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MULTIPLE CHOICE QUESTIONS 39.All of the following are reported as current liabilities except a.accounts payable. b.bonds payable. c.notes payable. d.unearned revenues. 40.The relationship between current liabilities and current assets is a.useful in determining income. b.useful in evaluating a company's liquidity. c.called the matching principle. d.useful in determining the amount of a company's long-term debt. 41.Most companies pay current liabilities a.out of current.
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S-A E 313(Communication) The Restor-It is a company specializing in the restoration of old homes. To showcase its work, the company purchased an old Victorian home in downtown Pittsburg, Kansas. The original home was purchased for $125,000. A new heating and air-conditioning system was added for $30,000. The house was completely.
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Ex. 189 Dorie Greenspan Publications publishes a food and travel magazine. The magazine sells for $3 a copy on the newsstand. Yearly subscriptions to the magazine cost $24 per year (12 issues). During December 2016, Dorie Greenspan Publications sells 12,000 copies of the food and travel magazine at newsstands and receives.
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99.The current ratio is a.current assets plus current liabilities. b.current assets minus current liabilities. c.current assets divided by current liabilities. d.current assets multiplied by current liabilities. 100.Monkee's Company has current assets of $45,000, current liabilities of $50,000, long-term assets of $90,000 and long-term liabilities of $40,000. Monkee's Company's working capital and its current ratio are: a.$45,000.
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129.The following totals for the month of April were taken from the payroll register of Asplend Company. a.debit to Payroll Tax Expense for $1,488. b.debit to Payroll Tax Expense for $6,996. c.credit to FICA Taxes Payable for $11,016. d.credit to Payroll Tax Expense for $1,488. 130.The following totals for the month of April were taken.
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COMPLETION STATEMENTS               204.A current liability is a debt that can be expected to be paid within ______________ year or the ______________, whichever is longer.               205.Liabilities are classified on the balance sheet as being _______________ liabilities or ______________ liabilities.               206.Obligations in written form are called ______________ and usually require the borrower.
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SHORT-ANSWER ESSAY QUESTIONS S-A E 305 The declining-balance method is an accelerated method of depreciation. Briefly explain what is meant by an accelerated method of depreciation and justify the choosing of an accelerated method. S-A E 306 Identify the factors that are considered in classifying an expenditure as a capital or a revenue expenditure..
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68.Brekke and Fig decide to organize a partnership. Brekke invests $30,000 cash, and Fig contributes $24,000 cash and equipment having a book value of $12,000. Choose the entry to record Fig’s investment in the partnership assuming the equipment has a fair value of $18,000. a.Cash24,000 b.Equipment 12,000 c.Cash24,000 d.Cash24,000 69.M. Abadie and S. Collier combine.
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118.In liquidation, balances prior to the distribution of cash to the partners are: Cash $204,000; Paley, Capital $112,000; Stengel, Capital $104,000, and King, Capital $12,000 deficiency. The income ratio is 6:2:2, respectively. How much cash should be distributed to Stengel if King does not pay his deficiency? a.$98,000 b.$101,000 c.$95,000 d.$104,000 119.Use the following account.
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108.The liquidation of a partnership a.cannot be a voluntary act of the partners. b.terminates the business. c.eliminates those partners with a capital deficiency. d.cannot occur unless all partners approve. 109.The liquidation of a partnership is a process containing the following steps: 1.Pay partnership liabilities in cash. 2.Allocate the gain or loss on realization to the partners on.
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a138.A bonus to a new partner a.is prohibited by GAAP. b.results when the new partner's capital credit is less than his or her investment of assets in the firm. c.may occur when recorded book values are lower than market values. d.results when the new partner's capital credit is greater than his or her investment.
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48.In a partnership, mutual agency means a.each partner acts on his own behalf when engaging in partnership business. b.the act of any partner is binding on all other partners, only if partners act within their scope of authority. c.an act by a partner is judged as binding on other partners depending on whether.
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139.By January 31 following the end of a calendar year, an employer is required to provide each employee with a(n) a.state unemployment tax form. b.federal unemployment tax form 940. c.wage and tax statement form W-2. d.employee's withholding allowance certificate form W-4. 140.Which of the following payroll taxes are usually filed and remitted annually? a.Federal unemployment taxes b.FICA.
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Ex. 180 Dunlin Development Company had the following transactions involving notes payable. Nov. 1, 2016Borrows $120,000 from Merchants and Marine Bank by signing a 3-month, 10% note. Dec. 31, 2016Prepares the adjusting entry. Feb. 1, 2017Pays principal and interest to Merchants and Marine Bank. Instructions Prepare journal entries for each of the transactions. Ex. 181 LaCrema Company publishes.
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11.Unless stated otherwise in the partnership contract, profits and losses are shared among the partners in the ratio of their capital equity balances. 12.If salary allowances and interest on capital are stipulated in the partnership profit and loss sharing agreement, they are implemented only if income is sufficient to cover the.
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98.The balance sheet of a partnership will a.report retained earnings below the partnership capital accounts. b.show a separate capital account for each partner. c.show a separate drawing account for each partner. d.show the amount of income that was distributed to each partner. 99.The liquidation of a partnership may result from each of the following except.
