Question 1

Obligations that may arise from past transactions only if certain events occur in the future are contingent liabilities.

Accepted Answer

A) True 
 B)False

Question 2

Use the following key (a-d)  to identify the proper treatment of each contingent liability.
-Event is probable and amount is estimable

Accepted Answer

A)  Record only
B)  Record and disclose
C)  Disclose only
D)  Do not record or disclose E) B) and C)
F) None of the above

Question 3

Payroll taxes are based on the employee's net pay.

Accepted Answer

A) True 
 B)False

Question 4

Federal unemployment compensation tax becomes an employer's liability at the time the employee is paid.

Accepted Answer

A) True 
 B)False

Question 5

On June 1,Davis Inc.issued an $84,000,5%,120-day note payable to Garcia Company.Assume that the fiscal year of Garcia ends June 30.Using the 360-day year,what is the amount of interest revenue (rounded) recognized by Garcia in the following year?

Accepted Answer

A)  $700
B)  $1,600
C)  $1,062
D)  $4,200E) All of the above
F) B) and C)

Question 6

When a borrower receives the face amount of a discounted note less the discount,the amount is known as the

Accepted Answer

A)  note proceeds
B)  note discount
C)  note deferred interest
D)  note principalE) A) and C)
F) B) and D)

Question 7

On October 1,Ramos Co.signed a $90,000,60-day discounted note at the bank.The discount rate was 6%,and the note was paid on November 30.
(Assume a 360-day year is used for interest calculations.)

Accepted Answer

The answer of On October 1,Ramos Co.signed a $90,000,60-day discounted...

Question 8

The accounting for defined benefit plans is usually very easy and straightforward.

Accepted Answer

A) True 
 B)False

Question 9

Use this information for Magnum Company to answer the following questions.
​
The following totals for the month of April were taken from the payroll register of Magnum Company:
​
​
  ​
-The journal entry to record the monthly payroll on April 30 would include a

Accepted Answer

A)  credit to Salaries Payable for $8,150
B)  debit to Salaries Expense for $7,902
C)  debit to Salaries Payable for $8,150
D)  debit to Salaries Payable for $7,902E) A) and D)
F) A) and B)

Question 10

The following totals for the month of June were taken from the payroll register of Young Company:​​  The entry to record the accrual of the employer's payroll taxes would include a debit to

Accepted Answer

A)  Payroll Tax Expense for $2,498
B)  Social Security and Medicare Tax Payable for $2,250
C)  Payroll Tax Expense for $1,373
D)  Payroll Tax Expense for $3,000E) A) and D)
F) B) and D)

Question 11

The total earnings of an employee for a payroll period is referred to as

Accepted Answer

A)  take-home pay
B)  pay net of taxes
C)  net pay
D)  gross payE) C) and D)
F) A) and D)

Question 12

Use the following key (a-d)  to identify the proper treatment of each contingent liability.
-Event is remote and amount is estimable

Accepted Answer

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

Question 13

Match each payroll item that follows to the one item (a-f)  that best describes its characteristics.
-FICA-Social security

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) C) and E)
H) B) and F)

Question 14

Current liabilities are due

Accepted Answer

A)  but not receivable for more than one year
B)  but not payable for more than one year
C)  and receivable within one year
D)  and payable within one yearE) B) and C)
F) All of the above

Question 15

During the first year of operations,a company granted warranties on its products at an estimated cost of $8,500.The product warranty expense should be recorded in the years of the expenditures to repair the products covered by the warranty payments.

Accepted Answer

A) True 
 B)False

Question 16

For a current liability to exist,the liability must be due usually within a year and must be paid out of current assets.

