Question 1

Match each of the following items with the term or phrase (a-g)  that best describes it. Terms or phrases may be used more than once.
-Remote contingent liability

Accepted Answer

A)  Current ratio
B)  Working capital
C)  Quick assets
D)  Quick ratio
E)  Record an accrual and disclose in the notes to the financial statementsF) Disclose only in notes to financial statementsG) No disclosure needed in notes to financial statementsH) F) and G)
I) A) and F)

Question 2

Match each payroll item that follows to the one item (a-f)  that best describes its characteristics.
-State unemployment compensation tax 
(SUTA)

Accepted Answer

A)  Amount is limited, withheld from employee only
B)  Amount is limited, withheld from employee and matched by employer
C)  Amount is limited, paid by employer only
D)  Amount is not limited, withheld from employee only
E)  Amount is not limited, withheld from employee and matched by employerF) Amount is not limited, paid by employer onlyG) B) and D)
H) C) and E)

Question 3

The amount of federal income taxes withheld from an employee's gross pay is recorded as a (n)

Accepted Answer

A)  payroll expense
B)  contra account
C)  asset
D)  liabilityE) A) and B)
F) All of the above

Question 4

Which of the following is the most desirable quick ratio?

Accepted Answer

A)  1.20
B)  1.00
C)  0.95
D)  0.50E) B) and C)
F) A) and D)

Question 5

Dixon Sales has seven sales employees that receive weekly paychecks.Each earns $10.25 per hour and each has worked 40 hours in the pay period.Each employee pays 12% of gross in federal income tax,3% in state income tax,6.0% of gross in social security tax,1.5% of gross in Medicare tax,and 0.5% in state disability insurance.Journalize the recognition of the pay period ending January 19 that will be paid to the employees January 26.

Accepted Answer

The answer of Dixon Sales has seven sales employees that...

Question 6

Match each of the following items with the term or phrase (a-g)  that best describes it. Terms or phrases may be used more than once.
-Probable likelihood of a liability but cannot be estimated

Accepted Answer

A)  Current ratio
B)  Working capital
C)  Quick assets
D)  Quick ratio
E)  Record an accrual and disclose in the notes to the financial statementsF) Disclose only in notes to financial statementsG) No disclosure needed in notes to financial statementsH) E) and G)
I) D) and E)

Question 7

Aqua Construction installs swimming pools.It calculates that warranty obligations are 5% of sales.For the year just ending,Aqua's sales were $1,500,000.Previous quarterly entries debiting Warranty Expense totaled $48,700.Determine the estimated warranty expense for the year and make the journal entry necessary to bring the account to the needed balance.

Accepted Answer

The sales were $1,500,000,thus...

Question 8

Nelson Industries warrants its products for one year.The estimated product warranty is 4.3% of sales.Sales were $475,000 for September.In October,a customer received warranty repairs requiring $215 of parts and $65 of labor.​​​

Accepted Answer

The answer of Nelson Industries warrants its products for one...

Question 9

Use the following key (a-d)  to identify the proper treatment of each contingent liability.
-Event is reasonably possible but amount is not estimable

Accepted Answer

A)  Record only
B)  Record and disclose
C)  Disclose only
D)  Do not record or disclose E) B) and D)
F) A) and D)

Question 10

Mobile Sales has five sales employees that receive weekly paychecks.Each earns $11.50 per hour and each has worked 40 hours in the pay period.Each employee pays 12% of gross in federal income tax,3% in state income tax,6.0% of gross in social security tax,1.5% of gross in Medicare tax,and 0.5% in state disability insurance.Journalize the pay period ending January 19 that will be paid to the employees January 26.

Accepted Answer

The answer of Mobile Sales has five sales employees that...

Question 11

Vacation pay payable is reported on the balance sheet as a (n)

Accepted Answer

A)  current liability or long-term liability, depending on when the vacations will be taken by employees
B)  current liability
C)  expense
D)  long-term liabilityE) A) and B)
F) C) and D)

Question 12

FICA tax is a payroll tax that is paid only by employers.

