Question 1

On May 22,Jarrett Company borrows $7,500 from Fairmont Financing,signing a 90-day,8%,$7,500 note.What is the journal entry needed to record the transaction by Jarrett Company?

Accepted Answer

A)  Debit Cash $7,500;credit Accounts Payable $7,500.
B)  Debit Accounts Payable $7,500;credit Notes Payable $7,500.
C)  Debit Cash $7,650;credit Notes Payable $7,650.
D)  Debit Cash $7,500;credit Notes Payable $7,500.
E)  Debit Notes Receivable $7,500;credit Cash $7,500.F) B) and E)
G) B) and C)

Question 2

An employee earns $5,500 per month working for an employer.The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%.The current FUTA tax rate is 0.6%,and the SUTA tax rate is 4.4%.Both unemployment taxes are applied to the first $7,000 of an employee's pay.The employee has $182 in federal income taxes withheld.The employee has voluntary deductions for health insurance of $150 and contributes $75 to a retirement plan each month.What is the amount of net pay for the employee for the month of January?

Accepted Answer

A)  $4,827.00
B)  $4,672.25
C)  $4,628.25
D)  $4,386.25
E)  $4,430.25F) B) and C)
G) None of the above

Question 3

The employer should record deductions from employee pay as:

Accepted Answer

A)  Employee receivables.
B)  Payroll taxes.
C)  Current liabilities.
D)  Wages payable.
E)  Employee payables.F) None of the above
G) A) and E)

Question 4

On December 1,Victoria Company signed a 90-day,6% note payable,with a face value of $15,000.What amount of interest expense is accrued at December 31 on the note?

Accepted Answer

A)  $0
B)  $75
C)  $900
D)  $225
E)  $300F) B) and C)
G) A) and B)

Question 5

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) D) and E)

Question 6

All of the following statements related to current liabilities for U.S.GAAP and IFRS are true except:

Accepted Answer

A)  The definitions and characteristics of current liabilities are broadly similar for both U.S.GAAP and IFRS.
B)  The term provision is typically used under IRFS to refer to what is titled liability under U.S.GAAP.
C)  Because tax regulatory systems of countries are different,the approach to recording taxes is totally different.
D)  When there is little uncertainty surrounding current liabilities,both require companies to record them in a similar manner.
E)  When there is a known current obligation that involves an uncertain amount,but one that can be reasonable estimated,both require similar treatment.F) A) and D)
G) D) and E)

Question 7

______________________ are amounts received in advance from customers for future products or services.

Accepted Answer

The answer of ______________________ are amounts received in advance from...

Question 8

An estimated liability:

Accepted Answer

A)  Is an unknown liability of a certain amount.
B)  Is a known obligation of an uncertain amount that can be reasonably estimated.
C)  Is a liability that may occur if a future event occurs.
D)  Can be the result of a lawsuit.
E)  Is not recorded until the amount is known for certain.F) B) and D)
G) A) and E)

Question 9

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

Accepted Answer

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

Question 10

Triston Vale is paid on a monthly basis.For the month of January of the current year,he earned a total of $5,210.FICA tax for Social Security is 6.2% and the FICA tax for Medicare is 1.45%.The FUTA tax rate is 0.6%,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 $885.70.What is the amount of the employer's payroll taxes expenses for this employee?

Accepted Answer

A)  $1,284.27
B)  $312.60
C)  $398.57
D)  $711.17
E)  $1,596.87F) B) and C)
G) None of the above

Question 11

Employee vacation benefits:

Accepted Answer

A)  Are estimated liabilities.
B)  Are contingent liabilities.
C)  Are recorded as an expense when the employee takes a vacation.
D)  Are recorded as an expense when the employee retires.
E)  Increase net income.F) A) and D)
G) A) and E)

Question 12

Early 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 $800,000.Prepare the general journal entry to record the estimated employee bonus plan expense.

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> B = 0.02($800,000 -...

Question 13

During June,Vixen Fur Company sells $850,000 in merchandise that has a one year warranty.Experience shows that warranty expenses average about 3% of the selling price.Customers returned $14,000 of merchandise for warranty replacement during the month.The entry to settle the customer warranties is:

Accepted Answer

A)  Debit Warranty Expense $11,500;credit Estimated Warranty Liability $11,500.
B)  Debit Estimated Warranty Liability $25,500;credit Warranty Expense $25,500.
C)  Debit Warranty Expense $14,000;credit Estimated Warranty Liability $14,000.
D)  Debit Estimated Warranty Liability $11,500;credit Merchandise Inventory $11,500.
E)  Debit Estimated Warranty Liability $14,000;credit Merchandise Inventory $14,000.F) A) and D)
G) A) and E)

Question 14

A company's income before interest expense and income taxes is $350,000 and its interest expense is $100,000.Its times interest earned ratio is:

Accepted Answer

A)  0.29
B)  3.50
C)  2.50
D)  1.75
E)  0.50F) B) and C)
G) C) and E)

Question 15

Companies with many employees often use a special ____________________ account to pay employees.

