Question 1

All of the following are true of known liabilities except:

Accepted Answer

A)   Include accounts payable, notes payable, and payroll.
B)   Are obligations set by agreements, contracts, or laws.
C)   May depend on some future event occurring.
D)   Are definitely determinable.
E)   Are measurable.F) A) and B)
G) C) and D)

Question 2

Portia Grant is an employee who is paid monthly. For the month of January of the current year, she earned a total of $8,260. The FICA tax for social security is 6.2% of the first $118,500 earned each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The FUTA tax rate of 0.6% and the SUTA tax rate of 5.4% are applied to the first $7,000 of an employee's pay. The amount of federal income tax withheld from her earnings was $1,325.17. What is the total amount of taxes withheld from the Portia's earnings? (Round your intermediate calculations to two decimal places.)

Accepted Answer

A)   $1,957.06
B)   $1,722.00
C)   $3,097.17
D)   $2,443.21
E)   $1,495.36F) B) and C)
G) A) and C)

Question 3

Employer payroll taxes are an added employee ________ beyond the wages and salaries earned by the employees.

Accepted Answer

The answer of Employer payroll taxes are an added employee...

Question 4

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.
 Obligations due within one year or the company's operating cycle, whichever is longer.
 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 seller's obligation to replace or correct a product or service that fails to perform as expected within a specified period.
 Total compensation earned by an employee.
 Compensation provided to employees beyond salaries and wages, such as premiums for medical insurance and contributions to pension plans.
 Payments of income taxes that are deferred until future years because of temporary differences between GAAP and tax accounting rules.
 A bank authorized to accept deposits of amounts payable to the federal government, including payroll taxes.
 A calculation of a company's risk of its ability to pay interest when due.
 A written promise to pay a specified amount on a definite future date within one year or the company's operating cycle, whichever is longer.

Accepted Answer

The Answer of Employee benefits and Short-term note payable and is...

Question 5

The rate that a state assigns reflecting a company's stability or instability in employing workers is the:

Accepted Answer

A)   Pay rate.
B)   Tax withholding rate.
C)   FICA rate.
D)   Credit rating.
E)   Merit rating.F) B) and C)
G) A) and E)

Question 6

On November 1, Alan Company signed a 120-day, 8% note payable, with a face value of $9,000. 
-What is the maturity value of the note on March 1? (Use 360 days a year.)

Accepted Answer

A)   $9,120
B)   $9,240
C)   $9,000
D)   $720
E)   $9,720F) A) and E)
G) B) and E)

Question 7

Richardson Fields receives $31,680 cash in advance ticket sales for 11 home soccer games. Record the advance ticket sales on March 31. Record the revenue earned for the first game played on August 17.

Accepted Answer

None...

Question 8

Banks authorized to accept deposits of amounts payable to the federal government, including amounts due for payroll taxes are ________.

Accepted Answer

federal de...

Question 9

Employers' responsibilities for payroll do not include:

Accepted Answer

A)   Recording an expense for the employee Federal Income Tax withholding.
B)   Filing Form 941, the Employer's Quarterly Federal Tax Return.
C)   Providing each employee with an annual report of his or her wages subject to FICA and federal income taxes along with the amount of these taxes withheld.
D)   Maintaining individual earnings records for each employee.
E)   Filing Form 940, the Annual Federal Unemployment Tax Return.F) C) and D)
G) None of the above

Question 10

On September 15, SkateWorld borrowed $70,000 cash from Mutual Bank by signing a 6%, 60-day note payable.
a. Prepare SkateWorld's journal entry to record the issuance of the note payable.
b. Prepare SkaetWorld's journal entry to record the payment of the note at maturity.

Accepted Answer

None...

Question 11

The full disclosure principle requires the reporting of contingent liabilities that are reasonably possible.

