Entry to record the payment based problem

Question

Question 1.  Current liabilities are

• Due, but not receivable for more than one year
• Due, but not payable for more than one year
• Due and receivable within one year
• Due and payable within one year

Question 2. On June 8, Alton Co. issued an $80,000, 6%, 120-day note payable to Seller Co. What is the due date of the note?

• October 8
• October 7
• October 6
• October 5

Question 3.  On July 8, Alton Co. issued an $80,000, 6%, 120-day note payable to Seller Co. Assume that the fiscal year of Alton Co. ends July 31. Using the 360-day year in your calculations, what is the amount of interest expense recognized by Alton in the current fiscal year?

• $1,200.00
• $106.67
• $306.67
• $400.00

Question 4.  A business borrowed $40,000 on March 1 of the current year by signing a 30-day, 9% interest bearing note. When the note is paid on March 31, the entry to record the payment should include a

• Debit to Interest Payable $300
• Debit to Interest Expense $300
• Credit to Cash for $40,000
• Credit to Cash for $43,600

Question 5. Mobile Co. issued a $45,000, 60-day, discounted note to Guarantee Bank. The discount rate is 6%. At maturity, the borrower will pay:

• $45,450
• $42,300
• $45,000
• $44,550

Question 6.  The journal entry to record the conversion of an $550 accounts payable to a notes payable would be: 
 
Question 7.  The amount of federal income taxes withheld from an employee's gross pay is recorded as a(n)

• Payroll expense
• Contra account
• Asset
• Liability

Question 8. An employee receives an hourly rate of $40, with time and a half for all hours worked in excess of 40 during a week. Payroll data for the current week are as follows: hours worked, 46; federal income tax withheld, $350; cumulative earnings for year prior to current week, $99,700; social security tax rate, 6.0% on maximum of $100,000; and Medicare tax rate, 1.5% on all earnings. What is the gross pay for the employee?

• $775.00
• $1,840.00
• $1,960.00
• $1,562.60

Question 9. Which of the following are included in the employer's payroll taxes?

• SUTA taxes
• FUTA taxes
• FICA taxes
• All of the above

Question 10.  Moore Company has the following information for the pay period of December 15 - 31, 20xx.
 
Salaries Payable would be recorded for

• $18,000
• $12,950
• $12,650
• $11,534

Question 11.  Which of the following forms is typically given to employees at the end of the calendar year so that employees can file their individual income tax forms?

• Employment Withholding Allowance Certificate (W-4)
• Wage and Tax Statement (Form W-2)
• Employer's Quarterly Federal Tax Return (Form 941)
• 401k plans

Question 12.  During its first year of operations, a company granted employees vacation privileges and pension rights estimated at a cost of $21,500 and $15,000. The vacations are expected to be taken in the next year and the pension rights are expected to be paid in the future 5-30 years. What is the total cost of vacation pay and pension rights to be recognized in the first year?

• $15,000
• $36,500
• $6,500
• $21,500

Question 13. 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
• Debit Vacation Pay Payable; credit Vacation Pay Expense
• Debit Salary Expense; credit Cash
• Debit Salary Expense; credit Salaries Payable

Question 14. The journal entry a company uses to record pension rights that have not been funded for its salaried employees, at the end of the year is

• Debit Salary Expense; credit Cash
• Debit Pension Expense; credit Unfunded Pension Liability
• Debit Pension Expense; credit Unfunded Pension Liability and Cash
• Debit Pension Expense; credit Cash

Question 15.  Based on the following data, what is the acid-test ratio, rounded to one decimal point?

• 3.4
• 3.0
• 2.2
• 1.8

Question 16. Research Company sells merchandise with a one year warranty. In 2009, sales consisted of 2,500 units. It is estimated that warranty repairs will average $10 per unit sold, and 30% of the repairs will be made in 2009 and 70% in 2010. In the 2009 income statement, Searches should show warranty expense of

• $25,000
• $7,500
• $17,500
• $0

Question 17. Estimating and recording product warranty expense in the period of the sale best follows which of the following accounting concepts?

• Cost concept
• Business entity concept
• Matching Concept
• Materiality concept