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Exam 10: Current Liabilities and Payroll

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Question 61

Multiple Choice

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Which of the following is the most desirable quick ratio?

A) 1.20
B) 1.00
C) 0.95
D) 0.50

E) None of the above
F) A) and D)

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Question 62

Multiple Choice

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

A) the note proceeds
B) the note discount
C) the note deferred interest
D) the note principal

E) All of the above
F) A) and C)

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Question 63

Multiple Choice

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On May 18, Rodriguez Co. issued an $84,000, 6%, 120-day note payable on an overdue account payable to Wilson Company. Assume that the fiscal year of Rodriguez ends on June 30. Which of the following relationships is true?

Match the following terms or phrases in a-g) with the explanations in 1-8. Terms or phrases may be used more than once. -Remote contingent liability

The payroll register is a multicolumn form used to assemble the payroll-related data for all employees.

Each year there is a ceiling for the amount that is subject to all of the following except

On June 8, Smith Technologies issued a $75,000, 6%, 140-day note payable to Johnson Company. What is the due date of the note?

The journal entry to record the cost of warranty repairs that were incurred during the current period, but related to sales made in prior years, includes a debit to Warranty Expense.

During September, Excom sold 100 radios for $50 each and provided a two-year warranty with each unit. Each radio cost Excom $30 to produce. If 5% of the goods sold typically need to be replaced over the warranty period and one is actually replaced during September, for what amount in September would Excom debit Product Warranty Expense?

Match each payroll item that follows to the one item a-f) that best describes its characteristics. -FICA - Social security

Match the following terms or phrases in a-g) with the explanations in 1-8. Terms or phrases may be used more than once. -Probable likelihood and estimable liability

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

On January 5, Thomas Company, a calendar-year company, issued $1,000,000 of notes payable, of which $250,000 is due on January 1 each of the next four years. The proper balance sheet presentation on December 31 is

Martinez Co. borrowed $50,000 on March 1 of the current year by signing a 60­day, 9%, interest-bearing note. Assuming a 360-day year, when the note is paid on April 30, the entry to record the payment should include a

The amount of money a borrower receives from the lender is called the discount rate.

Most employers are levied a tax on payrolls for

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

According to a summary of the payroll of Scotland Company, $450,000 was subject to the 6.0% social security tax and $500,000 was subject to the 1.5% Medicare tax. Federal income tax withheld was $98,000. Also, $15,000 was subject to state 4.2%) and federal 0.8%) unemployment taxes. The journal entry to record accrued salaries would include a

Journalize the following transactions for Riley Corporation: Dec. 31 The accrued product warranty expense for the year is estimated to be 2.5% of sales. Sales for the year totaled $8,850,000. 31 The accrued vacation pay for the year is estimated to be $75,000. 31 Paid First Insurance Co. $55,000 as fund trustee for the pension plan. The annual pension cost is $87,000.

Roseland Design borrowed $700,000 on a 90-day note from CorpOne Funding Company. CorpOne discounts the note at 8%. Assume a 360-day year is used for interest calculations.)a) Journalize Roseland's entries to record: a. The issuance of the note. a. The receipt of the note. b. The payment of the note at maturity. b) Journalize CorpOne's entries to record: b. The receipt of the payment of the note at maturity.