Question 1

Liabilities:

Accepted Answer

A)   Must be certain.
B)   Must sometimes be estimated.
C)   Must be for a specific amount.
D)   Must always have a definite date for payment.
E)   Must involve an outflow of cash.F) A) and B)
G) A) and E)

Question 2

Explain the responsibilities of and the accounting by employers for employee payroll deductions.

Accepted Answer

Employers are responsible for collecting...

Question 3

The annual Federal Unemployment Tax Return is:

Accepted Answer

A)   Form 940.
B)   Form 1099.
C)   Form 104.
D)   Form W-2.
E)   Form W-4.F) B) and C)
G) A) and C)

Question 4

Vacation benefits are a type of _______________ liability.

Accepted Answer

The answer of Vacation benefits are a type of _______________...

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Contingent liabilities can be:

Accepted Answer

A)   Probable.
B)   Remote.
C)   Reasonably possible.
D)   Estimable.
E)   All of these.F) A) and B)
G) A) and E)

Question 7

In the accounting records of a defendant, lawsuits:

Accepted Answer

A)   Are estimated liabilities.
B)   Should always be recorded.
C)   Should always be disclosed.
D)   Should be recorded if payment for damages is probable and the amount can be reasonably estimated.
E)   Should never be recorded.F) A) and E)
G) C) and E)

Question 8

Trade accounts payable are amounts owed to suppliers for products or services purchased on credit.

Accepted Answer

A) True 
 B)False

Question 9

The tax rate for FICA-social security is 6.2% and the tax rate for FICA-Medicare is 1.45%. Calculate the total amount of FICA withholding for an employee whose pay is $2,400 and is entirely subject to these FICA taxes.

Accepted Answer

The answer of The tax rate for FICA-social security is...

Question 10

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

Accepted Answer

A note payable is a written promise to p...

Question 11

Pastimes Co. offers its employees a bonus equal to 2% of the company's net income. The estimated net income for the year is expected to be $850,000. Prepare the general journal entry to record the employee bonus plan expense.

Accepted Answer

The answer of Pastimes Co. offers its employees a bonus...

Question 12

Phil Phoenix is paid on a monthly basis. For the month of January of the current year, he earned a total of $8,288. FICA tax for Social Security is 6.2% and the FICA tax for Medicare is 1.45%. The FUTA tax rate is 0.8%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The amount of Federal Income Tax withheld from his earnings was $1,375.17. What is the amount of the employer's annual payroll taxes expenses for this employee?

Accepted Answer

A)   $56.00
B)   $120.18
C)   $378.00
D)   $513.86
E)   $1,068.04F) B) and D)
G) A) and B)

Question 13

Employers:

Accepted Answer

A)   Pay FICA taxes equal to the amount of FICA taxes withheld from the employees.
B)   Withhold employees' FICA taxes.
C)   Pay unemployment taxes to the federal government.
D)   Pay unemployment taxes to both the state and federal governments.
E)   All of these.F) A) and E)
G) B) and D)

Question 14

Arena Company provides health insurance to its employees that costs $15,000 per month. In addition, the company contributes 5% of the employees' $150,000 gross salary to a retirement program. The entry to record the accrued benefits for the month would include a:

Accepted Answer

A)   Debit to Medical Insurance Payable $15,000.
B)   Debit to Employee Retirement Program Payable $7,500.
C)   Debit to Employee Benefits Expense $22,500.
D)   Credit to Employee Benefits Expense $15,000.
E)   Credit to Employee Benefits Expense $22,500.F) None of the above
G) A) and B)

Question 15

Contingent liabilities are recorded in the accounts if the future event is _______________ and the amount owed can be _____________.

Accepted Answer

Probable; ...

Question 16

Employer payroll taxes:

Accepted Answer

A)   Are an added expense beyond the wages and salaries earned by employees.
B)   Represent the federal taxes withheld from employees.
C)   Represent the social security taxes withheld from employees.
D)   Are paid by the employee.
E)   All of these.F) D) and E)
G) A) and D)

Question 17

Harvel Company is required by law to collect and remit sales taxes to the state. If Havel 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 Cash $8,000; credit Sales $7,360; credit Sales Taxes Payable $640.
B)   Debit Sales Taxes Payable $640; debit Cash $7,360; credit Sales $8,000.
C)   Debit Cash $8,000; credit Sales $8,000; and record the taxes when paid.
D)   Debit Cash $8,640; credit Sales $8,000; credit Sales Taxes Payable $640.
E)   Debit Accounts Receivable $8,640; credit Sales $8,000; credit Sales Taxes Payable $640.F) None of the above
G) C) and D)

Question 18

Debt guarantees:

Accepted Answer

A)   Are never disclosed in the financial statements.
B)   Are considered to be a contingent liability.
C)   Are a bad business practice.
D)   Are recorded as a liability even though it is highly unlikely that the original debtor will default.
E)   All of these.F) B) and C)
G) B) and D)

Question 19

Fixed expenses:

Accepted Answer

A)   Create risk.
B)   Can be an advantage when a company is growing.
C)   Include interest expense.
D)   Do not fluctuate with changes in sales.
E)   All of these.F) B) and C)
G) A) and E)

Question 20

A company's income before interest expense and income taxes in 2010 and 2011 is $225,000 and $200,000, respectively. Its interest expense was $45,000 for both years. Calculate the company's times interest earned ratio, and comment on its level of risk.

