Question 1

Contingent liabilities can be:

Accepted Answer

A)   Probable.
B)   Remote.
C)   Possible.
D)   Estimable.
E)   All of these.F) All of the above
G) A) and D)

Question 2

Halo Company provides you with following information for two of its employees. The company is subject to the following taxes.
Compute amounts for each of these four taxes as applied to each employee's gross earnings for November.

Accepted Answer

The answer of Halo Company provides you with following information...

Question 3

On November 1, Carter Company signed a 120-day, 10% note payable, with a face value of $9,000. What is the maturity value of the note on March 1?

Accepted Answer

A)   $9,000
B)   $9,100
C)   $9,150
D)   $9,200
E)   $9,300F) C) and D)
G) A) and B)

Question 4

Salary expense represents net pay which is pay after deductions for contributions and other deductions.

Accepted Answer

A) True 
 B)False

Question 5

A company has 90 employees and a weekly payroll of $117,000. The FICA-social security tax rate is 6.2% and the FICA-Medicare tax rate is 1.45%. The total withholding for federal income tax is $16,500 for the current week. Calculate the amount of FICA taxes owed (assuming no employee's salary is over the FICA limit) and prepare the journal entry to accrue this week's salaries expense and withholdings.

Accepted Answer

The answer of A company has 90 employees and a...

Question 6

Pastimes Co. offers its employees a bonus equal to 2% of the company's net income. The estimated net income for the year is expected to be $850,000. Prepare the general journal entry to record the employee bonus plan expense.

Accepted Answer

B = 0.02($850,000 - ...

Question 7

The times interest earned ratio reflects:

Accepted Answer

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

Question 8

Debt guarantees:

Accepted Answer

A)   Are never disclosed in the financial statements.
B)   Are considered to be a contingent liability.
C)   Are a bad business practice.
D)   Are recorded as a liability even though it is highly unlikely that the original debtor will default.
E)   All of these.F) B) and D)
G) C) and D)

Question 9

An employee earned $4,300 working for an employer. The current rate for FICA Social Security is 6.2% and the rate for FICA Medicare 1.45%. The employer's total FICA payroll tax for this employee is:

Accepted Answer

A)   $62.35.
B)   $266.60.
C)   $328.95.
D)   $657.90.
E)   Zero, since the FICA tax is a deduction from an employee's pay, and not an employer tax.F) B) and E)
G) B) and C)

Question 10

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)   All of these.F) C) and D)
G) B) and E)

Question 11

Maryland Company offers a bonus plan to its employees equal to 3% of net income. Maryland's net income is expected to be $960,000. The amount of the employee bonus expense is estimated to be

Accepted Answer

A)   $27,961
B)   $28,800
C)   $29,000
D)   $29,691
E)   $30,000F) C) and D)
G) A) and D)

Question 12

A company sold $12,000 worth of trampolines with an extended warranty. It estimates that 2% of these sales will result in warranty work. The company should:

Accepted Answer

A)   Consider the warranty expense a remote liability since the rate is only 2%.
B)   Recognize warranty expense at the time the warranty work is performed.
C)   Recognize warranty expense and liability in the year of the sale.
D)   Consider the warranty expense a contingent liability.
E)   Recognize warranty liability when the company purchases the trampolines.F) A) and B)
G) A) and C)

Question 13

Arena Sports receives $31,680,000 cash in advance ticket sales for 11 home games. Record the advance ticket sales on March 31. Record the revenue earned for the first home game played on August 17.

Accepted Answer

The answer of Arena Sports receives $31,680,000 cash in advance...

Question 14

FICA taxes include:

Accepted Answer

A)   Social Security taxes.
B)   Charitable giving.
C)   Employee income taxes.
D)   Unemployment taxes.
E)   All of these.F) A) and E)
G) B) and D)

Question 15

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 bank account.
D)   There is no need for a payroll register.
E)   There is no need to issue W-2's.F) A) and D)
G) A) and C)

Question 16

Sales taxes payable is credited and cash is debited when companies send sales taxes collected from customers to the government.

Accepted Answer

A) True 
 B)False

Question 17

Phil Phoenix 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% and the FICA tax for Medicare is 1.45%. The FUTA tax rate is 0.8%, 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 annual payroll taxes expenses for this employee?

