Question 1

Wolfe Company employer offers a bonus to its employees based on the company's annual pre-bonus net income (to be equally shared by all) .This year's bonuses are estimated at $25,000.How would the company record the year-end adjusting entry to record this benefit?

Accepted Answer

A)  Debit Salaries Expense for $25,000 and credit Employee Bonus Expense for $25,000.
B)  Debit Payroll Tax Expense for $25,000 and credit Payroll Taxes Payable for $25,000.
C)  Debit Income Summary for $25,000 and credit Retained Earnings for $25,000.
D)  Debit Employee Bonus Expense for $25,000 and credit Bonus Payable for $25,000.
E)  Debit Bonus Payable for $25,000 and credit Employee Bonus Expense for $25,000.

Question 2

Sales taxes payable:

Accepted Answer

A)  Is an estimated liability.
B)  Is a contingent liability.
C)  Is a current liability for retailers.
D)  Is a business expense.
E)  Is a long-term liability.

Question 3

A short-term note payable:

Accepted Answer

A)  Is a written promise to pay a specified amount on a definite future date within one year or the company's operating cycle,whichever is longer.
B)  Is a contingent liability.
C)  Is an estimated liability.
D)  Is not a liability until the due date.
E)  Cannot be used to extend the payment period for an account payable.

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)  Form 521B

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

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 7

If a company uses a special payroll bank account:

Accepted Answer

A)  The company does not need to issue paychecks.
B)  The company draws one check for the entire payroll on the regular bank account and deposits it in the payroll bank account.
C)  The company must use a federal depository bank for the payroll.
D)  There is no need for a payroll register.
E)  There is no need to issue W-2's.

Question 8

If a company paid $350,000 in bonuses,and net income prior to the bonus was $4,200,000,what was the bonus percentage offered to the employees?

Accepted Answer

A)  6.2%
B)  5.7%
C)  9.1%
D)  8.3%
E)  6.8%

Question 9

The times interest earned ratio is a measure of:

Accepted Answer

A)  A company's ability to pay its operating expenses on time.
B)  A company's ability to pay interest incurred even if sales decline.
C)  A company's profitability.
D)  The relation between income and debt.
E)  The relation between assets and liabilities.

Question 10

Vacation benefits are a type of _______________ liability.

Accepted Answer

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

Question 11

Payroll taxes are considered to be contingent liabilities.

Accepted Answer

A) True 
 B)False

Question 12

A company's income before interest expense and income taxes was $225,000 in 2013 and $200,000 in 2014.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

2013: $225,000/45,000 = 5 2014: $200,000...

Question 13

The 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) .

Question 14

Amounts received in advance from customers for future products or services:

Accepted Answer

A)  Are revenues.
B)  Increase income.
C)  Are liabilities.
D)  Are not allowed under GAAP.
E)  Require an outlay of cash in the future.

Question 15

FICA taxes include:

Accepted Answer

A)  Social Security taxes
B)  Charitable giving
C)  Employee income taxes
D)  Unemployment taxes
E)  Federal taxes

Question 16

A company has two employees whose January salaries totaled $8,000.The federal income tax rate for both employees is 15%.The FICA Social Security tax is 6.2% and the FICA Medicare tax is 1.45%.Calculate the amount of employee taxes withheld and prepare the company's journal entry to accrue the January salaries expense and withholding of January taxes.

Accepted Answer

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Question 17

Required employee payroll deductions include income taxes,Social Security taxes,pension and health contributions,union dues,and charitable giving.

Accepted Answer

A) True 
 B)False

Question 18

Conner Company borrows $185,600 cash on November 1,2013,by signing a 120-day,8% note.What is the total amount of interest that Conner will recognize for this note?

Accepted Answer

A)  $4,949.
B)  $14,848.
C)  $2,467.
D)  $0,no interest expense is recognized.
E)  $1485.

Question 19

Mission Company has three employees:   
-What is the amount that Mission Company will withhold from Smith's August gross pay?

