Question 1

All of the following statements related to recording warranty expense are true except:

Accepted Answer

A)  Recording estimated warranty expense requires a debit to Warranty Expense.
B)  Warranty expense should be recorded in the period when the warranty service is performed.
C)  Estimated warranty expense is recorded when revenue from the sale of the product or service is reported.
D)  The seller reports a warranty obligation as a liability.
E)  Warranty costs are probable and the amount can be estimated.F) C) and D)
G) None of the above

Question 2

An employee earned $4,600 in February working for an employer.The FICA tax rate for Social Security is 6.2% of the first $128,400 earned during each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings.The employee has $644 in federal income taxes withheld and has voluntary deductions for health insurance of $50 and contributes 10% of gross pay to a retirement plan each month.The employer pays the $200 remainder of the health insurance premium and an equal amount of contribution to the retirement fund.What is the amount of net pay for the employee for the month of February?

Accepted Answer

A)  $3,094.10
B)  $3,496.00
C)  $3,604.10
D)  $3,446.00
E)  $2,634.10F) B) and E)
G) A) and C)

Question 3

The wage bracket withholding table is used to:

Accepted Answer

A)  Compute social security withholding.
B)  Compute Medicare withholding.
C)  Compute federal income tax withholding.
D)  Prepare the W-4.
E)  Compute unemployment taxes.F) C) and D)
G) A) and D)

Question 4

The correct times interest earned computation is:

Accepted Answer

A)  (Net income + Interest expense + Income taxes) /Interest expense.
B)  (Net income + Interest expense − Income taxes) /Interest expense.
C)  (Net income − Interest expense − Income taxes) /Interest expense.
D)  (Net income − Interest expense + Income taxes) /Interest expense.
E)  Interest expense/(Net income + Interest expense − Income taxes expense) .F) A) and E)
G) A) and B)

Question 5

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 payment of the note by Jarrett Company on the maturity date?

Accepted Answer

A)  Debit Notes Payable $7,500; credit Interest Expense $150; credit Cash $7,350.
B)  Debit Notes Payable $7,500; credit Cash $7,500.
C)  Debit Notes Payable $7,650; credit Cash $7,650.
D)  Debit Notes Payable $7,500; debit Interest Expense $150; credit Cash $7,650.
E)  Debit Cash $7,650; credit Interest Revenue $150; credit Notes Receivable $7,500.F) All of the above
G) None of the above

Question 6

The current FUTA tax rate is 0.6%,and the SUTA tax rate is 5.4%.Both taxes are applied to the first $7,000 of an employee's pay.Assume that an employee earned total wages of $2,900 in the current period and had cumulative pay for prior periods of $5,800.What is the amount of unemployment taxes the employer must pay on this employee's wages for the current period?

Accepted Answer

A)  $420.00.
B)  $348.00.
C)  $72.00.
D)  $174.00.
E)  $0.00.F) A) and E)
G) C) and E)

Question 7

A bank that is authorized to accept deposits of amounts payable to the federal government is a:

Accepted Answer

A)  Credit union.
B)  FDIC insured bank.
C)  Federal depository bank.
D)  National bank.
E)  Federal Reserve Bank.F) A) and B)
G) C) and E)

Question 8

Early Co.offers its employees a bonus equal to 2% of the company's net income.The estimated bonus for the year is $15,686.Prepare the general journal entry to record the estimated employee bonus plan expense.

Accepted Answer

The answer of Early Co.offers its employees a bonus equal...

Question 9

All of the following statements regarding FICA taxes are true except:

Accepted Answer

A)  FICA taxes are deducted from the employee.
B)  Employers must pay withheld FICA taxes to the IRS.
C)  The amount of FICA deducted from the employee is credited to a liability account.
D)  FICA taxes include Medicare taxes and state income taxes.
E)  An employer must pay FICA taxes equal to the amount withheld from the employee.F) A) and B)
G) B) and C)

Question 10

Interest expense is not:

Accepted Answer

A)  Incurred on current liabilities.
B)  Reported on the income statement.
C)  A fixed expense.
D)  Likely to fluctuate when sales change.
E)  A factor in determining a company's borrowing risk.F) B) and C)
G) D) and E)

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

A ________ shows the pay period dates,hours worked,gross pay,deductions,and net pay of each employee for every pay period.

Accepted Answer

The answer of A ________ shows the pay period dates,hours...

Question 13

All of the following are true of known liabilities except:

Accepted Answer

A)  Include accounts payable,notes payable,and payroll.
B)  Can arise from agreements or contracts.
C)  Are measurable.
D)  Can arise form laws.
E)  May depend on some future event occurring.F) A) and B)
G) B) and D)

Question 14

A company sells tablet computers for $1,300 each.The price includes a two-year warranty.During the current year,the company sells 400 tablets.On the basis of past experience,the warranty costs are estimated to be $280 per tablet.The actual warranty costs (paid in cash)by the company during the current year were $65,000.Prepare general journal entries to record the (a)estimated warranty expense and (b)warranty repair costs during current year.