Accepted Answer

A) True 
 B)False

Question 12

All of the following statements regarding uncertainty in liabilities are true except:

Accepted Answer

A)   Liabilities can involve uncertainty in whom to pay.
B)   A company can be aware of an obligation but not know how much will be required to settle it.
C)   A company can have an obligation of a known amount to a known creditor but not know when it must be paid.
D)   A company can create a liability with a known amount even when the holder of the note may not be known until the maturity date.
E)   A company only records liabilities when it knows whom to pay, when to pay, and how much to pay.F) C) and D)
G) A) and E)

Question 13

A company estimates that warranty expense will be 4% of sales. The company's sales for the current period are $185,000. The current period's entry to record the warranty expense is:

Accepted Answer

A)   Debit Estimated Warranty Liability $7,400; credit Warranty Expense $7,400
B)   Debit Warranty Expense $7,400; credit Sales $7,400.
C)   Debit Warranty Expense $7,400; credit Estimated Warranty Liability $7,400.
D)   Debit Estimated Warranty Liability $7,400; credit Cash $7,400.
E)   No entry is recorded until the items are returned for warranty repairs.F) A) and E)
G) A) and D)

Question 14

Cantrell Company is required by law to collect and remit sales taxes to the state. If Cantrell has $8,000 of cash sales that are subject to an 8% sales tax, what is the journal entry to record the cash sales?

Accepted Answer

A)   Debit Accounts Receivable $8,640; credit Sales $8,000; credit Sales Taxes Payable $640.
B)   Debit Cash $8,000; credit Sales $7,360; credit Sales Taxes Payable $640.
C)   Debit Sales Taxes Payable $640; debit Cash $7,360; credit Sales $8,000.
D)   Debit Cash $8,000; credit Sales $8,000; and record the taxes when paid.
E)   Debit Cash $8,640; credit Sales $8,000; credit Sales Taxes Payable $640.F) C) and E)
G) A) and E)

Question 15

If a company uses a special payroll bank account:

Accepted Answer

A)   There is no need to issue W-2's.
B)   The company does not need to issue paychecks.
C)   The company draws one check for the entire payroll on the regular bank account and deposits it in the payroll bank account.
D)   The company must use a federal depository bank for the payroll bank account.
E)   There is no need for a payroll register.F) B) and D)
G) B) and C)

Question 16

On November 1, Alan Company signed a 120-day, 8% note payable, with a face value of $9,000. 
-What is the adjusting entry for the accrued interest at December 31 on the note? (Use 360 days a year.)

Accepted Answer

A)   Debit Interest Payable, $240; credit Interest Expense, $240.
B)   Debit Interest Expense, $720; credit Interest Payable, $720.
C)   Debit Interest Expense, $120; credit Interest Payable, $120.
D)   Debit interest payable, $120; credit interest expense, $120.
E)   No adjusting entry is required.F) B) and D)
G) A) and B)

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

The annual Federal Unemployment Tax Return is:

Accepted Answer

A)   Form W-4.
B)   Form W-2.
C)   Form 104.
D)   Form 940.
E)   Form 1099.F) C) and D)
G) None of the above

Question 19

Match between columns
                        Premises:  Lawsuit against the company
 Warranty on products sold this year
 Accounts payable
 Income taxes payable
 Vacation benefits
 Accrued wages payable
 Debt guarantees
 Sales taxes payable
 Payroll taxes payable
 Unearned revenues

Accepted Answer

The Answer of Estimated liability and Contingent liability and Known is...

Question 20

The amount of federal income tax withheld from employee pay depends on the employee's annual earnings rate and the number of withholding allowances claimed by the employee.

Accepted Answer

A) True 
 B)False

Exam 11: Current Liabilities and Payroll Accounting

On November 1, Alan Company signed a 120-day, 8% note payable, with a face value of $9,000. -What is the maturity value of the note on March 1? (Use 360 days a year.)

Correct Answer
verified

All of the following are true of known liabilities except:

Correct Answer
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Match the following definitions with the appropriate term

Correct Answer
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Richardson Fields receives $31,680 cash in advance ticket sales for 11 home soccer games. Record the advance ticket sales on March 31. Record the revenue earned for the first game played on August 17.

Correct Answer
verified
None...
View Answer

All of the following statements regarding uncertainty in liabilities are true except:

Correct Answer
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The rate that a state assigns reflecting a company's stability or instability in employing workers is the:

Correct Answer
verified

If a company uses a special payroll bank account:

Correct Answer
verified

On November 1, Alan Company signed a 120-day, 8% note payable, with a face value of $9,000. -What is the adjusting entry for the accrued interest at December 31 on the note? (Use 360 days a year.)

