Question 1

Accounts payable are:

Accepted Answer

A)   Amounts owed to suppliers for products and/or services purchased on credit.
B)   Long-term liabilities.
C)   Estimated liabilities.
D)   Not usually due on specific dates.
E)   Always payable within 30 days.F) C) and D)
G) D) and E)

Question 2

A high merit rating for state unemployment taxes means that an employer has high employee turnover or seasonal hiring.

Accepted Answer

A) True 
 B)False

Question 3

Match the following items with the appropriate designation (Current liability, Long-term liability, or Not a liability) .
-Income taxes payable

Accepted Answer

A)  Long-term liability
B)  Not a liability
C)  Current liabilityD) A) and C)
E) A) and B)

Question 4

The Federal Insurance Contributions Act (FICA) requires that each employer file a:

Accepted Answer

A)   W-4.
B)   Form 941.
C)   Form 1040.
D)   Form 1099.
E)   W-2.F) None of the above
G) A) and E)

Question 5

Define liabilities and explain the difference between current and long-term liabilities.

Accepted Answer

Liabilities are probable future payments...

Question 6

Match each of the following terms with the appropriate definitions.
-A potential obligation that depends on a future event arising from a past transaction.

Accepted Answer

A)  Long-term liability
B)  Warranty
C)  FUTA taxes
D)  FICA taxes
E)  Contingent liabilityF) Net payG) Withholding allowanceH) Estimated liabilityI) Merit ratingJ) Wage bracket withholding tableK) B) and J)
L) A) and F)

Question 7

An employee earned $4,600 in February working for an employer.Cumulative earnings of the previous pay periods are $4,800.The FICA tax rate for Social Security is 6.2% of the first $118,500 of earnings each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings.The current 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.What is the amount the employer should record as payroll taxes expense for the month of February?

Accepted Answer

A)   $581.90
B)   $110.00
C)   $351.90
D)   $483.90
E)   $230.00F) C) and D)
G) All of the above

Question 8

A short-term note payable is a written promise to pay a specified amount on a definite future date within one year or the operating cycle,whichever is shorter.

Accepted Answer

A) True 
 B)False

Question 9

A company's had fixed interest expense of $5,000,its income before interest expense and income taxes is $17,000,and its net income is $9,400.The company's times interest earned ratio equals:

Accepted Answer

A)   0.5.
B)   1.8.
C)   1.9.
D)   3.4.
E)   0.3.F) A) and C)
G) B) and D)

Question 10

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 IFRS 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) All of the above
G) C) and D)

Question 11

Employees earn vacation pay at the rate of one day per month.During the month of July,25 employees qualify for one vacation day each.Their average daily wage is $100 per day.What is the amount of vacation benefit expense to be recorded for the month of July?

Accepted Answer

A)   $25
B)   $100
C)   $250
D)   $2,500
E)   $25,000F) B) and D)
G) A) and D)

Question 12

The deferred income tax liability:

Accepted Answer

A)   Results from the income tax expense reported on the income statement differing from the amount of income taxes payable to the government.
B)   Is a contingent liability.
C)   Can result in a deferred income tax asset.
D)   Is never recorded.
E)   Is recorded whether or not the difference between taxable income and financial accounting income is permanent or temporary.F) B) and D)
G) B) and C)

Question 13

A company's income before interest expense and income taxes is $302,400,and its interest expense is $62,000.Calculate the company's times interest earned ratio.

Accepted Answer

Times Interest Earned Ratio =...

Question 14

Describe contingent liabilities and how to account for and/or report them.

Accepted Answer

Contingent liabilities are uncertain obl...

Question 15

Describe employer responsibilities for reporting payroll taxes.(To the extent possible,reference the form to be filed for each tax.)

Accepted Answer

Employers are required to report FICA ta...

Question 16

Match each of the following terms with the appropriate definitions.
-Payroll taxes on employers assessed by the federal government to support the federal unemployment insurance program.

Accepted Answer

A)  Long-term liability
B)  Warranty
C)  FUTA taxes
D)  FICA taxes
E)  Contingent liabilityF) Net payG) Withholding allowanceH) Estimated liabilityI) Merit ratingJ) Wage bracket withholding tableK) A) and F)
L) A) and E)

Question 17

On April 12,Hong Company agrees to accept a 60-day,10%,$4,500 note from Indigo Company to extend the due date on an overdue account.What is the journal entry needed to record the transaction by Indigo Company?

Accepted Answer

A)   Debit Notes Payable $4,500; credit Accounts Payable $4,500.
B)   Debit Accounts Payable $4,500; credit Notes Payable $4,500.
C)   Debit Accounts Receivable $4,500; credit Notes Payable $4,500.
D)   Debit Cash $4,500; credit Notes Payable $4,500.
E)   Debit Sales $4,500; credit Notes Payable $4,500.F) B) and D)
G) A) and B)

Question 18

Match the following items with the appropriate designation (Current liability, Long-term liability, or Not a liability) .
-60-day promissory note

Accepted Answer

A)  Long-term liability
B)  Not a liability
C)  Current liabilityD) A) and C)
E) All of the above

Question 19

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)   Are measurable.
D)   Are definitely determinable.
E)   May depend on some future event occurring.F) B) and C)
G) D) and E)

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 9: Accounting for Current Liabilities

A high merit rating for state unemployment taxes means that an employer has high employee turnover or seasonal hiring.

