:

Correct Answer
verified

The times interest earned ratio is calculated by dividing interest expense by income before interest expense and income taxes.

Correct Answer
verified

A liability is a probable future payment of assets or services that a company is presently obligated to make as a result of past transactions or events.

Correct Answer
verified

Times interest earned is calculated by:

Correct Answer
verified

On September 1, Knack Company signed a $50,000, 90-day, 5% note payable with Central Savings Bank. What is the journal entry that should be recorded by Knack upon maturity of the note? (Use 360 days a year.)

Correct Answer
verified
B

The correct times interest earned computation is:

Correct Answer
verified

Employer payroll taxes:

Correct Answer
verified

Exam 11: Current Liabilities and Payroll Accounting

Vacation benefits are a type of __________ liability.

Correct Answerverifiedestimated

The report that shows the pay period dates, hours worked, gross pay, deductions, and net pay of each employee for every pay period is the payroll register.

Correct AnswerverifiedShow Answer

Uncertainties such as natural disasters are:

Correct AnswerverifiedShow Answer

Explain how to calculate times interest earned and how it is used to analyze a company's risk.

Correct AnswerverifiedThe times interest earned ratio is calcu...View AnswerShow Answer

Deposits of amounts payable to the federal government may be paid through federal depository banks.

Correct AnswerverifiedTrue

Correct AnswerverifiedShow Answer

All expected future payments are liabilities.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedNone...View AnswerShow Answer

A potential lawsuit claim is disclosed when the claim can be reasonably estimated and it is reasonably possible.

Correct AnswerverifiedShow Answer

Gross pay less all deductions is called ________.

Correct AnswerverifiedShow Answer

Estimated liabilities commonly arise from all of the following except:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedA short-term note payable is a written p...View AnswerShow Answer

The Wage and Tax Statement given to each employee annually is:

Correct AnswerverifiedShow Answer

An employer's federal unemployment taxes (FUTA) are reported:

Correct AnswerverifiedShow Answer

The times interest earned ratio is calculated by dividing interest expense by income before interest expense and income taxes.

Correct AnswerverifiedShow Answer

A liability is a probable future payment of assets or services that a company is presently obligated to make as a result of past transactions or events.

Correct AnswerverifiedShow Answer

Times interest earned is calculated by:

Correct AnswerverifiedShow Answer

On September 1, Knack Company signed a $50,000, 90-day, 5% note payable with Central Savings Bank. What is the journal entry that should be recorded by Knack upon maturity of the note? (Use 360 days a year.)

Correct AnswerverifiedB

The correct times interest earned computation is:

Correct AnswerverifiedShow Answer

Employer payroll taxes:

Correct AnswerverifiedShow Answer

Correct Answer
verified
estimated

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The times interest earned ratio is calcu...
View Answer

Correct Answer
verified
True

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
None...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A short-term note payable is a written p...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
B

Correct Answer
verified

Correct Answer
verified