Correct Answer
verified

Cantrell Company is required by law to collect and remit sales taxes to the state. If Cantrell has $8,000 of cash sales that are subject to an 8% sales tax, what is the journal entry to record the cash sales?

Correct Answer
verified

The full disclosure principle requires the reporting of contingent liabilities that are reasonably possible.

Correct Answer
verified

Banks authorized to accept deposits of amounts payable to the federal government, including amounts due for payroll taxes are ________.

Correct Answer
verified
federal de...
View Answer

The amount of federal income tax withheld from employee pay depends on the employee's annual earnings rate and the number of withholding allowances claimed by the employee.

Correct Answer
verified

Employer payroll taxes are an added employee ________ beyond the wages and salaries earned by the employees.

Correct Answer
verified

Employers' responsibilities for payroll do not include:

Correct Answer
verified

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

Correct Answer
verified

On September 15, SkateWorld borrowed $70,000 cash from Mutual Bank by signing a 6%, 60-day note payable. a. Prepare SkateWorld's journal entry to record the issuance of the note payable. b. Prepare SkaetWorld's journal entry to record the payment of the note at maturity.

Correct Answer
verified
None...
View Answer

The annual Federal Unemployment Tax Return is:

Correct Answer
verified

A company estimates that warranty expense will be 4% of sales. The company's sales for the current period are $185,000. The current period's entry to record the warranty expense is:

Correct Answer
verified

Classify each of the following items as either:

Exam 11: Current Liabilities and Payroll Accounting

On November 1, Alan Company signed a 120-day, 8% note payable, with a face value of $9,000. -What is the maturity value of the note on March 1? (Use 360 days a year.)

Correct AnswerverifiedShow Answer

All of the following are true of known liabilities except:

Correct AnswerverifiedShow Answer

Match the following definitions with the appropriate term

Correct AnswerverifiedShow Answer

Richardson Fields receives $31,680 cash in advance ticket sales for 11 home soccer games. Record the advance ticket sales on March 31. Record the revenue earned for the first game played on August 17.

Correct AnswerverifiedNone...View AnswerShow Answer

All of the following statements regarding uncertainty in liabilities are true except:

Correct AnswerverifiedShow Answer

The rate that a state assigns reflecting a company's stability or instability in employing workers is the:

Correct AnswerverifiedShow Answer

If a company uses a special payroll bank account:

Correct AnswerverifiedShow Answer

On November 1, Alan Company signed a 120-day, 8% note payable, with a face value of $9,000. -What is the adjusting entry for the accrued interest at December 31 on the note? (Use 360 days a year.)

Correct AnswerverifiedShow Answer

Cantrell Company is required by law to collect and remit sales taxes to the state. If Cantrell has $8,000 of cash sales that are subject to an 8% sales tax, what is the journal entry to record the cash sales?

Correct AnswerverifiedShow Answer

The full disclosure principle requires the reporting of contingent liabilities that are reasonably possible.

Correct AnswerverifiedShow Answer

Banks authorized to accept deposits of amounts payable to the federal government, including amounts due for payroll taxes are ________.

Correct Answerverifiedfederal de...View AnswerShow Answer

The amount of federal income tax withheld from employee pay depends on the employee's annual earnings rate and the number of withholding allowances claimed by the employee.

Correct AnswerverifiedShow Answer

Employer payroll taxes are an added employee ________ beyond the wages and salaries earned by the employees.

Correct AnswerverifiedShow Answer

Employers' responsibilities for payroll do not include:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

On September 15, SkateWorld borrowed $70,000 cash from Mutual Bank by signing a 6%, 60-day note payable. a. Prepare SkateWorld's journal entry to record the issuance of the note payable. b. Prepare SkaetWorld's journal entry to record the payment of the note at maturity.

Correct AnswerverifiedNone...View AnswerShow Answer

The annual Federal Unemployment Tax Return is:

Correct AnswerverifiedShow Answer

A company estimates that warranty expense will be 4% of sales. The company's sales for the current period are $185,000. The current period's entry to record the warranty expense is:

Correct AnswerverifiedShow Answer

Classify each of the following items as either:

Correct Answer
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Correct Answer
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Correct Answer
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None...
View Answer

Correct Answer
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Correct Answer
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federal de...
View Answer

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None...
View Answer

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