Chapter 10 Accounting

Assuming a 360-day year, when a $50,000, 90-day, 9% interest-bearing note payable matures, total payment will be

$51,125

Anderson Co. issued a $59,730, 60-day, discounted note to National Bank. The discount rate is 7%. At maturity, assuming a 360-day year, the borrower will pay:

$59,730

On June 8, Williams Company issued an $71,694, 12%, 120-day note payable to Brown Industries. Assuming a 360-day year for your calculations, what is the maturity value of the note? When required, round your answer to the nearest dollar.

$74,562

The journal entry to record the issuance of a note for the purpose of converting an existing account payable would be

debit Accounts Payable; credit Notes Payable

The journal entry used to record the issuance of a discounted note for the purpose of borrowing funds for the business is

debit Cash and Interest Expense; credit Notes Payable

The journal entry used to record the issuance of an interest-bearing note for the purpose of borrowing funds for the business is

debit Cash; credit Notes Payable

The journal entry used to record the payment of an interest-bearing note is

debit Notes Payable and Interest Expense; credit Cash

The journal entry used to record the payment of a discounted note is

debit Notes Payable; credit Cash

The journal entry a company uses to record the estimated product warranty liability expense is

debit Product Warranty Expense; credit Product Warranty Payable

The journal entry a company uses to record accrued vacation privileges for its employees at the end of the year is

debit Vacation Pay Expense; credit Vacation Pay Payable

A pension plan that promises employees a fixed annual pension benefit, based on years of service and compensation, is called a(n)

defined benefit plan

A pension plan that requires the employer to make annual pension contributions, with no promise to employees regarding future pension payments, is termed

defined contribution

Current liabilities are

due and to be paid out of current assets within one year

Notes may be issued

for all of these

The total earnings of an employee for a payroll period is referred to as

gross pay

The amount of federal income taxes withheld from an employee's gross pay is recorded as a(n)

liability

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

period of the sale of the product

When a borrower receives the face amount of a discounted note less the discount, the amount received is known as

the note proceeds

Which of the following is the most desirable quick ratio?

2.20

Which of the following would most likely be classified as a current liability?

unearned rent

Which of the following will have no effect on an employee's take-home pay?

unemployment tax

A current liability is a debt that is reasonably expected to be paid

within one year

The journal entry to record the conversion of a $6,300 accounts payable to a note payable would be

Accounts Payable 6,300 Notes Payable 6,300

Which of the following taxes are employers required to withhold from employees?

FICA tax

Which of the following taxes would be deducted in determining an employee's net pay?

FICA taxes

Which of the following are included in the employer's payroll taxes?

all are included in employer taxes

Quick assets include

cash, cash equivalents, and receivables

An unfunded pension liability is reported on the balance sheet as

current liability or long-term liability, depending upon when the pension liability is to be paid

Vacation pay payable is reported on the balance sheet as a(n)

current liability or long-term liability, depending upon when the vacations will be taken by employees

Assuming a 360-day year, when a $17,267, 90-day, 7% interest-bearing note payable matures, total payment will be

$17,569