Accepted Answer

A)   $56.00
B)   $120.18
C)   $378.00
D)   $513.86
E)   $1,068.04F) A) and C)
G) D) and E)

Question 18

A special bank account used solely for the purpose of paying employees, by depositing in the account each pay period an amount equal to the total employees' net pay and drawing the employees' payroll checks on the account, is a(n) :

Accepted Answer

A)   Federal depository bank account.
B)   Employee's Individual Earnings account.
C)   Employees' bank account.
D)   Payroll register account.
E)   Payroll bank account.F) A) and C)
G) B) and E)

Exam 11: Current Liabilities and Payroll Accounting

Halo Company provides you with following information for two of its employees. The company is subject to the following taxes. Compute amounts for each of these four taxes as applied to each employee's gross earnings for November.

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

Correct Answer
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Contingent liabilities can be:

Correct Answer
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If a company uses a special payroll bank account:

Correct Answer
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Maryland Company offers a bonus plan to its employees equal to 3% of net income. Maryland's net income is expected to be $960,000. The amount of the employee bonus expense is estimated to be

Correct Answer
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A company sold $12,000 worth of trampolines with an extended warranty. It estimates that 2% of these sales will result in warranty work. The company should:

Correct Answer
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On November 1, Carter Company signed a 120-day, 10% note payable, with a face value of $9,000. What is the maturity value of the note on March 1?

Correct Answer
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Arena Sports receives $31,680,000 cash in advance ticket sales for 11 home games. Record the advance ticket sales on March 31. Record the revenue earned for the first home game played on August 17.

Correct Answer
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The times interest earned ratio reflects:

Correct Answer
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Pastimes Co. offers its employees a bonus equal to 2% of the company's net income. The estimated net income for the year is expected to be $850,000. Prepare the general journal entry to record the employee bonus plan expense.

Correct Answer
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B = 0.02($850,000 - ...
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Salary expense represents net pay which is pay after deductions for contributions and other deductions.

Correct Answer
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An employee earned $4,300 working for an employer. The current rate for FICA Social Security is 6.2% and the rate for FICA Medicare 1.45%. The employer's total FICA payroll tax for this employee is:

Correct Answer
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Sales taxes payable is credited and cash is debited when companies send sales taxes collected from customers to the government.

Correct Answer
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FICA taxes include:

Correct Answer
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Debt guarantees:

Correct Answer
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Correct Answer
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A special bank account used solely for the purpose of paying employees, by depositing in the account each pay period an amount equal to the total employees' net pay and drawing the employees' payroll checks on the account, is a(n) :

Correct Answer
verified

Exam 11: Current Liabilities and Payroll Accounting

Halo Company provides you with following information for two of its employees. The company is subject to the following taxes. Compute amounts for each of these four taxes as applied to each employee's gross earnings for November.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Contingent liabilities can be:

Correct AnswerverifiedShow Answer

If a company uses a special payroll bank account:

Correct AnswerverifiedShow Answer

Maryland Company offers a bonus plan to its employees equal to 3% of net income. Maryland's net income is expected to be $960,000. The amount of the employee bonus expense is estimated to be

Correct AnswerverifiedShow Answer

A company sold $12,000 worth of trampolines with an extended warranty. It estimates that 2% of these sales will result in warranty work. The company should:

Correct AnswerverifiedShow Answer

On November 1, Carter Company signed a 120-day, 10% note payable, with a face value of $9,000. What is the maturity value of the note on March 1?

Correct AnswerverifiedShow Answer

Arena Sports receives $31,680,000 cash in advance ticket sales for 11 home games. Record the advance ticket sales on March 31. Record the revenue earned for the first home game played on August 17.

Correct AnswerverifiedShow Answer

The times interest earned ratio reflects:

Correct AnswerverifiedShow Answer

Pastimes Co. offers its employees a bonus equal to 2% of the company's net income. The estimated net income for the year is expected to be $850,000. Prepare the general journal entry to record the employee bonus plan expense.

Correct AnswerverifiedB = 0.02($850,000 - ...View AnswerShow Answer

Salary expense represents net pay which is pay after deductions for contributions and other deductions.

Correct AnswerverifiedShow Answer

An employee earned $4,300 working for an employer. The current rate for FICA Social Security is 6.2% and the rate for FICA Medicare 1.45%. The employer's total FICA payroll tax for this employee is:

Correct AnswerverifiedShow Answer

Sales taxes payable is credited and cash is debited when companies send sales taxes collected from customers to the government.

Correct AnswerverifiedShow Answer

FICA taxes include:

Correct AnswerverifiedShow Answer

Debt guarantees:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A special bank account used solely for the purpose of paying employees, by depositing in the account each pay period an amount equal to the total employees' net pay and drawing the employees' payroll checks on the account, is a(n) :

Correct AnswerverifiedShow Answer

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B = 0.02($850,000 - ...
View Answer

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