Question 1

Explain how to calculate times interest earned and how it is used to analyze a company's risk.

Accepted Answer

The times interest earned ratio is calcu...

Question 2

Gary Marks is paid on a monthly basis.For the month of January of the current year,he earned a total of $8,288.FICA tax for Social Security is 6.2% on the first $118,500 of earnings each calendar year and the FICA tax for Medicare is 1.45% of all earnings.The 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.The amount of Federal Income Tax withheld from his earnings was $1,375.17.What is the amount of the employer's payroll taxes expenses for this employee? (Round your intermediate calculations to two decimal places.)

Accepted Answer

A)   $2,009.21
B)   $1,131.31
C)   $2,506.48
D)   $420.00
E)   $1,054.04F) B) and C)
G) A) and E)

Question 3

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 4

An estimated liability:

Accepted Answer

A)   Is an unknown liability of a certain amount.
B)   Is a known obligation of an uncertain amount that can be reasonably estimated.
C)   Is a liability that may occur if a future event occurs.
D)   Can be the result of a lawsuit.
E)   Is not recorded until the amount is known for certain.F) C) and E)
G) B) and E)

Question 5

If the times interest earned ratio:

Accepted Answer

A)   Increases, then risk increases.
B)   Increases, then risk decreases.
C)   Is greater than 1.5, the company is in default.
D)   Is less than 1.5, the company is carrying too little debt.
E)   Is greater than 3.0, the company is likely carrying too much debt.F) C) and E)
G) A) and B)

Question 6

Match each of the following terms with the appropriate definitions.
-A calculation of a company's risk of its ability to pay interest when due.

Accepted Answer

A)  Short-term note payable
B)  Deferred income tax liability
C)  Current liabilities
D)  Warranty
E)  Employee benefitsF) Federal depository bankG) Payroll registerH) Gross payI) Payroll bank accountJ) Times interest earnedK) A) and H)
L) B) and J)

Question 7

Obligations not due within one year or the company's operating cycle,whichever is longer,are reported as current liabilities.

Accepted Answer

A) True 
 B)False

Question 8

The amount of FICA tax that employers must pay is twice the amount of the FICA taxes withheld from their employees.

Accepted Answer

A) True 
 B)False

Question 9

All of the following statements regarding long-term liabilities are true except?

Accepted Answer

A)   Liabilities not expected to be paid within the longer of one year or the company's operating cycle are reported as long-term liabilities.
B)   Long-term liabilities include long-term notes payable, warranty liabilities, lease liabilities, and bonds payable.
C)   Liabilities that do not have a fixed due date, but are payable on demand, are reported as long-term liabilities.
D)   Long-term liabilities can be reported on the balance sheet in a single total or in multiple categories.
E)   A single long-term liability can be divided between current and noncurrent sections on the balance sheet.F) C) and D)
G) A) and E)

Question 10

When the number of withholding allowances claimed on Form W-4 increases,the amount of income tax withheld decreases.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

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

Question 12

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.F) D) and E)
G) A) and B)

Question 13

A company's income before interest expense and income taxes is $350,000 and its interest expense is $100,000.Its times interest earned ratio is:

Accepted Answer

A)   0.29
B)   3.50
C)   2.50
D)   1.75
E)   0.50F) D) and E)
G) A) and B)

Question 14

Employers must keep individual earnings reports for each employee.

Accepted Answer

A) True 
 B)False

Question 15

Match the following items with the appropriate designation (Current liability, Long-term liability, or Not a liability) .
-Payment of a 30-year term loan due next year.(The company's operating cycle is 2 months.)

Accepted Answer

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

Question 16

All of the following are employer payroll taxes except:

Accepted Answer

A)   Social Security tax equal to that withheld from employees.
B)   Medicare tax equal to that withheld from employees.
C)   State unemployment tax.
D)   Federal unemployment tax.
E)   Federal income tax equal to that withheld from employees.F) A) and E)
G) D) and E)

Question 17

A single liability cannot be divided between current and noncurrent liabilities.

Accepted Answer

A) True 
 B)False

Question 18

Estimated liabilities commonly arise from all of the following except:

Accepted Answer

A)   Warranties.
B)   Vacation benefits.
C)   Income taxes.
D)   Employee benefits.
E)   Unearned revenues.F) None of the above
G) A) and B)

Question 19

The chief executive officer earns $20,000 per month.As of May 31,her gross pay was $100,000.The tax rate for Social Security is 6.2% of the first $118,500 earned 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 of FICA - Medicare withheld from this employee for the month of June?