Correct Answer
verified

Describe employer responsibilities for reporting payroll taxes.(To the extent possible,reference the form to be filed for each tax.)

Correct Answer
verified
Employers are required to report FICA ta...
View Answer

Define liabilities and explain the difference between current and long-term liabilities.

Correct Answer
verified
Liabilities are probable future payments...
View Answer

The Federal Insurance Contributions Act (FICA) requires that each employer file a:

Correct Answer
verified

A short-term note payable is a written promise to pay a specified amount on a definite future date within one year or the operating cycle,whichever is shorter.

Correct Answer
verified

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

Correct Answer
verified

On April 12,Hong Company agrees to accept a 60-day,10%,$4,500 note from Indigo Company to extend the due date on an overdue account.What is the journal entry needed to record the transaction by Indigo Company?

Correct Answer
verified

Match each of the following terms with the appropriate definitions. -Payroll taxes on employers assessed by the federal government to support the federal unemployment insurance program.

Correct Answer
verified

Describe contingent liabilities and how to account for and/or report them.

Correct Answer
verified
Contingent liabilities are uncertain obl...
View Answer

A company's income before interest expense and income taxes is $302,400,and its interest expense is $62,000.Calculate the company's times interest earned ratio.

Correct Answer
verified
Times Interest Earned Ratio =...
View Answer

The deferred income tax liability:

Correct Answer
verified

Match the following items with the appropriate designation (Current liability, Long-term liability, or Not a liability) . -60-day promissory note

Correct Answer
verified

Match each of the following terms with the appropriate definitions. -A potential obligation that depends on a future event arising from a past transaction.

Correct Answer
verified

Employees earn vacation pay at the rate of one day per month.During the month of July,25 employees qualify for one vacation day each.Their average daily wage is $100 per day.What is the amount of vacation benefit expense to be recorded for the month of July?

Correct Answer
verified

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

Correct Answer
verified

Match the following items with the appropriate designation (Current liability, Long-term liability, or Not a liability) . -Income taxes payable

Correct Answer
verified

All of the following are true of known liabilities except:

Correct Answer
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Accounts payable are:

Correct Answer
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Correct Answer
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A company's had fixed interest expense of $5,000,its income before interest expense and income taxes is $17,000,and its net income is $9,400.The company's times interest earned ratio equals:

Correct Answer
verified

Exam 9: Accounting for Current Liabilities

A high merit rating for state unemployment taxes means that an employer has high employee turnover or seasonal hiring.

Correct AnswerverifiedShow Answer

Describe employer responsibilities for reporting payroll taxes.(To the extent possible,reference the form to be filed for each tax.)

Correct AnswerverifiedEmployers are required to report FICA ta...View AnswerShow Answer

Define liabilities and explain the difference between current and long-term liabilities.

Correct AnswerverifiedLiabilities are probable future payments...View AnswerShow Answer

The Federal Insurance Contributions Act (FICA) requires that each employer file a:

Correct AnswerverifiedShow Answer

A short-term note payable is a written promise to pay a specified amount on a definite future date within one year or the operating cycle,whichever is shorter.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

On April 12,Hong Company agrees to accept a 60-day,10%,$4,500 note from Indigo Company to extend the due date on an overdue account.What is the journal entry needed to record the transaction by Indigo Company?

Correct AnswerverifiedShow Answer

Match each of the following terms with the appropriate definitions. -Payroll taxes on employers assessed by the federal government to support the federal unemployment insurance program.

Correct AnswerverifiedShow Answer

Describe contingent liabilities and how to account for and/or report them.

Correct AnswerverifiedContingent liabilities are uncertain obl...View AnswerShow Answer

A company's income before interest expense and income taxes is $302,400,and its interest expense is $62,000.Calculate the company's times interest earned ratio.

Correct Answerverified Times Interest Earned Ratio =...View AnswerShow Answer

The deferred income tax liability:

Correct AnswerverifiedShow Answer

Match the following items with the appropriate designation (Current liability, Long-term liability, or Not a liability) . -60-day promissory note

Correct AnswerverifiedShow Answer

Match each of the following terms with the appropriate definitions. -A potential obligation that depends on a future event arising from a past transaction.

Correct AnswerverifiedShow Answer

Employees earn vacation pay at the rate of one day per month.During the month of July,25 employees qualify for one vacation day each.Their average daily wage is $100 per day.What is the amount of vacation benefit expense to be recorded for the month of July?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Match the following items with the appropriate designation (Current liability, Long-term liability, or Not a liability) . -Income taxes payable

Correct AnswerverifiedShow Answer

All of the following are true of known liabilities except:

Correct AnswerverifiedShow Answer

Accounts payable are:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A company's had fixed interest expense of $5,000,its income before interest expense and income taxes is $17,000,and its net income is $9,400.The company's times interest earned ratio equals:

Correct AnswerverifiedShow Answer

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Employers are required to report FICA ta...
View Answer

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Liabilities are probable future payments...
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Contingent liabilities are uncertain obl...
View Answer

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Times Interest Earned Ratio =...
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