Accounting Chapter 11

Winn Co. signs a 60 day note payable for a $15,000 copy machine with an interest rate of 8%. Winn will record total interest expense of Multiple choice question. $15,000 $1,200 $200 $15,200

$200

Jorge Lopez worked 40 hours this week and earned $1,000 in total compensation. Federal and state taxes and other withholdings totaled $350. Jorge's gross pay totals $.

1000

On January 8, Lee Co. borrows $100,000 cash from National Bank by signing a 90-day, 6% interest note. On April 8, Lee Co. will pay National Bank a total of $101,500. Principal on the note totals $.

100000

On March 1, Young Co. borrowed $1,000 by extending their past-due account payable with a 120-day, 6% interest-bearing note. On June 29, the due date, Young pays the amount due in full. This entry would be recorded by Young with a credit to Blank______ in the amount of Blank______.

Cash; $1,020

Employee Blank______ are perks that are provided in addition to salaries and wages, such as all or part of medical, dental, life and disability insurance. Multiple choice question. taxes withholdings benefits

benefits

A Blank______ is when an employer provides employees with a percentage of the company's net income earned during the year. Multiple choice question. benefit plan bonus plan warranty plan vacation benefit plan

bonus plan

Amounts withheld from employee's earnings for employee income tax is considered a Blank______ by the employer until the government is paid. Multiple choice question. long-term liability current asset long-term asset current liability

current liability

Angela Bennett is an employee of Marks Co. This past year, Angela received 1% of Marks net income, in addition to her annual salary. This added benefit is called a: Multiple choice question. warranty plan benefit plan vacation plan bonus plan

bonus plan

When a company guarantees the payment of debt owed by a supplier, customer or another company, the guarantor usually discloses the guarantee as a (known/contingent)_ liability.

contingent

Unearned subscription revenues that extends over multiple periods is an example of a Blank______ known liability. Multiple choice question. long-term multi-period current-period

multi-period

Gross pay minus all deductions—including federal and state taxes, FICA and any voluntary deductions equals pay.

net

Sheldon has a $15,000 liability for a machine that has an interest rate of 10%. The interest expense for one year is? Multiple choice question. $150 $1,500 $15,000 $750

$1,500

Cadie Construction Co. signed a note promising to pay a cement supplier $1,000 60-days from now. As a result of this transaction, Cadie would record a(n) Blank______ on her balance sheet. Multiple choice question. short-term note payable prepaid expense long-term note payable account payable

short-term note payable

Spot Co. purchases office supplies from Sally Supplies, Inc.. Spot does not pay cash for the purchase, and now owes the amount to Sally. This transaction would typically be recorded in which account in Spot's books? Multiple choice question. Wages Payable Unearned Fees Accounts Receivable Accounts Payable

Accounts Payable

______ are amounts owed to suppliers for products or services purchased on credit. Multiple choice question. Unearned fees Wages payable Accounts payable Prepaid supplies Supplies expense

Accounts payable

Patel Paving collected $1,000 cash in advance from a customer to provide paving services next month. The entry to record this cash receipt would include the following entries? (Check all that apply.) Multiple select question. Credit to Cash Credit to Unearned Paving Fees Earned Debit to Paving Fees Earned Credit to Paving Fees Earned Debit to Cash Debit to Unearned Paving Fees Earned

Credit to Unearned Paving Fees Earned Debit to Cash

Niwa Co. replaced a $3,000 account payable balance to Fiona Co. with a 60-day, $3,000 note bearing 5% annual interest. Niwa's entry to record this transaction would include which of the following entries? (Check all that apply.) Multiple select question. Debit to Accounts Payable Debit to Cash Credit to Cash Debit to Notes Payable Credit to Accounts Payable Credit to Notes Payable

Debit to Accounts Payable Credit to Notes Payable

Simar Sales Co. sells and installs kitchen appliances. Simar guarantees parts and labor for one year after installation. Simar would record potential claims in a(n) Blank______ account. Multiple choice question. Miscellaneous Repairs Expense Customer Satisfaction Estimated Warranty Liability

Estimated Warranty Liability

Keys Co. is located in Florida. An evacuation has been ordered due to Hurricane Edward, which is headed in the direction of Keys. Keys should record a contingent liability prior to the evacuation. True false question.TrueFalse

False

Which of the following situations is not a contingent liability? Multiple choice question. Debt guarantee of owner Possible legal claim against a company Future natural disaster Probable legal claim against a company

Future natural disaster

______ is(are) the total compensation an employee earns including wages, salaries, commissions, bonuses, and any compensation earned before deductions such as taxes. Multiple choice question. Payroll deductions Hourly rate Net pay Gross pay

Gross pay

_____ is the difference between the amount borrowed and the amount repaid.

Interest

Bushra Co. replaced a $1,000 account payable balance to Elin Co. with a 120-day, $1,000 note bearing 8% annual interest. Bushra's entry to record this transaction would include a credit to which account? Multiple choice question. Cash Notes Payable Notes Receivable Accounts Receivable Accounts Payable

Notes Payable

On January 1, Avers Co. borrowed $10,000 by extending their past-due account payable with a a 60-day, 8% interest-bearing note. On March 1, the due date, Avers pays the amount due in full. This entry would be recorded by Avers with a debit to (Accounts Payable/Notes Payable/Cash) __ in the amount of __. Multiple choice question. Cash; $10,800 Notes Payable; $10,000 Cash; $10,000 Notes Payable; $10,800 Cash; $10,133 Notes Payable; $10,133

Notes Payable; $10,000

Which of the following items are considered employee benefits? (Check all that apply.) Multiple select question. State unemployment taxes Pension plans Medical insurance Employee withholdings

Pension plans Medical insurance

Zion Co. sells $100 of merchandise and collects $10 sales tax. The sales tax is recorded to which account? Multiple choice question. Sales tax revenue Prepaid sales tax Sales tax expense Sales tax payable

Sales tax payable

Which of the following contingent liabilities would require a company to record a note to the financial statements? (Check all that apply.) Multiple select question. The liability is remote and cannot be estimated. The liability is possible and cannot be reasonably estimated. The liability is probable and cannot be reasonably estimated. The liability is possible and is estimated to be $35,000. The liability is remote and estimated to be $15,000. The liability is probable and estimated to be $40,

The liability is possible and cannot be reasonably estimated. The liability is probable and cannot be reasonably estimated. The liability is possible and is estimated to be $35,000.