Accepted Answer

A)   $7,347.00
B)   $1,147.00
C)   $1,240.00
D)   $268.25
E)   $290.00F) B) and E)
G) B) and C)

Question 20

A company has advance subscription sales totaling $45,000 for the upcoming year when four quarterly journals will mailed to customers.When the company mails the first quarterly journal to customers,it should record:

Accepted Answer

A)   Debit Prepaid Subscriptions $33,750; credit Unearned Revenue $33,750.
B)   Debit Unearned Revenue $45,000; credit Cash $45,000.
C)   Debit Cash $11,250, credit Sales $11,250.
D)   Debit Unearned Revenue $11,250, credit Sales $11,250.
E)   Debit Prepaid Subscriptions $11,250, credit Sales $11,250.F) All of the above
G) D) and E)

Exam 9: Accounting for Current Liabilities

Obligations not due within one year or the company's operating cycle,whichever is longer,are reported as current liabilities.

Correct Answer
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Employers must keep individual earnings reports for each employee.

Correct Answer
verified

A single liability cannot be divided between current and noncurrent liabilities.

Correct Answer
verified

The amount of FICA tax that employers must pay is twice the amount of the FICA taxes withheld from their employees.

Correct Answer
verified

Correct Answer
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Match each of the following terms with the appropriate definitions. -A calculation of a company's risk of its ability to pay interest when due.

Correct Answer
verified

A short-term note payable:

Correct Answer
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Estimated liabilities commonly arise from all of the following except:

Correct Answer
verified

A company has advance subscription sales totaling $45,000 for the upcoming year when four quarterly journals will mailed to customers.When the company mails the first quarterly journal to customers,it should record:

Correct Answer
verified

An estimated liability:

Correct Answer
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A company's income before interest expense and income taxes is $350,000 and its interest expense is $100,000.Its times interest earned ratio is:

Correct Answer
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All of the following statements regarding long-term liabilities are true except?

Correct Answer
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Correct Answer
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All of the following are employer payroll taxes except:

Correct Answer
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If the times interest earned ratio:

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

Correct Answer
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When the number of withholding allowances claimed on Form W-4 increases,the amount of income tax withheld decreases.

Correct Answer
verified

Explain how to calculate times interest earned and how it is used to analyze a company's risk.

Correct Answer
verified
The times interest earned ratio is calcu...
View Answer

Match the following items with the appropriate designation (Current liability, Long-term liability, or Not a liability) . -Payment of a 30-year term loan due next year.(The company's operating cycle is 2 months.)

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

Exam 9: Accounting for Current Liabilities

Obligations not due within one year or the company's operating cycle,whichever is longer,are reported as current liabilities.

Correct AnswerverifiedShow Answer

Employers must keep individual earnings reports for each employee.

Correct AnswerverifiedShow Answer

A single liability cannot be divided between current and noncurrent liabilities.

Correct AnswerverifiedShow Answer

The amount of FICA tax that employers must pay is twice the amount of the FICA taxes withheld from their employees.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Match each of the following terms with the appropriate definitions. -A calculation of a company's risk of its ability to pay interest when due.

Correct AnswerverifiedShow Answer

A short-term note payable:

Correct AnswerverifiedShow Answer

Estimated liabilities commonly arise from all of the following except:

Correct AnswerverifiedShow Answer

A company has advance subscription sales totaling $45,000 for the upcoming year when four quarterly journals will mailed to customers.When the company mails the first quarterly journal to customers,it should record:

Correct AnswerverifiedShow Answer

An estimated liability:

Correct AnswerverifiedShow Answer

A company's income before interest expense and income taxes is $350,000 and its interest expense is $100,000.Its times interest earned ratio is:

Correct AnswerverifiedShow Answer

All of the following statements regarding long-term liabilities are true except?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

All of the following are employer payroll taxes except:

Correct AnswerverifiedShow Answer

If the times interest earned ratio:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

When the number of withholding allowances claimed on Form W-4 increases,the amount of income tax withheld decreases.

Correct AnswerverifiedShow Answer

Explain how to calculate times interest earned and how it is used to analyze a company's risk.

Correct AnswerverifiedThe times interest earned ratio is calcu...View AnswerShow Answer

Match the following items with the appropriate designation (Current liability, Long-term liability, or Not a liability) . -Payment of a 30-year term loan due next year.(The company's operating cycle is 2 months.)

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

Correct Answer
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The times interest earned ratio is calcu...
View Answer

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Correct Answer
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