Saturday, June 11, 2011

Chapter 10

1.

The current portion of long-term debt should
Student ResponseValueCorrect AnswerFeedback
Student Response be reclassified as a current liability.100%Student Response
be classified as a long-term liability.
be paid immediately.
not be separated from the long-term portion of debt.
Score:1/1

2.

The proceeds from discounting a $20,000, 60-day, note payable at 6% is $20,200.
Student ResponseValueCorrect AnswerFeedback
True
Student Response False100%Student Response
Score:1/1

3.

The proceeds of a discounted note are equal to the face value of the note.
Student ResponseValueCorrect AnswerFeedback
True
Student Response False100%Student Response
Score:1/1

4.

FICA tax becomes a liability to the federal government at the time an employee's payroll is prepared.
Student ResponseValueCorrect AnswerFeedback
FalseStudent Response
Student Response True0%
Score:0/1

5.

When a borrower receives the face amount of a discounted note less interest, this amount is known as:
Student ResponseValueCorrect AnswerFeedback
the note discount
the note deferred interest
the note principal
Student Response the note proceeds100%Student Response
Score:1/1

6.

One of the more popular defined contribution plans is the 401k plan.
Student ResponseValueCorrect AnswerFeedback
Student Response True100%Student Response
False
Score:1/1

7.

On January 5, 2009, Garrett Company, a calendar-year company, issued $500,000 of notes payable, of which $100,000 is due on January 1 for each of the next five years. The proper balance sheet presentation on December 31, 2009, is
Student ResponseValueCorrect AnswerFeedback
Long-term Debt, $500,000
Student Response Current Liabilities, $100,000; Long-term Debt, $400,000.100%Student Response
Current Liabilities, $500,000.
Current Liabilities, $400,000; Long-term Debt, $100,000.
Score:1/1

8.

An employee receives an hourly 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, 46; federal income tax withheld, $120; cumulative earnings for the year prior to this week, $5,500; Social security tax rate, 6% on maximum of $100,000; and Medicare tax rate, 1.5% on all earnings; state unemployment compensation tax, 3.4% on the first $7,000; federal unemployment compensation tax, .8% on the first $7,000. What is the employer's payroll tax expense?
Student ResponseValueCorrect AnswerFeedback
$55.13
Student Response $86.00100%Student Response
$61.01
$141.13
Score:1/1

9.

The journal entry a company uses to record fully funded pension rights for its salaried employees at the end of the year is
Student ResponseValueCorrect AnswerFeedback
Student Response debit Pension Expense; credit Unfunded Pension Liability0%
debit Salary Expense; credit Cash
debit Pension Expense; credit CashStudent Response
debit Pension Expense; credit Unfunded Pension Liability and Cash
Score:0/1

10.

During September, Excom sold 100 radios for $50 each. Each radio cost Excom $30 to purchase, and carried a two-year warranty. If 5% typically need to be replaced over the warranty period and one is actually replaced during September, for what amount in September would Excom debit Product Warranty Expense?
Student ResponseValueCorrect AnswerFeedback
Student Response $1200%
$30
$150Student Response
$50
Score:0/1

11.

Federal income taxes withheld increase the employer's payroll tax expense.
Student ResponseValueCorrect AnswerFeedback
FalseStudent Response
Student Response True0%
Score:0/1

12.

The following totals for the month of June were taken from the payroll register of Arcon Company:

Salaries expense
$14,000
Social security and Medicare Taxes withheld
975
Income Taxes withheld
2,600
Retirement Savings
1,000

The entry to record the payment of net pay would include a
Student ResponseValueCorrect AnswerFeedback
Debit to Salaries Payable for $9,425
Student Response Credit to Salaries Payable for $9,425100%Student Response
debit to Salaries Payable for $14,000
Credit to Salaries Expense for $9,425
Score:1/1

13.

On June 8, Alton Co. issued an $80,000, 6%, 120-day note payable on an overdue account payable to Seller Co. Assume that the fiscal year of Alton Co. ends June 30. Which of the following relationships is true?
Student ResponseValueCorrect AnswerFeedback
Seller is the creditor and debits Accounts Receivable
Student Response Alton is the borrower and debits Accounts Payable100%Student Response
Seller is the borrower and credits Accounts Payable
Alton is the creditor and credits Accounts Receivable
Score:1/1

14.

Which of the following are included in the employer's payroll taxes?
Student ResponseValueCorrect AnswerFeedback
FUTA taxes
FICA taxes
SUTA taxes
Student Response all of the above100%Student Response
Score:1/1

15.

The journal entry a company uses to record the issuance of a note for the purpose of converting an existing account payable would be
Student ResponseValueCorrect AnswerFeedback
Student Response debit Accounts Payable; credit Notes Payable100%Student Response
debit Cash; credit Notes Payable
debit Accounts, Payable; credit Cash
debit Cash; credit Accounts Payable
Score:1/1

16.

Payroll taxes only include social security taxes and federal unemployment and state unemployment taxes.
Student ResponseValueCorrect AnswerFeedback
Student Response True0%
FalseStudent Response
Score:0/1

17.

When a $40,000, 90-day, 9% interest-bearing note payable matures, total payment will amount to:
Student ResponseValueCorrect AnswerFeedback
$43,600
Student Response $40,900100%Student Response
$3,600
$900
Score:1/1

18.

Prior to the last weekly payroll period of the calendar year, the cumulative earnings of employees A and B are $99,350 and $91,000 respectively. Their earnings for the last completed payroll period of the year are $850 each. The amount of earnings subject to social security tax at 6% is $100,000. All earnings are subject to Medicare tax of 1.5%. Assuming that the payroll will be paid on December 29, what will be the employer's total FICA tax for this payroll period on the two salary amounts of $850 each?
Student ResponseValueCorrect AnswerFeedback
Student Response $115.50100%Student Response
$112.50
$0
$127.50
Score:1/1

19.

Current liabilities are
Student ResponseValueCorrect AnswerFeedback
due, but not receivable for more than one year
Student Response due and payable within one year100%Student Response
due and receivable within one year
due, but not payable for more than one year
Score:1/1

20.

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
Student ResponseValueCorrect AnswerFeedback
debit Pension Expense; credit Unfunded Pension Liability and Cash
debit Pension Expense; credit Cash
Student Response debit Pension Expense; credit Unfunded Pension Liability100%Student Response
debit Salary Expense; credit Cash
Score:1/1

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