Accepted Answer

A) True 
 B)False

Question 13

Federal unemployment taxes are paid by the employer and the employee.

Accepted Answer

A) True 
 B)False

Question 14

An interest-beating note is a loan in which the lender deducts interest from the amount loaned before the money is advanced to the borrower.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following will have no effect on an employee's take-home pay?

Accepted Answer

A)  social security tax
B)  unemployment tax
C)  marital status
D)  number of exemptions claimedE) A) and B)
F) C) and D)

Question 16

The use of a separate payroll bank account is not an advantageous control,because it creates more complexity in reconciliation functions for a company and invites theft.

Accepted Answer

A) True 
 B)False

Question 17

Taylor Bank lends Guarantee Company $150,000 on January 1.Guarantee Company signs a $150,000,8%,nine-month note.The entry made by Guarantee Company on January 1 to record the proceeds and issuance of the note is​

Accepted Answer

A)  Interest Expense 12,000Cash 138,000Notes Payable 150,000​
B)  Cash 150,000Notes Payable 150,000​
C)  Cash 162,000Interest Expense 12,000Notes Payable 150,000​
D)  Notes Payable 120,000Interest Payable 7,200Cash 120,000Interest Expense 7,200E) All of the above
F) A) and D)

Question 18

Journalize the following,assuming a 360-day year is used for interest calculations:​

Accepted Answer

The answer of Journalize the following,assuming a 360-day year is...

Question 19

The journal entry used to record the issuance of an interest-bearing note for the purpose of borrowing funds for the business is

Accepted Answer

A)  debit Accounts Payable; credit Notes Payable
B)  debit Cash; credit Notes Payable
C)  debit Notes Payable; credit Cash
D)  debit Cash and Interest Expense; credit Notes PayableE) B) and D)
F) All of the above

Question 20

On January 5,Thomas Company,which follows a calendar year,issued $1,000,000 of notes payable,of which $250,000 is due on January 1 each of the next four years.The proper balance sheet presentation on December 31 is

Accepted Answer

A)  Current liabilities, $1,000,000
B)  Current liabilities, $250,000; Long-term debt, $750,000
C)  Long-term debt, $1,000,000
D)  Current liabilities, $750,000; Long-term debt, $250,000E) A) and B)
F) A) and C)

Exam 11: Current Liabilities and Payroll

Journalize the following,assuming a 360-day year is used for interest calculations:

Correct Answer
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Correct Answer
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Nelson Industries warrants its products for one year.The estimated product warranty is 4.3% of sales.Sales were $475,000 for September.In October,a customer received warranty repairs requiring $215 of parts and $65 of labor.

Correct Answer
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The use of a separate payroll bank account is not an advantageous control,because it creates more complexity in reconciliation functions for a company and invites theft.

Correct Answer
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On January 5,Thomas Company,which follows a calendar year,issued $1,000,000 of notes payable,of which $250,000 is due on January 1 each of the next four years.The proper balance sheet presentation on December 31 is

Correct Answer
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Which of the following will have no effect on an employee's take-home pay?

Correct Answer
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The amount of federal income taxes withheld from an employee's gross pay is recorded as a (n)

Correct Answer
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Correct Answer
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Match each of the following items with the term or phrase (a-g) that best describes it. Terms or phrases may be used more than once. -Probable likelihood of a liability but cannot be estimated

Correct Answer
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Correct Answer
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The sales were $1,500,000,thus...
View Answer

The journal entry used to record the issuance of an interest-bearing note for the purpose of borrowing funds for the business is

Correct Answer
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Taylor Bank lends Guarantee Company $150,000 on January 1.Guarantee Company signs a $150,000,8%,nine-month note.The entry made by Guarantee Company on January 1 to record the proceeds and issuance of the note is

Correct Answer
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An interest-beating note is a loan in which the lender deducts interest from the amount loaned before the money is advanced to the borrower.

