FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 11: Current Liabilities and Payroll

Show Answer

Share

---

All types

Filters

Study Flashcards

Question 21

Multiple Choice

Review LaterAdd Note

Review Later

Which of the following statements regarding vacation benefits is correct?

A) No entry is needed until the employee takes a paid vacation.
B) The account,Vacation Expense is debited when the employee takes a paid vacation.
C) Health and pension benefits are recorded in the same manner as vacation benefits.
D) When an employee takes a paid vacation,the account,Vacation Benefits Payable is credited.

Correct Answer

verified

Show Answer

Question 22

Multiple Choice

Review LaterAdd Note

Review Later

Dan Jones and Pat Smith are two employees of Lone Star Company.In January 2019,Dan's gross pay was $11,500,and Pat's gross pay was $15,400.All earnings are subject to FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%.Which of the following would be included in the entry to record the payroll tax expense to be paid out by Lone Star Company for January?

A) a debit to Salaries Payable to employees for $390.05
B) a debit to FICA-OASDI Taxes Payable for $390.05
C) a credit to FICA-Medicare Taxes Payable for $390.05
D) a credit to Salaries Expense for $390.05

Correct Answer

verified

Show Answer

Question 23

Multiple Choice

Review LaterAdd Note

A restaurant is being sued because a customer claims to have found a bug in her chili.The company's lawyers believe there is only a remote possibility that the lawsuit will result in an actual liability.Which of the following actions should be taken by the company's management?

Dallas Company has gross pay for March of $50,000.The journal entry to record salaries expense would include a debit to Salaries and Wages Payable for $50,000.

The matching principle requires businesses to report Warranty Expense ________.

The journal entry for accrued interest on a note payable includes ________.

If a contingency that is probable can be reasonably estimated,a liability is recorded and an expense is accrued.

The matching principle requires businesses to record Warranty Expense when the warranty costs are incurred.

Which of the following is NOT a liability that must be estimated?

The employer is required to directly deposit the employee's take-home pay into the employee's bank account.

The IFRS definitions of current and long-term liabilities are much different than the U.S.GAAP definitions.

Employer FICA tax is paid by the employer and is added to the employee's earnings.

When a business records accrued interest expense on a note payable ________.

Harrison,an employee of Safe Associates,Inc. ,has gross salary for March of $4,000.The entire amount is under the OASDI limit of $118,500 and thus subject to FICA.He is also subject to federal income tax at a rate of 18%.Harrison has a deduction of $320 for health insurance and $80 for United Way.Which of the following is included in the entry to record the disbursement of his net pay?

A journal entry is prepared to reclassify the current portion of a note payable.

A contingency was evaluated at year-end and considered to have a remote possibility of becoming an actual liability.If this is not reported on the balance sheet or in the notes to the financial statements,it could be considered a violation of generally accepted accounting principles.

Mario worked 48 hours during the work week.He earns wages of $18 per hour for straight time (40 hours).The company pays time-and-half for overtime.Mario's gross pay is $864.

Venus Corp.sold goods,with a selling price of $17,221,for cash.The state sales tax rate is 8%.What amount is credited to the Sales Revenue account? (Round calculations to the nearest dollar. )

On October 1,2019,Norway Company borrowed $225,000 by signing a nine-month,8% note payable.Interest was accrued on December 31,2019.Prepare the journal entry on July,1,2020,the date the note was paid.Omit explanation.

On August 31,2018,Allright Services received $3,500 in advance of performing the service.Which journal entry is needed to record the receipt of cash?