Learnsmart 9

On December 1, 20xx, Wayne Co. borrows $25,000 cash from Secure Bank by signing a 120-day, 6% interest-bearing note. Wayne will record interest expense of _____ on December 31. Multiple choice question. $1,500 $375 $500 $125

$125

On January 1, KC Co. borrowed $10,000 cash from Lake St. Bank by signing a 90-day, 8% interest-bearing note. How much interest will result from this note? Multiple choice question. $200 $80 $800 $8,000

$200

Boyd's Bicycle Sales and Repairs Co. offers a 6-month warranty on all new bicycle purchases. Based on history, Boyd determines that warranty repairs are equal to approximately 2% of sales. During the month, Boyd sales total $20,000. Boyd will record Warranty Expense in the amount of ______ for the month. Multiple choice question. $0 $20,400 $400

$400

Victor's Vacuum Sales Co. sells high quality vacuums and provides a one-year warranty on all new sales. Based on history, Victor anticipates that 3% of vacuums will be returned at a cost of $30 per vacuum. During the month, Victor sold 100 vacuums for a total of $35,000. At the end of the month, Victor will record _______ in Warranty Expense. Multiple choice question. $3 $90 $1,050 $0

$90

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. Accounts Payable Accounts Receivable Unearned Fees Wages Payable

Accounts Payable

Fill in the blank question. Jorge Lopez worked 40 hours this week and earned $1,000 gross salary. Federal and state taxes and other withholdings totaled $350. Jorge's gross pay totals $.

Blank 1: 1000 or 1,000

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

Blank 1: 100000

Fill in the blank question. On July 1, Scene Co. borrowed $15,000 cash from First Bank by signing a 30-day, 5% interest-bearing note. Scene will record this entry with a credit to Notes Payable in the amount of $.

Blank 1: 15000

Fill in the blank question. On June 1, Grey Co. borrows $15,000 cash from National Bank by signing a 120-day, 10% interest-bearing note. Grey will record interest during the year totaling $. Using a 360 day year, round your final answer to the nearest whole dollar.

Blank 1: 500

Trighton's Trailer Co. sells all kinds of trailers and provides a one-year warranty on all new trailer sales. Based on history, Trighton anticipates that 2% of trailers will be returned and will have a warranty cost of $100 per trailer. During the month, Victor sold 300 trailers for a total of $255,000. At the end of the month, Trighton will record $ in warranty expense.

Blank 1: 600

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

Blank 1: 650

Federal government taxes implemented on employers in order to provide unemployment benefits to qualified workers are known as (use acronym) .

Blank 1: FUTA

Fill in the blank question. is the difference between the amount borrowed and the amount repaid.

Blank 1: Interest

Employer taxes, such as SUTA, are recorded with a debit to Employer Tax Expense and a credit to SUTA (expense/payable) until payments are submitted to the state.

Blank 1: Payable

Fill in the Blank Question Fill in the blank question. Harvey Co. has current period employee salary expenses of $800. Employee withholdings total $300. The entry to accrue current period payroll will include a credit to Salaries in the amount of $.

Blank 1: Payable Blank 2: 500

State unemployment taxes imposed on employers in order to provide unemployment benefits to qualified workers are known as (use acronym) .

Blank 1: SUTA

A liability created by buying goods or services on credit is typically recorded to .

Blank 1: accounts Blank 2: payable

A liability is a liability due to be paid or settled within one year or the company's operating cycle, whichever is longer.

Blank 1: current or short-term

FICA and unemployment taxes are examples of (employee/employer) taxes.

Blank 1: employer

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

Blank 1: estimated

Rachel Ryder is an employee working at Brand-Mart. Rachel earns $35,000 per year and claims three withholding allowances. The amount withheld from her paycheck, using this information, is called federal taxes.

Blank 1: income

On January 8, Lee Co. borrows $100,000 cash from National Bank by signing a 90-day, 6% interest-bearing 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.

Blank 1: interest

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

Blank 1: known

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.

Blank 1: liability

Bina Consulting Co. collected $500 from a customer in advance to provide consulting fees for the next two months. The $500 would be recorded with a debit to Cash and a credit to the Unearned Revenues, which is a(n) (asset/liability/equity) account.

Blank 1: liability

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

Blank 1: net

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

Blank 1: principal

Fill in the blank question. A contingent liability can be ignored (not recorded in the financial statements or notes to the financial statements) if it is considered as (probable/reasonably possible/remote) possibility.

Blank 1: remote

A is a seller's obligation to replace or correct a product (or service) that fails to perform as expected within a specified period.

Blank 1: warranty

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 _____ in the amount of ______. Multiple choice question. Notes Payable; $1,020 Cash; $1,020 Notes Payable $1,000 Cash; $1,060 Notes Payable; $1,060 Cash; $1,000

Cash; $1,020

Perez Co. sells automotive supplies and warranties them for a three-month period. Perez sold $10,000 of supplies during the month and anticipates that warranty repairs for these sales will total $250. The adjusting entry that Perez will make to record the warranty expense will include which of the following? (Check all that apply.) Multiple select question. Debit to Cash Credit to Estimated Warranty Liability Debit to Estimated Warranty Liability Credit to Cash Credit to Warranty Expense Debit to Warranty Expense

Credit to Estimated Warranty Liability Debit to Warranty Expense

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.