Accepted Answer

The answer of A company sells tablet computers for $1,300...

Question 15

A company sold $12,000 worth of bicycles with an extended warranty.The company's experience is that warranty expense averages 2% of sales.The current period's entry to record the warranty expense is:

Accepted Answer

A)  Debit Warranty Expense $240; credit Cash $240.
B)  Debit Prepaid Warranties $240; credit Warranty Expense $240.
C)  Debit Estimated Warranty Liability $240; credit Cash $240.
D)  Debit Sales Allowances $240; credit Estimated Warranty Liability $240.
E)  Debit Warranty Expense $240; credit Estimated Warranty Liability $240.F) D) and E)
G) C) and D)

Question 16

A company can replace an overdue account payable with a note payable.

Accepted Answer

A) True 
 B)False

Question 17

Short-term notes payable:

Accepted Answer

A)  Cannot replace an account payable.
B)  Can be issued in return for money borrowed from a bank.
C)  Are not negotiable.
D)  Are a conditional promise to pay.
E)  Rarely involve interest charges.F) C) and E)
G) All of the above

Question 18

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

Accepted Answer

Employers are responsible for collecting...

Question 19

The state unemployment tax rates applied to an employer are adjusted according to an employer's merit rating.

Accepted Answer

A) True 
 B)False

Question 20

Deposits of amounts payable to the federal government may be paid through federal depository banks.

Accepted Answer

A) True 
 B)False

Exam 9: Accounting for Current Liabilities

All of the following statements regarding FICA taxes are true except:

Correct Answer
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A company sold $12,000 worth of bicycles with an extended warranty.The company's experience is that warranty expense averages 2% of sales.The current period's entry to record the warranty expense is:

Correct Answer
verified

The correct times interest earned computation is:

Correct Answer
verified

All of the following are true of known liabilities except:

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

Correct Answer
verified
Employers are responsible for collecting...
View 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 payment of the note by Jarrett Company on the maturity date?

Correct Answer
verified

Correct Answer
verified

Early Co.offers its employees a bonus equal to 2% of the company's net income.The estimated bonus for the year is $15,686.Prepare the general journal entry to record the estimated employee bonus plan expense.

Correct Answer
verified

A ________ shows the pay period dates,hours worked,gross pay,deductions,and net pay of each employee for every pay period.

Correct Answer
verified

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

Correct Answer
verified

All of the following statements related to recording warranty expense are true except:

Correct Answer
verified

Interest expense is not:

Correct Answer
verified

A company can replace an overdue account payable with a note payable.

Correct Answer
verified

Deposits of amounts payable to the federal government may be paid through federal depository banks.

Correct Answer
verified

The state unemployment tax rates applied to an employer are adjusted according to an employer's merit rating.

Correct Answer
verified

Correct Answer
verified

A bank that is authorized to accept deposits of amounts payable to the federal government is a:

Correct Answer
verified

The wage bracket withholding table is used to:

Correct Answer
verified

Short-term notes payable:

Correct Answer
verified

Exam 9: Accounting for Current Liabilities

All of the following statements regarding FICA taxes are true except:

Correct AnswerverifiedShow Answer

A company sold $12,000 worth of bicycles with an extended warranty.The company's experience is that warranty expense averages 2% of sales.The current period's entry to record the warranty expense is:

Correct AnswerverifiedShow Answer

The correct times interest earned computation is:

Correct AnswerverifiedShow Answer

All of the following are true of known liabilities except:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedEmployers are responsible for collecting...View AnswerShow 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 payment of the note by Jarrett Company on the maturity date?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Early Co.offers its employees a bonus equal to 2% of the company's net income.The estimated bonus for the year is $15,686.Prepare the general journal entry to record the estimated employee bonus plan expense.

Correct AnswerverifiedShow Answer

A ________ shows the pay period dates,hours worked,gross pay,deductions,and net pay of each employee for every pay period.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

All of the following statements related to recording warranty expense are true except:

Correct AnswerverifiedShow Answer

Interest expense is not:

Correct AnswerverifiedShow Answer

A company can replace an overdue account payable with a note payable.

Correct AnswerverifiedShow Answer

Deposits of amounts payable to the federal government may be paid through federal depository banks.

Correct AnswerverifiedShow Answer

The state unemployment tax rates applied to an employer are adjusted according to an employer's merit rating.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A bank that is authorized to accept deposits of amounts payable to the federal government is a:

Correct AnswerverifiedShow Answer

The wage bracket withholding table is used to:

Correct AnswerverifiedShow Answer

Short-term notes payable:

Correct AnswerverifiedShow Answer

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

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Correct Answer
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Correct Answer
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Correct Answer
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