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Exam 10: Current Liabilities and Payroll

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Question 71

Multiple Choice

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A current liability is a debt that is reasonably expected to be paid

A) between 6 months and 18 months.
B) out of currently recognized revenues.
C) within one year.
D) out of cash currently on hand.

E) A) and D)
F) B) and D)

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Question 72

True/False

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The accounting for defined benefit plans is usually very easy and straight forward.

A) True
B) False

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Question 73

Multiple Choice

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On October 30, Seba Salon, Inc. issued a 90-day note with a face amount of $60,000 to Reyes Products, Inc. for merchandise inventory. Assuming a 360-day year, determine the proceeds of the note assuming the note is discounted at 8%.

The borrower is the one who issues a note payable to a creditor.

The amount of federal income taxes withheld from an employee's gross pay is recorded as a(n)

Use the following information to answer the following questions. The following totals for the month of April were taken from the payroll register of Magnum Company. The entry to record accrual of employer's payroll taxes would include a

An aid in internal control over payrolls that indicates employee attendance is

Which of the following would most likely be classified as a current liability?

Federal unemployment taxes are paid by the employer and the employee.

Which of the following taxes would be deducted in determining an employee's net pay?

Obligations that depend on past events and that are based on future possible events are contingent liabilities.

The journal entry a company uses to record the issuance of an interest-bearing note for the purpose of borrowing funds for the business is

The payroll register of Seaside Architecture Company indicates $970 of Social Security and $257 of Medicare tax withheld on total salaries of $16,500 for the period. Federal withholding for the period totaled $4,235. Provide the journal entry for the period's payroll.

Use the following information to answer the following questions. Assuming no employees are subject to ceilings for their earnings, Jensen Company has the following information for the pay period of January 15 - 31, 20xx. Salaries Payable would be recorded in the amount of:

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?

The Crafter Company had the following assets and liabilities as of December 31, 2012: Determine the quick ratio for the end of the year (rounded to one decimal point) .

John Woods' weekly gross earnings for the present week were $2,500. Woods has two exemptions. Using $80 value for each exemption, what is Woods' federal income tax withholding?

The journal entry a company uses to record the payment of an interest-bearing note is

On October 1, Ramos Co. signed a $90,000, 60-day discounted note at the bank. The discount rate was 6%, and the note was paid on November 30. (Assume a 360-day year is used for interest calculations.)

Generally, all deductions made from an employee's gross pay are required by law.