Accepted Answer

The answer of A company's income before interest expense and...

Exam 11: Current Liabilities and Payroll Accounting

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

Correct Answer
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A note payable is a written promise to p...
View Answer

In the accounting records of a defendant, lawsuits:

Correct Answer
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Vacation benefits are a type of _______________ liability.

Correct Answer
verified

Employers:

Correct Answer
verified

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

Correct Answer
verified

Debt guarantees:

Correct Answer
verified

Harvel Company is required by law to collect and remit sales taxes to the state. If Havel 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

Liabilities:

Correct Answer
verified

Contingent liabilities are recorded in the accounts if the future event is ___ and the amount owed can be _.

Correct Answer
verified
Probable; ...
View Answer

Arena Company provides health insurance to its employees that costs $15,000 per month. In addition, the company contributes 5% of the employees' $150,000 gross salary to a retirement program. The entry to record the accrued benefits for the month would include a:

Correct Answer
verified

Employer payroll taxes:

Correct Answer
verified

Contingent liabilities can be:

Correct Answer
verified

Explain the responsibilities of and the accounting by employers for employee payroll deductions.

Correct Answer
verified
Employers are responsible for collecting...
View Answer

Fixed expenses:

Correct Answer
verified

Pastimes Co. offers its employees a bonus equal to 2% of the company's net income. The estimated net income for the year is expected to be $850,000. Prepare the general journal entry to record the employee bonus plan expense.

Correct Answer
verified

The annual Federal Unemployment Tax Return is:

Correct Answer
verified

The tax rate for FICA-social security is 6.2% and the tax rate for FICA-Medicare is 1.45%. Calculate the total amount of FICA withholding for an employee whose pay is $2,400 and is entirely subject to these FICA taxes.

Correct Answer
verified

Trade accounts payable are amounts owed to suppliers for products or services purchased on credit.

Correct Answer
verified

Correct Answer
verified

A company's income before interest expense and income taxes in 2010 and 2011 is $225,000 and $200,000, respectively. Its interest expense was $45,000 for both years. Calculate the company's times interest earned ratio, and comment on its level of risk.

Correct Answer
verified

Exam 11: Current Liabilities and Payroll Accounting

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

Correct AnswerverifiedA note payable is a written promise to p...View AnswerShow Answer

In the accounting records of a defendant, lawsuits:

Correct AnswerverifiedShow Answer

Vacation benefits are a type of _______________ liability.

Correct AnswerverifiedShow Answer

Employers:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Debt guarantees:

Correct AnswerverifiedShow Answer

Harvel Company is required by law to collect and remit sales taxes to the state. If Havel 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

Liabilities:

Correct AnswerverifiedShow Answer

Contingent liabilities are recorded in the accounts if the future event is _______________ and the amount owed can be _____________.

Correct AnswerverifiedProbable; ...View AnswerShow Answer

Arena Company provides health insurance to its employees that costs $15,000 per month. In addition, the company contributes 5% of the employees' $150,000 gross salary to a retirement program. The entry to record the accrued benefits for the month would include a:

Correct AnswerverifiedShow Answer

Employer payroll taxes:

Correct AnswerverifiedShow Answer

Contingent liabilities can be:

Correct AnswerverifiedShow Answer

Explain the responsibilities of and the accounting by employers for employee payroll deductions.

Correct AnswerverifiedEmployers are responsible for collecting...View AnswerShow Answer

Fixed expenses:

Correct AnswerverifiedShow Answer

Pastimes Co. offers its employees a bonus equal to 2% of the company's net income. The estimated net income for the year is expected to be $850,000. Prepare the general journal entry to record the employee bonus plan expense.

Correct AnswerverifiedShow Answer

The annual Federal Unemployment Tax Return is:

Correct AnswerverifiedShow Answer

The tax rate for FICA-social security is 6.2% and the tax rate for FICA-Medicare is 1.45%. Calculate the total amount of FICA withholding for an employee whose pay is $2,400 and is entirely subject to these FICA taxes.

Correct AnswerverifiedShow Answer

Trade accounts payable are amounts owed to suppliers for products or services purchased on credit.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A company's income before interest expense and income taxes in 2010 and 2011 is $225,000 and $200,000, respectively. Its interest expense was $45,000 for both years. Calculate the company's times interest earned ratio, and comment on its level of risk.

Correct AnswerverifiedShow Answer

Correct Answer
verified
A note payable is a written promise to p...
View Answer

Correct Answer
verified

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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Contingent liabilities are recorded in the accounts if the future event is ___ and the amount owed can be _.

Correct Answer
verified
Probable; ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Employers are responsible for collecting...
View Answer

Correct Answer
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Correct Answer
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