Which of the following situations would require a journal entry to record the contingent liability in the financial statements? Multiple choice question. The liability is remote and estimated to be $30,000. incorrect The liability is possible and estimated to be $25,000 Reason: If it is only possible, a note will be included in the financial statements. The liability is probable, but the amount cannot be reasonably estimated. The liability is possible, but cannot be reasonably estimated. The lia

The liability is probable and estimated to be $10,000.

Which of the following situations would not be required to be recorded in the financial statements or reported as a note to the financial statements? Multiple choice question. The liability is probable, but the amount cannot be reasonably estimated. The liability is probable and estimated to be $10,000. The liability is remote and estimated to be $30,000. The liability is possible and estimated to be $25,000. The liability is possible, but cannot be reasonably estimated.

The liability is remote and estimated to be $30,000.

Amounts received in advance from customers for future products or services are typically recorded in a liability account called Blank______. Multiple choice question. Revenues Earned Prepaid Expense Accounts Payable Unearned Revenues

Unearned Revenues

Which of the following liabilities could be a multi-period known liability? (Check all that apply.) Multiple select question. Accounts Payable Unearned Subscription Revenues Notes Payable Wages Payable

Unearned Subscription Revenues Notes Payable

Employers must pay employee taxes in addition to those paid by the employees. Which of the following is paid only by the employer? Multiple choice question. FICA Insurance premiums State taxes Federal taxes Unemployment

Unemployment

Abby Co. allows each employee two weeks of paid time off during each calendar year. Since employees are working for 50 weeks, rather than 52 weeks, Abby must accrue the paid time off during the 50 weeks that the employees work. The year-end adjusting entry is recorded as a credit to the Blank______ account. Multiple choice question. Vacation Benefits Payable Employee Taxes Payable Employee Wages Payable

Vacation Benefits Payable

On June 1, Sawyer Co. borrowed $5,000 by extending their past-due account payable with a 45-day, 12% interest-bearing note. On July 16, the due date, Sawyer pays the amount due in full. Sawyer would record this payment with a (debit/credit) Blank______ to Interest Expense in the amount of Blank______. Multiple choice question. debit; $75 credit; $600 credit; $75 debit; $600

debit; $75

Employee income tax depends on: (Check all that apply.) Multiple select question. employee's income employer's income number of employer withholding allowances number of employee withholding allowances

employee's income number of employee withholding allowances

Unemployment taxes are examples of (employee/employer) required taxes.

employer

A known obligation of an uncertain amount that can be reasonably estimated is called a(n) liability.

estimated

A(n) Blank______ liability is a known obligation that is of an uncertain amount but that can be reasonably estimated. Multiple choice question. estimated multi-period uncertain unreal

estimated

On January 8, Lee Co. borrows $100,000 cash from National Bank by signing a 90-day, 6% interest note. On April 8, Lee Co. will pay National Bank a total of $101,500. The difference between the amount paid back to National Bank of $101,500 and the amount borrowed of $100,000 (or $1,500) represents expense.

interest

A measurable obligation arising from agreements, contracts, or laws is called a _____ liability

known

Bryne Co. sells merchandise and collects a 5% state sales tax. The tax is recorded on Bryne's general ledger as a(n) Blank______ account. Multiple choice question. expense liability revenue asset

liability

When a company has a current obligation to make a future payment to their supplier due to a shipment of supplies that were received last week, the company would record this transaction with an increase to an asset account and a(n) Blank______ account. Multiple choice question. revenue liability expense dividend

liability

a ____ is a probable future payment of assets or services that a company is presently obligated to make as a result of past transactions or events.

liability

A potential legal claim is recorded Multiple choice question. only if the claim can be reasonably estimated. only if the claim cannot be reasonably estimated but is reasonably possible. only if payment for damages is reasonably possible and the amount is reasonable. only if payment for damages is probable and the amount can be reasonably estimated.

only if payment for damages is probable and the amount can be reasonably estimated.

Amounts withheld from an employee's gross pay are called: Multiple choice question. net pay bonus deductions wages payable payroll deductions

payroll deductions

hich of the following represent reasonably possible contingent liabilities? (Check all that apply.) Multiple select question. potential legal claims debt guarantees accounts payable warranties

potential legal claims debt guarantees

_____ of a note is the amount that the signer of a note agrees to pay back when it matures, not including interest.

principal

A written promise to pay a specified amount on a stated future date within one year or the company's operating cycle, whichever is longer, is considered a Blank______. Multiple choice question. long-term account payable short-term account payable long-term note payable short-term note receivable long-term note receivable short-term note payable

short-term note payable

Paid absences offered to employees are called (pension/vacation)_ benefits.

vacation

A known liability is a measurable obligation arising from agreements, contracts, or laws. Known liabilities would include all of the following items, except: Multiple choice question. notes payable. warranties. unearned revenues. accounts payable. payroll obligations.

warranties.

A (repair/warranty) _ is a seller's obligation to replace or fix a product (or service) that fails to perform as expected within a specified period.

warranty