Chapter 10 – Liabilities: Current, Installment Notes, and Contingencies
Copyright Cengage Learning. Powered by Cognero.
Page 21
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.10-01 – LO: 10–01
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.16 – Current Liabilities Reporting
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:27 PM
DATE MODIFIED:
10/16/2017 5:43 PM
54. The journal entry to record the issuance of a note for the purpose of converting an existing account payable would be
a.
debit Cash; credit Accounts Payable
b.
debit Accounts Payable; credit Cash
c.
debit Cash; credit Notes Payable
d.
debit Accounts Payable; credit Notes Payable
ANSWER:
d
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.10-01 – LO: 10–01
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.16 – Current Liabilities Reporting
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:27 PM
DATE MODIFIED:
10/16/2017 5:43 PM
55. The journal entry used to record the issuance of an interest-bearing note for the purpose of borrowing funds for the
business is
a.
b.
c.
d.
ANSWER:
b
POINTS:
1
DIFFICULTY:
Bloom’s: Remembering
Easy
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.10-02 – LO: 10–01
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.16 – Current Liabilities Reporting
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:27 PM
Chapter 10 – Liabilities: Current, Installment Notes, and Contingencies
Copyright Cengage Learning. Powered by Cognero.
Page 24
Interest Expense 7,200
ANSWER:
b
POINTS:
1
DIFFICULTY:
Bloom’s: Remembering
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.10-02 – LO: 10–01
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.16 – Current Liabilities Reporting
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:27 PM
DATE MODIFIED:
10/16/2017 5:43 PM
61. The journal entry to record the conversion of a $6,300 accounts payable to a note payable would be
a.
Cash 6,300
Notes Payable 6,300
b.
Notes Receivable 6,300
Notes Payable 6,300
c.
Notes Payable 6,300
Cash 6,300
d.
Accounts Payable 6,300
Notes Payable 6,300
ANSWER:
d
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.10-01 – LO: 10–01
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.16 – Current Liabilities Reporting
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:27 PM
DATE MODIFIED:
10/16/2017 5:43 PM
62. Current liabilities are
a.
due and receivable within one year
b.
due and to be paid out of current assets within one year
c.
due, but not payable for more than one year
d.
payable if a possible subsequent event occurs
ANSWER:
b
POINTS:
1
Chapter 10 – Liabilities: Current, Installment Notes, and Contingencies
Copyright Cengage Learning. Powered by Cognero.
Page 27
ANSWER:
c
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.10-02 – LO: 10–01
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.14 – Payroll/Other Compensation
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:27 PM
DATE MODIFIED:
10/16/2017 5:43 PM
68. The amount of federal income taxes withheld from an employee’s gross pay is recorded as a(n)
a.
payroll expense
b.
contra account
c.
asset
d.
liability
ANSWER:
d
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.10-02 – LO: 10–01
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.14 – Payroll/Other Compensation
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:27 PM
DATE MODIFIED:
10/16/2017 5:43 PM
69. Which is not a determinate in calculating federal income taxes withheld from an individual’s pay?
a.
marital status
b.
types of earnings
c.
gross pay
d.
number of withholding allowances
ANSWER:
b
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.10-02 – LO: 10–01
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.14 – Payroll/Other Compensation
ACCT.AICPA.BB.03 – Legal
Chapter 10 – Liabilities: Current, Installment Notes, and Contingencies
Copyright Cengage Learning. Powered by Cognero.
Page 29
c.
state unemployment tax
d.
federal unemployment tax
ANSWER:
a
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.10-02 – LO: 10–01
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.14 – Payroll/Other Compensation
ACCT.AICPA.BB.03 – Legal
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:27 PM
DATE MODIFIED:
10/16/2017 5:43 PM
73. Thomas Martin receives an hourly wage rate of $40, with time and a half for all hours worked in excess of 40 hours
during a week. Payroll data for the current week are as follows: hours worked, 48; federal income tax withheld, $350;
social security tax rate, 6.0%; and Medicare tax rate, 1.5%. What is the gross pay for Martin?
a.
$449
b.
$1,730
c.
$2,080
d.
$1,574
ANSWER:
c
RATIONALE:
Gross pay for Martin = Earnings at regular rate + Earnings at overtime rate = [(40 ×
$40) + (8 × $40 × 1.5] = $2,080
POINTS:
1
DIFFICULTY:
Bloom’s: Applying
Moderate
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.10-02 – LO: 10–01
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.14 – Payroll/Other Compensation
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:27 PM
DATE MODIFIED:
10/16/2017 5:43 PM
74. Martin Jackson receives an hourly wage rate of $30, with time and a half for all hours worked in excess of 40 hours
during a week. Payroll data for the current week are as follows: hours worked, 46; federal income tax withheld, $350;
social security tax rate, 6.0%; and Medicare tax rate, 1.5%. What is the net amount to be paid to Jackson?
a.
$1,470.00
b.
$1,009.75
c.
$1,097.95
d.
$460.25
ANSWER:
b