Accepted Answer

A) True 
 B)False

Question 17

The journal entry a company uses to record partially funded pension rights for its salaried employees at the end of the year is

Accepted Answer

A)  debit Salaries Expense; credit Cash
B)  debit Pension Expense; credit Unfunded Pension Liability
C)  debit Pension Expense; credit Unfunded Pension Liability and Cash
D)  debit Pension Expense; credit CashE) A) and C)
F) A) and B)

Question 18

The journal entry to record the issuance of a note for the purpose of converting an existing account payable would be

Accepted Answer

A)  debit Cash; credit Accounts Payable
B)  debit Accounts Payable; credit Cash
C)  debit Cash; credit Notes Payable
D)  debit Accounts Payable; credit Notes PayableE) C) and D)
F) B) and D)

Question 19

Martinez Co.borrowed $50,000 on March 1 of the current year by signing a 60-day,9%,interest-bearing note.Assuming a 360-day year,when the note is paid on April 30,the entry to record the payment should include a

Accepted Answer

A)  debit to Interest Payable for $750
B)  debit to Interest Expense for $750
C)  credit to Cash for $50,000
D)  credit to Cash for $54,500E) A) and C)
F) All of the above

Question 20

Which of the following taxes are employers required to withhold from employees?

Accepted Answer

A)  FICA tax
B)  FICA tax and state and federal unemployment tax
C)  state unemployment tax
D)  federal unemployment taxE) A) and B)
F) A) and C)

Exam 11: Current Liabilities and Payroll

The journal entry a company uses to record partially funded pension rights for its salaried employees at the end of the year is

Correct AnswerverifiedShow Answer

For a current liability to exist,the liability must be due usually within a year and must be paid out of current assets.

Correct AnswerverifiedShow Answer

The following totals for the month of June were taken from the payroll register of Young Company:​​ The entry to record the accrual of the employer's payroll taxes would include a debit to

Correct AnswerverifiedShow Answer

Which of the following taxes are employers required to withhold from employees?

Correct AnswerverifiedShow Answer

Use the following key (a-d) to identify the proper treatment of each contingent liability. -Event is probable and amount is estimable

Correct AnswerverifiedShow Answer

The total earnings of an employee for a payroll period is referred to as

Correct AnswerverifiedShow Answer

During the first year of operations,a company granted warranties on its products at an estimated cost of $8,500.The product warranty expense should be recorded in the years of the expenditures to repair the products covered by the warranty payments.

Correct AnswerverifiedShow Answer

Current liabilities are due

Correct AnswerverifiedShow Answer

On October 1,Ramos Co.signed a $90,000,60-day discounted note at the bank.The discount rate was 6%,and the note was paid on November 30. (Assume a 360-day year is used for interest calculations.)

Correct AnswerverifiedShow Answer

On June 1,Davis Inc.issued an $84,000,5%,120-day note payable to Garcia Company.Assume that the fiscal year of Garcia ends June 30.Using the 360-day year,what is the amount of interest revenue (rounded) recognized by Garcia in the following year?

Correct AnswerverifiedShow Answer

Federal unemployment compensation tax becomes an employer's liability at the time the employee is paid.

Correct AnswerverifiedShow Answer

Use this information for Magnum Company to answer the following questions. ​ The following totals for the month of April were taken from the payroll register of Magnum Company: ​ ​ ​ -The journal entry to record the monthly payroll on April 30 would include a

Correct AnswerverifiedShow Answer

Martinez Co.borrowed $50,000 on March 1 of the current year by signing a 60-day,9%,interest-bearing note.Assuming a 360-day year,when the note is paid on April 30,the entry to record the payment should include a

Correct AnswerverifiedShow Answer

Match each payroll item that follows to the one item (a-f) that best describes its characteristics. -FICA-Social security

Correct AnswerverifiedShow Answer

Obligations that may arise from past transactions only if certain events occur in the future are contingent liabilities.

Correct AnswerverifiedShow Answer

The accounting for defined benefit plans is usually very easy and straightforward.

Correct AnswerverifiedShow Answer

Payroll taxes are based on the employee's net pay.

Correct AnswerverifiedShow Answer

Use the following key (a-d) to identify the proper treatment of each contingent liability. -Event is remote and amount is estimable

Correct AnswerverifiedShow Answer

When a borrower receives the face amount of a discounted note less the discount,the amount is known as the

Correct AnswerverifiedShow Answer

The journal entry to record the issuance of a note for the purpose of converting an existing account payable would be

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

The following totals for the month of June were taken from the payroll register of Young Company: The entry to record the accrual of the employer's payroll taxes would include a debit to

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Use this information for Magnum Company to answer the following questions. The following totals for the month of April were taken from the payroll register of Magnum Company: -The journal entry to record the monthly payroll on April 30 would include a

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified