Question 1

An employee receives an hourly wage rate of $15,with time-and-a-half for all hours worked in excess of 40 during the week.Payroll data for the current week are as follows: hours worked,48; federal income tax withheld,$120; social security tax rate,6.0%; Medicare tax rate,1.5%; state unemployment compensation tax,3.4% on the first $7,000; and federal unemployment compensation tax,0.8% on the first $7,000.What is the net amount to be paid to the employee?

Accepted Answer

A)  $568.74
B)  $601.50
C)  $660.00
D)  $574.90E) None of the above
F) B) and C)

Question 2

Quick assets include

Accepted Answer

A)  cash, cash equivalents, receivables, prepaid expenses, and inventory
B)  cash, cash equivalents, receivables, and prepaid expenses
C)  cash, cash equivalents, receivables, and inventory
D)  cash, cash equivalents, and receivablesE) B) and C)
F) A) and B)

Question 3

A borrower has two alternatives for a loan: 
(1)issue a $480,000,60-day,8% note or 
(2)issue a $480,000,60-day note that the creditor discounts at 8%.
(Assume a 360-day year is used for interest calculations.)

Accepted Answer

The answer of A borrower has two alternatives for a...

Question 4

Estimating and recording product warranty expense in the period of the sale best follows the

Accepted Answer

A)  cost concept
B)  business entity concept
C)  matching concept
D)  materiality conceptE) B) and D)
F) C) and D)

Question 5

Use this information for Harris Company to answer the following questions.
​
Assuming no employees are subject to ceilings for their earnings, Harris Company has the following information for the pay period of January 15-31.
​
  ​
-Assuming that all wages are subject to federal and state unemployment taxes,the employer's payroll tax expense would be

Accepted Answer

A)  $1,370
B)  $750
C)  $620
D)  $2,870E) None of the above
F) B) and C)

Question 6

Most employers use payroll checks drawn on a special bank account for paying the payroll.

Accepted Answer

A) True 
 B)False

Question 7

The amount borrowed is equal to the face amount of the note on an interest-bearing note payable.

Accepted Answer

A) True 
 B)False

Question 8

Use the following key (a-d)  to identify the proper treatment of each contingent liability.
-Event is reasonably possible and amount is estimable

Accepted Answer

A)  Record only
B)  Record and disclose
C)  Disclose only
D)  Do not record or disclose E) None of the above
F) All of the above

Question 9

Match each of the following items with the term or phrase (a-g)  that best describes it. Terms or phrases may be used more than once.
-Current assets - Current liabilities

Accepted Answer

A)  Current ratio
B)  Working capital
C)  Quick assets
D)  Quick ratio
E)  Record an accrual and disclose in the notes to the financial statementsF) Disclose only in notes to financial statementsG) No disclosure needed in notes to financial statementsH) B) and D)
I) A) and B)

Question 10

The detailed record indicating the data for each employee for each payroll period and the cumulative total earnings for each employee is called the

Accepted Answer

A)  payroll register
B)  payroll check
C)  employee's earnings record
D)  employer's earnings recordE) All of the above
F) A) and B)

Question 11

Chang Co.issued a $50,000,120-day,discounted note to Guarantee Bank.The discount rate is 6%.Assuming a 360-day year,the cash proceeds to Chang Co.are

Accepted Answer

A)  $49,750
B)  $47,000
C)  $49,000
D)  $51,000E) A) and B)
F) A) and C)

Question 12

The journal entry a company uses to record pension rights that have not been funded for its salaried employees at the end of the year is

Accepted Answer

A)  debit Salaries Expense; credit Cash
B)  debit Pension Expense; credit Unfunded Pension Liability
C)  debit Pension Expense; credit Unfunded Pension Liability and Cash
D)  debit Pension Expense; credit CashE) B) and D)
F) C) and D)

Question 13

Form W-4 is a form authorizing employers to withhold a portion of employee earnings for payment of an employee's federal income taxes.