Correct Answer
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Federal unemployment taxes are paid by the employer and the employee.

Correct Answer
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Match each payroll item that follows to the one item (a-f) that best describes its characteristics. -State unemployment compensation tax (SUTA)

Correct Answer
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Use the following key (a-d) to identify the proper treatment of each contingent liability. -Event is reasonably possible but amount is not estimable

Correct Answer
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Which of the following is the most desirable quick ratio?

Correct Answer
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Match each of the following items with the term or phrase (a-g) that best describes it. Terms or phrases may be used more than once. -Remote contingent liability

Correct Answer
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FICA tax is a payroll tax that is paid only by employers.

Correct Answer
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Vacation pay payable is reported on the balance sheet as a (n)

Correct Answer
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Exam 11: Current Liabilities and Payroll

Journalize the following,assuming a 360-day year is used for interest calculations:​

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Nelson Industries warrants its products for one year.The estimated product warranty is 4.3% of sales.Sales were $475,000 for September.In October,a customer received warranty repairs requiring $215 of parts and $65 of labor.​​​

Correct AnswerverifiedShow Answer

The use of a separate payroll bank account is not an advantageous control,because it creates more complexity in reconciliation functions for a company and invites theft.

Correct AnswerverifiedShow Answer

On January 5,Thomas Company,which follows a calendar year,issued $1,000,000 of notes payable,of which $250,000 is due on January 1 each of the next four years.The proper balance sheet presentation on December 31 is

Correct AnswerverifiedShow Answer

Which of the following will have no effect on an employee's take-home pay?

Correct AnswerverifiedShow Answer

The amount of federal income taxes withheld from an employee's gross pay is recorded as a (n)

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Match each of the following items with the term or phrase (a-g) that best describes it. Terms or phrases may be used more than once. -Probable likelihood of a liability but cannot be estimated

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe sales were $1,500,000,thus...View AnswerShow Answer

The journal entry used to record the issuance of an interest-bearing note for the purpose of borrowing funds for the business is

Correct AnswerverifiedShow Answer

Taylor Bank lends Guarantee Company $150,000 on January 1.Guarantee Company signs a $150,000,8%,nine-month note.The entry made by Guarantee Company on January 1 to record the proceeds and issuance of the note is​

Correct AnswerverifiedShow Answer

An interest-beating note is a loan in which the lender deducts interest from the amount loaned before the money is advanced to the borrower.

Correct AnswerverifiedShow Answer

Federal unemployment taxes are paid by the employer and the employee.

Correct AnswerverifiedShow Answer

Match each payroll item that follows to the one item (a-f) that best describes its characteristics. -State unemployment compensation tax (SUTA)

Correct AnswerverifiedShow Answer

Use the following key (a-d) to identify the proper treatment of each contingent liability. -Event is reasonably possible but amount is not estimable

Correct AnswerverifiedShow Answer

Which of the following is the most desirable quick ratio?

Correct AnswerverifiedShow Answer

Match each of the following items with the term or phrase (a-g) that best describes it. Terms or phrases may be used more than once. -Remote contingent liability

Correct AnswerverifiedShow Answer

FICA tax is a payroll tax that is paid only by employers.

Correct AnswerverifiedShow Answer

Vacation pay payable is reported on the balance sheet as a (n)

Correct AnswerverifiedShow Answer

Journalize the following,assuming a 360-day year is used for interest calculations:

Correct Answer
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Correct Answer
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Nelson Industries warrants its products for one year.The estimated product warranty is 4.3% of sales.Sales were $475,000 for September.In October,a customer received warranty repairs requiring $215 of parts and $65 of labor.

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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The sales were $1,500,000,thus...
View Answer

Correct Answer
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Taylor Bank lends Guarantee Company $150,000 on January 1.Guarantee Company signs a $150,000,8%,nine-month note.The entry made by Guarantee Company on January 1 to record the proceeds and issuance of the note is

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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