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11.Interest expense on a note payable is only recorded at maturity. 12.Interest expense is reported under Other Expenses and Losses in the income statement. 13.Unearned revenues should be classified as Other Revenues and Gains on the Income Statement. 14.The higher the sales tax rate, the more profit a retailer can earn. 15.Metropolitan Symphony sells.
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79.A cash register tape shows cash sales of $3,000 and sales taxes of $240. The journal entry to record this information is a.Cash3,240 b.Cash3,240 c.Cash3,000 d.Cash3,240 80.Maple Street Bookstore has collected $1,500 in sales taxes during April. If sales taxes must be remitted to the state government monthly, what entry will Maple Street Bookstore make.
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58.Bagley invests personally owned equipment, which originally cost $220,000 and has accumulated depreciation of $60,000 in the Bagley and Eggers partnership. Both partners agree that the fair value of the equipment was $120,000. The entry made by the partnership to record Bagley’s investment should be a.Equipment220,000 b.Equipment160,000 c.Equipment120,000 d.Equipment120,000 59.Nate is investing in a partnership.
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21.A contingent liability is a liability that may occur if some future event takes place. 22.In concept, the estimating of Warranty Expense when products are sold under warranty is similar to the estimating of Bad Debt Expense based on credit sales. 23.FICA taxes and federal income taxes are levied on employees' earnings.
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149.A current liability is a debt the company reasonably expects to pay from existing current assets within a.one year. b.the operating cycle. c.one year or the operating cycle, whichever is longer. d.one year or the operating cycle, whichever is shorter. 150.Which of the following statements concerning current liabilities is incorrect? a.Current liabilities include unearned revenues. b.A company.
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MULTIPLE CHOICE QUESTIONS 38.A hybrid form of business organization with certain features like a corporation is a(n) a.limited liability partnership. b.limited liability company. c."S" corporation. d.sub-chapter "S" corporation. 39.A partnership a.has only one owner. b.pays taxes on partnership income. c.must file an information tax return. d.is not an accounting entity for financial reporting purposes. 40.A general partner in a partnership a.has unlimited.
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78.The Mayer and Rodin partnership agreement stipulates that profits and losses will be shared equally after salary allowances of $400,000 for Mayer and $200,000 for Rodin. At the beginning of the year, Mayer’s Capital account had a balance of $800,000, while Rodin’s ' Capital account had a balance of $700,000..
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S-A E 307 What are the similarities and differences between the terms depreciation, depletion, and amortization? S-A E 308 In general, how does one determine whether or not an expenditure should be included in the acquisition cost of property, plant, and equipment? S-A E 309 Comment on the validity of the following statements: “As an.
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21.The function of the Partners' Capital Statement is to explain the changes in partners' capital account balances during a period. 22.A detailed listing of all the assets invested by a partner in a partnership appears on the Partners' Capital Statement. 23.Total partners' equity of a partnership is equal to the sum of.
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a128.Jill and Smita have partnership capital account balances of $1,056,000 and $792,000, respectively and share profits and losses equally. Sierra is admitted to the partnership by investing $440,000 for a one-fourth ownership interest. The balance of Smita’s Capital account after Sierra is admitted is a.$726,000. b.$792,000. c.$858,000. d.$572,000. a129.The admission of a new partner to.
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Ex. 177 Faulkner Company has the following selected accounts after posting adjusting entries: Accounts Payable$  45,000 Notes Payable, 3-month70,000 Accumulated Depreciation—Equipment14,000 FICA Taxes Payable27,000 Notes Payable, 5-year, 8%30,000 Warranty Liability29,000 Payroll Tax Expense6,000 Interest Payable3,000 Mortgage Payable200,000 Sales Taxes Payable16,000 Instructions (a)Prepare the current liability section of Faulkner Company's balance sheet, assuming $25,000 of the mortgage is payable next year. (List liabilities in.
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TRUE-FALSE STATEMENTS 1.A current liability must be paid out of current earnings. 2.Current liabilities are expected to be paid within one year or the operating cycle, whichever is longer. 3.The relationship between current liabilities and current assets is important in evaluating a company's ability to pay off its long-term debt. 4.A company whose current.
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Ex. 183 Back Cove Yacht Company billed its customers a total of $1,575,000 for the month of November. The total includes a 5% state sales tax. Instructions (a)Determine the proper amount of revenue to report for the month. (b)Prepare the general journal entry to record the revenue and related liabilities for the month. Ex. 184 Ishee.
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69.The interest charged on a $100,000 note payable, at the rate of 6%, on a 2-month note would be a.$6,000. b.$3,000. c.$1,500. d.$1,000. 70.On October 1, 2017, Dakota Company issued an $800,000, 10%, nine-month interest-bearing note. If the Dakota Company is preparing financial statements at December 31, 2017, the adjusting entry for accrued interest will.