Credit to Notes Payable Debit to Accounts Payable

Handy Holly Co. provides a variety of household repairs and warranties her work for a six-month period. Holly provided $13,000 of service fees during the month and anticipates that warranty repairs for these sales will total $400. The entry that Holly will make to record the estimated warranty expense will include a credit which account? Multiple choice question. No journal entry is necessary until the repair is performed. Repair Parts and Labor Expense Estimated Warranty Liability Warranty Expense

Estimated Warranty Liability

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) _______ account. Multiple choice question. Miscellaneous Repairs Expense Customer Satisfaction Estimated Warranty Liability

Estimated Warranty Liability

Leo Calvin is required to have ______ taxes withheld from his pay in order to cover the cost of future retirement, disability, and survivorship and medical expenses. Multiple choice question. WICA SUTA FICA FUTA

FICA

The federal Social Security system provides retirement, disability, survivorship, and medical benefits to qualified workers. Laws require employers to withhold _____ taxes from employees' pay to cover costs of the system. Multiple choice question. SUTA WICA AAA FICA

FICA

The federal government requires that employers are taxed on employee wages to provide unemployment benefits to qualified workers. These taxes are known as: Multiple choice question.

FUTA

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. Future natural disaster Possible legal claim against a company Probable legal claim against a company Debt guarantee of owner

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 Net pay Hourly rate Gross pay

Gross pay

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

Medical insurance Pension plans

Which of the following items is not a payroll deduction? Multiple choice question. Federal income tax Net pay FICA taxes Employee income tax

Net pay

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. Notes Receivable Accounts Receivable Notes Payable Cash Accounts Payable

Notes Payable

On June 1, Button Co. borrowed $1,000 cash from National Bank by signing a 120-day, 6% interest-bearing note. Button will record this transaction with a credit to _____ in the amount of ______. Multiple choice question. Cash; $1,020 Notes Payable; $1,020 Cash; $1,000 Notes Payable; $1,000 Notes Payable; $1,060 Cash; $1,060

Notes Payable; $1,000

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. Notes Payable; $10,000 Notes Payable; $10,133 Notes Payable; $10,800 Cash; $10,133 Cash; $10,800 Cash; $10,000

Notes Payable; $10,000

The journal entry to record employer tax accruals includes a debit to: Multiple choice question. Salaries Expense Payroll Tax Expense SUTA Payable FUTA Payable

Payroll Tax Expense

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. State taxes Insurance premiums Federal taxes SUTA FICA

SUTA

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

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 possible and cannot be reasonably estimated. The liability is probable and cannot be reasonably estimated. The liability is probable and estimated to be $40,000. The liability is remote and cannot be 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 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 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 possible and estimated to be $25,000. The liability is remote and estimated to be $30,000. The liability is possible, but cannot be reasonably estimated. The liability is probable and estimated to be $10,000.

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 _______. Multiple choice question. Unearned Revenues Prepaid Expense Revenues Earned Accounts Payable

Unearned Revenues

Paid absences that are accrued throughout the year are recorded in the _____________ account. Multiple choice question. Vacation Benefit Expense Wages Expense Employee Benefit Expense

Vacation Benefit Expense

Which of the following items would be considered a current liability? (Check all that apply.) Multiple select question. Wages payable Notes payable, due in 3 months Accounts payable, terms n/30 Notes payable, due in 14 months

Wages payable Notes payable, due in 3 months Accounts payable, terms n/30

Employee ________ 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. benefits taxes withholdings

benefits

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. bonus plan benefit plan vacation plan warranty plan

bonus plan

Teva Co. has current period employee salary expense of $2,000. Employee withholdings total $850. To accrue the current period payroll, Salaries Payable will be (debited/credited) __________ in the amount of ___________. Multiple choice question. credited; $2,850 debited; $2,850 credited; $1,150 debited; $1,150

credited; $1,150

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) _______ to Interest Expense in the amount of _______. Multiple choice question. debit; $75 credit; $75 debit; $600 credit; $600

debit; $75

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

estimated

Most employers are required to withhold ________ from an employee's paycheck. The amount withheld is computed using tables published by the IRS. The amount depends on the employee's annual earnings rate and the number of withholding allowances the employee claims. Multiple choice question. federal income taxes federal unemployment taxes state unemployment taxes

federal income taxes

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

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) ________ account. Multiple choice question. revenue expense dividend liability

liability

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

payroll deductions

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 __________. Multiple choice question. short-term account payable short-term note payable long-term note payable long-term account payable short-term note receivable long-term note receivable

short-term note payable

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) ________ on her balance sheet. Multiple choice question. account payable long-term note payable short-term note payable prepaid expense

short-term note payable

Multiple Choice Question Examples of employee voluntary deductions may include all of the following except: Multiple choice question. medical premiums. pension contributions. unemployment taxes. charitable giving.

unemployment taxes.

Employers often withhold other amounts from employees' earnings which arise from employee requests, contracts, unions, or other agreements. These withholdings are called employee __________ and include items such as medical premiums. Multiple choice question. FICA taxes voluntary deductions unemployment taxes income taxes

voluntary deductions

A known liability arises from a situation with little uncertainty, with set agreements, contracts, or laws. These liabilities are measurable. Known liabilities would include all of the following items, except: Multiple choice question. warranties. payroll obligations. notes payable. unearned fees. accounts payable.

warranties.