Question 1

Employers can use a wage bracket withholding table to compute federal income taxes withheld from each employee's gross pay.

Accepted Answer

A) True 
 B)False

Question 2

SaveMart had income before interest expense and income taxes of $12,581 million and interest expense of $1,063 million. Valueland had income before interest expense and income taxes of
$3,596 million and interest expense of $1,143 million. Calculate the times interest earned for each company and comment on the results.

Accepted Answer

SaveMart times interest earned = 11.8; V...

Question 3

The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both taxes are applied to the first $7,000 of an employee's pay. Assume that an employee earned total wages of $2,900 in the current period and had cumulative pay for prior periods of $5,800. What is the amount of unemployment taxes the employer must pay on this employee's wages for the current period?

Accepted Answer

A)  $174.00.
B)  $0.00.
C)  $348.00.
D)  $420.00.
E)  $72.00.F) A) and B)
G) A) and C)

Question 4

The Wage and Tax Statement given to each employee annually is:

Accepted Answer

A)  Form W-4.
B)  Form 1040.
C)  Form W-2.
D)  Form 941.
E)  Form 940.F) C) and D)
G) A) and D)

Question 5

Match between columns
                        Premises: A record for a pay period that shows the pay period dates, regular and overtime hours worked, gross pay, net pay and deductions.
A bank authorized to accept deposits of amounts payable to the federal government, including payroll taxes.
Obligations due within one year or the company's operating cycle, whichever is longer.
A calculation of a company's risk of its ability to pay interest when due.
Payments of income taxes that are deferred until future years because of temporary differences between GAAP and tax accounting rules.
Compensation provided to employees beyond salaries and wages, such as premiums for medical insurance and contributions to pension plans.
A special bank account used solely for paying employees; each pay period an amount equal to the total employees' net pay is deposited and the employees' payroll checks are drawn on that account.
Total compensation earned by an employee.
A seller's obligation to replace or correct a product or service that fails to perform as expected within a specified period.
A written promise to pay a specified amount on a definite future date within one year or the company's operating cycle, whichever is longer.

Accepted Answer

The Answer of Payroll bank account and Employee benefits and is...

Question 6

Obligations not due within one year or the company's operating cycle, whichever is longer, are reported as current liabilities.

Accepted Answer

A) True 
 B)False

Question 7

Estimated liabilities commonly arise from all of the following except:

Accepted Answer

A)  Vacation benefits.
B)  Warranties.
C)  Income taxes.
D)  Employee benefits.
E)  Unearned revenues.F) A) and E)
G) C) and D)

Question 8

A high merit rating for state unemployment taxes means that an employer has high employee turnover or seasonal hiring.

Accepted Answer

A) True 
 B)False

Question 9

Gross pay is:

Accepted Answer

A)  Total compensation earned by an employee before any deductions.
B)  Salaries after taxes are deducted.
C)  Deductions withheld by an employer.
D)  The amount of the paycheck.
E)  Take-home pay.F) A) and B)
G) All of the above

Question 10

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

Accepted Answer

A)  W-2.
B)  Form 1040.
C)  W-4.
D)  Form 941.
E)  Form 1099.F) A) and B)
G) B) and D)

Question 11

Short-term notes payable:

Accepted Answer

A)  Are not negotiable.
B)  Cannot replace an account payable.
C)  Are a conditional promise to pay.
D)  Can be issued in return for money borrowed from a bank.
E)  Rarely involve interest charges.F) C) and E)
G) A) and B)

Question 12

A known obligation of an uncertain amount that can at least be reasonably estimated is reported as an estimated liability.

Accepted Answer

A) True 
 B)False

Question 13

Uncertainties from the development of new competing products are not contingent liabilities.

Accepted Answer

A) True 
 B)False

Question 14

Explain how to calculate times interest earned and how it is used to analyze a company's risk.

Accepted Answer

The times interest earned ratio is calcu...

Question 15

If a company has advance subscription sales totaling $45,000 for the upcoming year when four quarterly journals will mailed to customers, the receipt of cash would be journalized as:

Accepted Answer

A)  Debit Cash $45,000, credit Sales $45,000.
B)  Debit Sales $45,000, credit Unearned Revenue $45,000.
C)  Debit Prepaid Subscriptions $45,000, credit Sales $45,000.
D)  Debit Unearned Revenue $45,000; credit Sales $45,000.
E)  Debit Cash $45,000; credit Unearned Revenue $45,000.F) C) and D)
G) A) and B)

Question 16

The report that shows the pay period dates, hours worked, gross pay, deductions, and net pay of each employee for every pay period is the payroll register.

Accepted Answer

A) True 
 B)False

Question 17

Companies with many employees rarely use a special payroll bank account from which to pay employees.

Accepted Answer

A) True 
 B)False

Question 18

A liability 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.

Accepted Answer

A) True 
 B)False

Question 19

On May 22, Jarrett Company borrows $7,500 from Fairmont Financing, signing a 90-day, 8%, $7,500 note. What is the journal entry needed to record the transaction by Jarrett Company?