Accepted Answer

The answer of Companies with many employees often use a...

Question 16

An employee earns $5,500 per month working for an employer.The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%.The current FUTA tax rate is 0.6%,and the SUTA tax rate is 4.4%.Both unemployment taxes are applied to the first $7,000 of an employee's pay.The employee has $182 in federal income taxes withheld.The employee has voluntary deductions for health insurance of $150 and contributes $75 to a retirement plan each month.What is the amount the employer should record as payroll taxes expense for the employee for the month of January?

Accepted Answer

A)  $420.75
B)  $464.75
C)  $602.75
D)  $841.50
E)  $695.75F) A) and C)
G) B) and D)

Question 17

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

The answer of On September 15,SkateWorld borrowed $70,000 cash from...

Question 18

______________ are amounts owed to suppliers for products or services purchased on credit.

Accepted Answer

Trade acco...

Question 19

A company's employees had the following earnings records at the close of the current payroll period:  The company's payroll taxes expense on each employee's earnings includes: FICA Social Security taxes of 6.2% on the first $117,000 of earnings plus 1.45% FICA Medicare on all wages;0.6% federal unemployment taxes on the first $7,000;and 2.5% state unemployment taxes on the first $7,000.Compute the employer's total payroll taxes expense for the current pay period.

Accepted Answer

¹Employee pay subject to unemp...

Question 20

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

Exam 11: Current Liabilities and Payroll Accounting

An estimated liability:

Correct Answer
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The employer should record deductions from employee pay as:

Correct Answer
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In the accounting records of a defendant,lawsuits:

Correct Answer
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______________ are amounts owed to suppliers for products or services purchased on credit.

Correct Answer
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Trade acco...
View Answer

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

Correct Answer
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During June,Vixen Fur Company sells $850,000 in merchandise that has a one year warranty.Experience shows that warranty expenses average about 3% of the selling price.Customers returned $14,000 of merchandise for warranty replacement during the month.The entry to settle the customer warranties is:

Correct Answer
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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
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______________________ are amounts received in advance from customers for future products or services.

Correct Answer
verified

On May 22,Jarrett Company borrows $7,500 from Fairmont Financing,signing a 90-day,8%,$7,500 note.What is the journal entry needed to record the transaction by Jarrett Company?

Correct Answer
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Correct Answer
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Correct Answer
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Employee vacation benefits:

Correct Answer
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All of the following statements related to current liabilities for U.S.GAAP and IFRS are true except:

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

Correct Answer
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Companies with many employees often use a special ____________________ account to pay employees.

Correct Answer
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Early 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 $800,000.Prepare the general journal entry to record the estimated employee bonus plan expense.

Correct Answer
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B = 0.02($800,000 -...
View Answer

Correct Answer
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¹Employee pay subject to unemp...
View Answer

On December 1,Victoria Company signed a 90-day,6% note payable,with a face value of $15,000.What amount of interest expense is accrued at December 31 on the note?

Correct Answer
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A company's income before interest expense and income taxes is $350,000 and its interest expense is $100,000.Its times interest earned ratio is:

Correct Answer
verified

Exam 11: Current Liabilities and Payroll Accounting

An estimated liability:

Correct AnswerverifiedShow Answer

The employer should record deductions from employee pay as:

Correct AnswerverifiedShow Answer

In the accounting records of a defendant,lawsuits:

Correct AnswerverifiedShow Answer

______________ are amounts owed to suppliers for products or services purchased on credit.

Correct AnswerverifiedTrade acco...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

During June,Vixen Fur Company sells $850,000 in merchandise that has a one year warranty.Experience shows that warranty expenses average about 3% of the selling price.Customers returned $14,000 of merchandise for warranty replacement during the month.The entry to settle the customer warranties is:

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 AnswerverifiedShow Answer

______________________ are amounts received in advance from customers for future products or services.

Correct AnswerverifiedShow Answer

On May 22,Jarrett Company borrows $7,500 from Fairmont Financing,signing a 90-day,8%,$7,500 note.What is the journal entry needed to record the transaction by Jarrett Company?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Employee vacation benefits:

Correct AnswerverifiedShow Answer

All of the following statements related to current liabilities for U.S.GAAP and IFRS are true except:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Companies with many employees often use a special ____________________ account to pay employees.

Correct AnswerverifiedShow Answer

Early 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 $800,000.Prepare the general journal entry to record the estimated employee bonus plan expense.

Correct Answerverified B = 0.02($800,000 -...View AnswerShow Answer

Correct Answerverified 1Employee pay subject to unemp...View AnswerShow Answer

On December 1,Victoria Company signed a 90-day,6% note payable,with a face value of $15,000.What amount of interest expense is accrued at December 31 on the note?

Correct AnswerverifiedShow Answer

A company's income before interest expense and income taxes is $350,000 and its interest expense is $100,000.Its times interest earned ratio is:

Correct AnswerverifiedShow Answer

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Trade acco...
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B = 0.02($800,000 -...
View Answer

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¹Employee pay subject to unemp...
View Answer

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