Accepted Answer

A) True 
 B)False

Question 14

Zennia Company provides its employees with varying amounts of vacation per year,depending on their length of employment.The estimated amount of the current year's vacation cost is $135,000.On December 31,the end of the current year,the current month's accrued vacation pay is

Accepted Answer

A)  $135,000
B)  $67,500
C)  $0
D)  $11,250E) B) and C)
F) All of the above

Question 15

Match each payroll item that follows to the one item (a-f)  that best describes its characteristics.
-Federal unemployment compensation tax 
(FUTA)

Accepted Answer

A)  Amount is limited, withheld from employee only
B)  Amount is limited, withheld from employee and matched by employer
C)  Amount is limited, paid by employer only
D)  Amount is not limited, withheld from employee only
E)  Amount is not limited, withheld from employee and matched by employerF) Amount is not limited, paid by employer onlyG) A) and B)
H) D) and F)

Question 16

Match each of the following items with the term or phrase (a-g)  that best describes it. Terms or phrases may be used more than once.
-Cash + Temporary investments + Accounts receivable

Accepted Answer

A)  Current ratio
B)  Working capital
C)  Quick assets
D)  Quick ratio
E)  Record an accrual and disclose in the notes to the financial statementsF) Disclose only in notes to financial statementsG) No disclosure needed in notes to financial statementsH) C) and E)
I) C) and F)

Question 17

Match each payroll item that follows to the one item (a-f)  that best describes its characteristics.
-FICA-Medicare

Accepted Answer

A)  Amount is limited, withheld from employee only
B)  Amount is limited, withheld from employee and matched by employer
C)  Amount is limited, paid by employer only
D)  Amount is not limited, withheld from employee only
E)  Amount is not limited, withheld from employee and matched by employerF) Amount is not limited, paid by employer onlyG) A) and B)
H) B) and E)

Question 18

On June 8,Williams Company issued an $80,000,5%,120-day note payable to Brown Industries.Assuming a 360-day year,what is the maturity value of the note?

Accepted Answer

A)  $82,600
B)  $84,000
C)  $81,333
D)  $88,200E) A) and C)
F) B) and C)

Question 19

The cost of a product warranty should be included as an expense in the

Accepted Answer

A)  period the cash is collected for a product sold on account
B)  future period when the cost of repairing the product is paid
C)  period of the sale of the product
D)  future period when the product is repaired or replacedE) All of the above
F) B) and C)

Question 20

Several months ago,Maximilien Company experienced a spill of radioactive materials into the Missouri River from one of its plants.As a result,the Environmental Protection Agency 
(EPA)fined the company $1,750,000.The company contested the fine.In addition,an employee is seeking $975,000 damages related to the spill.Finally,a homeowner has sued the company for $580,000.Although the homeowner lives 15 miles downstream from the plant,he believes that the spill has reduced his home's resale value by $580,000.Maximilien's legal counsel believes the following will happen in relationship to these incidents:  ​  ​

Accepted Answer

The answer of Several months ago,Maximilien Company experienced a spill...

Exam 11: Current Liabilities and Payroll

A borrower has two alternatives for a loan: (1)issue a $480,000,60-day,8% note or (2)issue a $480,000,60-day note that the creditor discounts at 8%. (Assume a 360-day year is used for interest calculations.)

Correct Answer
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Match each of the following items with the term or phrase (a-g) that best describes it. Terms or phrases may be used more than once. -Current assets - Current liabilities

Correct Answer
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Quick assets include

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On June 8,Williams Company issued an $80,000,5%,120-day note payable to Brown Industries.Assuming a 360-day year,what is the maturity value of the note?

Correct Answer
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Match each payroll item that follows to the one item (a-f) that best describes its characteristics. -Federal unemployment compensation tax (FUTA)

Correct Answer
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Match each of the following items with the term or phrase (a-g) that best describes it. Terms or phrases may be used more than once. -Cash + Temporary investments + Accounts receivable

Correct Answer
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Most employers use payroll checks drawn on a special bank account for paying the payroll.