Accepted Answer

A)  Debit Cash $7,500; credit Notes Payable $7,500.
B)  Debit Notes Receivable $7,500; credit Cash $7,500.
C)  Debit Cash $7,650; credit Notes Payable $7,650.
D)  Debit Accounts Payable $7,500; credit Notes Payable $7,500.
E)  Debit Cash $7,500; credit Accounts Payable $7,500.F) B) and D)
G) C) and E)

Question 20

A company's income before interest expense and income taxes is $302,400, and its interest expense is $62,000. Calculate the company's times interest earned ratio.

Accepted Answer

The answer of A company's income before interest expense and...

Exam 11: Current Liabilities and Payroll Accounting

Correct Answer
verified
SaveMart times interest earned = 11.8; V...
View Answer

Obligations not due within one year or the company's operating cycle, whichever is longer, are reported as current liabilities.

Correct Answer
verified

Companies with many employees rarely use a special payroll bank account from which to pay employees.

Correct Answer
verified

The Wage and Tax Statement given to each employee annually is:

Correct Answer
verified

On May 22, Jarrett Company borrows $7,500 from Fairmont Financing, signing a 90-day, 8%, $7,500 note. What is the journal entry needed to record the transaction by Jarrett Company?

Correct Answer
verified

Short-term notes payable:

Correct Answer
verified

A high merit rating for state unemployment taxes means that an employer has high employee turnover or seasonal hiring.

Correct Answer
verified

A company's income before interest expense and income taxes is $302,400, and its interest expense is $62,000. Calculate the company's times interest earned ratio.

Correct Answer
verified

Estimated liabilities commonly arise from all of the following except:

Correct Answer
verified

Uncertainties from the development of new competing products are not contingent liabilities.

Correct Answer
verified

A liability 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.

Correct Answer
verified

Explain how to calculate times interest earned and how it is used to analyze a company's risk.

Correct Answer
verified
The times interest earned ratio is calcu...
View Answer

Match each of the appropriate definitions with terms

The report that shows the pay period dates, hours worked, gross pay, deductions, and net pay of each employee for every pay period is the payroll register.

Correct Answer
verified

Employers can use a wage bracket withholding table to compute federal income taxes withheld from each employee's gross pay.

Correct Answer
verified

A known obligation of an uncertain amount that can at least be reasonably estimated is reported as an estimated liability.

Correct Answer
verified

Correct Answer
verified

If a company has advance subscription sales totaling $45,000 for the upcoming year when four quarterly journals will mailed to customers, the receipt of cash would be journalized as:

Correct Answer
verified

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

Correct Answer
verified

Gross pay is:

Correct Answer
verified

Exam 11: Current Liabilities and Payroll Accounting

Correct AnswerverifiedSaveMart times interest earned = 11.8; V...View AnswerShow Answer

Obligations not due within one year or the company's operating cycle, whichever is longer, are reported as current liabilities.

Correct AnswerverifiedShow Answer

Companies with many employees rarely use a special payroll bank account from which to pay employees.

Correct AnswerverifiedShow Answer

The Wage and Tax Statement given to each employee annually is:

Correct AnswerverifiedShow Answer

On May 22, Jarrett Company borrows $7,500 from Fairmont Financing, signing a 90-day, 8%, $7,500 note. What is the journal entry needed to record the transaction by Jarrett Company?

Correct AnswerverifiedShow Answer

Short-term notes payable:

Correct AnswerverifiedShow Answer

A high merit rating for state unemployment taxes means that an employer has high employee turnover or seasonal hiring.

Correct AnswerverifiedShow Answer

A company's income before interest expense and income taxes is $302,400, and its interest expense is $62,000. Calculate the company's times interest earned ratio.

Correct AnswerverifiedShow Answer

Estimated liabilities commonly arise from all of the following except:

Correct AnswerverifiedShow Answer

Uncertainties from the development of new competing products are not contingent liabilities.

Correct AnswerverifiedShow Answer

A liability 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.

Correct AnswerverifiedShow Answer

Explain how to calculate times interest earned and how it is used to analyze a company's risk.

Correct AnswerverifiedThe times interest earned ratio is calcu...View AnswerShow Answer

Match each of the appropriate definitions with terms

The report that shows the pay period dates, hours worked, gross pay, deductions, and net pay of each employee for every pay period is the payroll register.

Correct AnswerverifiedShow Answer

Employers can use a wage bracket withholding table to compute federal income taxes withheld from each employee's gross pay.

Correct AnswerverifiedShow Answer

A known obligation of an uncertain amount that can at least be reasonably estimated is reported as an estimated liability.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If a company has advance subscription sales totaling $45,000 for the upcoming year when four quarterly journals will mailed to customers, the receipt of cash would be journalized as:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Gross pay is:

Correct AnswerverifiedShow Answer

Correct Answer
verified
SaveMart times interest earned = 11.8; V...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
The times interest earned ratio is calcu...
View Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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