Accepted Answer

A)  $ 62.00
B)  $138.50
C)  $443.20
D)  $581.70
E)  $76.50

Question 20

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

Exam 9: Reporting and Analyzing Current Liabilities

The times interest earned ratio is a measure of:

Correct Answer
verified

Payroll taxes are considered to be contingent liabilities.

Correct Answer
verified

A short-term note payable:

Correct Answer
verified

Amounts received in advance from customers for future products or services:

Correct Answer
verified

If a company uses a special payroll bank account:

Correct Answer
verified

Wolfe Company employer offers a bonus to its employees based on the company's annual pre-bonus net income (to be equally shared by all) .This year's bonuses are estimated at $25,000.How would the company record the year-end adjusting entry to record this benefit?

Correct Answer
verified

Mission Company has three employees: -What is the amount that Mission Company will withhold from Smith's August gross pay?

Correct Answer
verified

FICA taxes include:

Correct Answer
verified

Required employee payroll deductions include income taxes,Social Security taxes,pension and health contributions,union dues,and charitable giving.

Correct Answer
verified

If a company paid $350,000 in bonuses,and net income prior to the bonus was $4,200,000,what was the bonus percentage offered to the employees?

Correct Answer
verified

Sales taxes payable:

Correct Answer
verified

Conner Company borrows $185,600 cash on November 1,2013,by signing a 120-day,8% note.What is the total amount of interest that Conner will recognize for this note?

Correct Answer
verified

Vacation benefits are a type of _______________ liability.

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

The annual federal unemployment tax return is:

Correct Answer
verified

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

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

A company's income before interest expense and income taxes was $225,000 in 2013 and $200,000 in 2014.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
2013: $225,000/45,000 = 5 2014: $200,000...
View Answer

The times interest earned computation is:

Correct Answer
verified

Correct Answer
verified
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View Answer

Exam 9: Reporting and Analyzing Current Liabilities

The times interest earned ratio is a measure of:

Correct AnswerverifiedShow Answer

Payroll taxes are considered to be contingent liabilities.

Correct AnswerverifiedShow Answer

A short-term note payable:

Correct AnswerverifiedShow Answer

Amounts received in advance from customers for future products or services:

Correct AnswerverifiedShow Answer

If a company uses a special payroll bank account:

Correct AnswerverifiedShow Answer

Wolfe Company employer offers a bonus to its employees based on the company's annual pre-bonus net income (to be equally shared by all) .This year's bonuses are estimated at $25,000.How would the company record the year-end adjusting entry to record this benefit?

Correct AnswerverifiedShow Answer

Mission Company has three employees: -What is the amount that Mission Company will withhold from Smith's August gross pay?

Correct AnswerverifiedShow Answer

FICA taxes include:

Correct AnswerverifiedShow Answer

Required employee payroll deductions include income taxes,Social Security taxes,pension and health contributions,union dues,and charitable giving.

Correct AnswerverifiedShow Answer

If a company paid $350,000 in bonuses,and net income prior to the bonus was $4,200,000,what was the bonus percentage offered to the employees?

Correct AnswerverifiedShow Answer

Sales taxes payable:

Correct AnswerverifiedShow Answer

Conner Company borrows $185,600 cash on November 1,2013,by signing a 120-day,8% note.What is the total amount of interest that Conner will recognize for this note?

Correct AnswerverifiedShow Answer

Vacation benefits are a type of _______________ liability.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The annual federal unemployment tax return is:

Correct AnswerverifiedShow Answer

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

A company's income before interest expense and income taxes was $225,000 in 2013 and $200,000 in 2014.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 Answerverified2013: $225,000/45,000 = 5 2014: $200,000...View AnswerShow Answer

The times interest earned computation is:

Correct AnswerverifiedShow Answer

Correct Answerverified_TB6947_00...View AnswerShow Answer

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

Correct Answer
verified
2013: $225,000/45,000 = 5 2014: $200,000...
View Answer

Correct Answer
verified

Correct Answer
verified
_TB6947_00...
View Answer