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MATCHING 214.Match the items below by entering the appropriate code letter in the space provided. A.Current liabilityF.Federal income taxes B.Notes payableG.FICA taxes C.Wage and Tax StatementH.Federal unemployment taxes D.Current ratioaI.Post-retirement benefits E.Contingent liabilityaJ.Pension plan _____              1.Levied against employees' wages without limit. _____              2.An obligation in the form of a written promissory note. _____              3.An agreement whereby an employer provides.
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109.The accounting for warranty costs is based on the a.going concern principle. b.expense recognition principle. c.conservatism concept. d.historical cost principle. 110.Warranty expenses are reported on the income statement as a.administrative expenses. b.part of cost of goods sold. c.contra-revenues. d.selling expenses. 111.Lulzbot.com sells 6,000 units of its product for $500 each. The selling price includes a one-year warranty on parts. It.
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Ex. 198 Assume that the payroll records of Klein Oil Company provided the following information for the weekly payroll ended November 30, 2017. Year-to-Date HourlyFederalEarnings Through EmployeeHours WorkedPay RateIncome TaxUnion Dues   Previous Week  T. King44$55$442$9$118,000 T. Binion461597523,200 N.Cole4025148—5,700 C. Hennesey4230230749,500 Ex. 198(Cont.) Additional information: All employees are paid overtime at time and a half for hours worked in excess of.
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Ex. 186 Based on the following information, compute the (1) current ratio and (2) working capital. Current assets$200,000 Total assets900,000Current liabilities80,000Total liabilities500,000 Instructions Compute these values: (a)Working capital.(b)Current ratio. Ex. 188 Sweet Baking Company sells professional grade mixers for home use. The machines carry a 2-year warranty. Past experience indicates that 6% of the units sold will be.
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88.A partners' capital statement explains a.the amount of legal liability of each of the partners. b.the types of assets invested in the business by each partner. c.how the partnership will be capitalized if a new partner is admitted to the partnership. d.the changes in each partner's capital account and in total partnership capital during.
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89.Mast General Store has total receipts for the month of $45,990 including sales taxes. If the sales tax rate is 5%, what are Mast's sales for the month? a.$43,691 b.$43,800 c.$48,290 d.It cannot be determined. 90.A cash register tape shows cash sales of $5,000 and sales taxes of $300. The journal entry to record this.
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BRIEF EXERCISES BE 167 Sonoma Company has the following selected accounts after posting adjusting entries: Accounts Payable$  62,000 Notes Payable, 3-month40,000 Accumulated Depreciation—Equipment14,000 Notes Payable, 5-year, 6%80,000 Payroll Tax Expense4,000 Interest Payable3,000 Mortgage Payable120,000 Sales Taxes Payable38,000 Instructions Prepare the current liability section of Sonoma Company's balance sheet, assuming $16,000 of the mortgage is payable next year. BE 168 Identify which of the following.
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Ex. 196 Takei Company's payroll for the week ending January 15 amounted to $367,000 for salaries and wages. None of the employees has reached the earnings limits specified for federal or state employer payroll taxes. The following deductions were withheld from employees' salaries and wages: Federal Income Tax$75,000 State Income Tax13,500 FICA Taxes28,075 Union Dues4,100 United.
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59.Interest expense on an interest-bearing note is a.always equal to zero. b.accrued over the life of the note. c.only recorded at the time the note is issued. d.only recorded at maturity when the note is paid. 60.The entry to record the payment of an interest-bearing note at maturity after all interest expense has been recognized.
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TRUE-FALSE STATEMENTS 1.The personal assets, liabilities, and personal transactions of partners are excluded from the accounting records of the partnership. 2.The act of any partner is binding on all other partners if the act appears to be appropriate for the partnership. 3.A major advantage of the partnership form of organization is that the.
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S-A E  218 (a)Identify the three types of employer payroll taxes. (b)How are tax liability accounts and payroll tax expense accounts classified in the financial statements? S-A E  219(Ethics) Borowitz Company maintains two separate accounts payable computer systems. One is known to all the users, and is used to process payments to vendors. Employees.
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Ex. 194 Employee earnings records for Oz Company reveal the following gross earnings for four employees through the pay period of December 15. T. Tucker$  95,500D. Paiva$115,500 B. Bitney$114,200N. Doane$118,000 For the pay period ending December 31, each employee's gross earnings is $4,800. The FICA tax rate is 7.65% on gross earnings of $117,000. Instructions Compute.
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49.With an interest-bearing note, the amount of assets received upon issuance of the note is generally a.equal to the note's face value. b.greater than the note's face value. c.less than the note's face value. d.equal to the note's maturity value. 50.A note payable is in the form of a.a contingency that is reasonably likely to occur. b.a.
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Ex. 201 In March, gross earnings of Perlman Company totaled $250,000. All earnings are subject to 7.65% FICA taxes, 5.4% state unemployment taxes, and 0.8% federal unemployment taxes. Instructions(a)Compute the employer's payroll tax expense.(b)Prepare the entry to record payroll taxes. Ex. 202 The following payroll liability accounts are included in the ledger of Devito.
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SHORT-ANSWER ESSAY QUESTIONS S-A E 215 A company will incur product repair costs in the future if products that it sells currently under warranty are brought in for repair during the warranty period. The company will also incur bad debts expense in the future if customers who buy on credit currently are.
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