Correct Answer
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Form W-4 is a form authorizing employers to withhold a portion of employee earnings for payment of an employee's federal income taxes.

Correct Answer
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Correct Answer
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Correct Answer
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Zennia Company provides its employees with varying amounts of vacation per year,depending on their length of employment.The estimated amount of the current year's vacation cost is $135,000.On December 31,the end of the current year,the current month's accrued vacation pay is

Correct Answer
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The journal entry a company uses to record pension rights that have not been funded for its salaried employees at the end of the year is

Correct Answer
verified

The cost of a product warranty should be included as an expense in the

Correct Answer
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The amount borrowed is equal to the face amount of the note on an interest-bearing note payable.

Correct Answer
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The detailed record indicating the data for each employee for each payroll period and the cumulative total earnings for each employee is called the

Correct Answer
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Estimating and recording product warranty expense in the period of the sale best follows the

Correct Answer
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Use the following key (a-d) to identify the proper treatment of each contingent liability. -Event is reasonably possible and amount is estimable

Correct Answer
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Match each payroll item that follows to the one item (a-f) that best describes its characteristics. -FICA-Medicare

Correct Answer
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Chang Co.issued a $50,000,120-day,discounted note to Guarantee Bank.The discount rate is 6%.Assuming a 360-day year,the cash proceeds to Chang Co.are

Correct Answer
verified

Exam 11: Current Liabilities and Payroll

A borrower has two alternatives for a loan: (1)issue a $480,000,60-day,8% note or (2)issue a $480,000,60-day note that the creditor discounts at 8%. (Assume a 360-day year is used for interest calculations.)

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Match each of the following items with the term or phrase (a-g) that best describes it. Terms or phrases may be used more than once. -Current assets - Current liabilities

Correct AnswerverifiedShow Answer

Quick assets include

Correct AnswerverifiedShow Answer

On June 8,Williams Company issued an $80,000,5%,120-day note payable to Brown Industries.Assuming a 360-day year,what is the maturity value of the note?

Correct AnswerverifiedShow Answer

Match each payroll item that follows to the one item (a-f) that best describes its characteristics. -Federal unemployment compensation tax (FUTA)

Correct AnswerverifiedShow Answer

Match each of the following items with the term or phrase (a-g) that best describes it. Terms or phrases may be used more than once. -Cash + Temporary investments + Accounts receivable

Correct AnswerverifiedShow Answer

Most employers use payroll checks drawn on a special bank account for paying the payroll.

Correct AnswerverifiedShow Answer

Form W-4 is a form authorizing employers to withhold a portion of employee earnings for payment of an employee's federal income taxes.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Zennia Company provides its employees with varying amounts of vacation per year,depending on their length of employment.The estimated amount of the current year's vacation cost is $135,000.On December 31,the end of the current year,the current month's accrued vacation pay is

Correct AnswerverifiedShow Answer

The journal entry a company uses to record pension rights that have not been funded for its salaried employees at the end of the year is

Correct AnswerverifiedShow Answer

The cost of a product warranty should be included as an expense in the

Correct AnswerverifiedShow Answer

The amount borrowed is equal to the face amount of the note on an interest-bearing note payable.

Correct AnswerverifiedShow Answer

The detailed record indicating the data for each employee for each payroll period and the cumulative total earnings for each employee is called the

Correct AnswerverifiedShow Answer

Estimating and recording product warranty expense in the period of the sale best follows the

Correct AnswerverifiedShow Answer

Use the following key (a-d) to identify the proper treatment of each contingent liability. -Event is reasonably possible and amount is estimable

Correct AnswerverifiedShow Answer

Match each payroll item that follows to the one item (a-f) that best describes its characteristics. -FICA-Medicare

Correct AnswerverifiedShow Answer

Chang Co.issued a $50,000,120-day,discounted note to Guarantee Bank.The discount rate is 6%.Assuming a 360-day year,the cash proceeds to Chang Co.are

Correct AnswerverifiedShow Answer

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