Chapter 11

1. 1The time period for classifying a liability as current is one year or the operating cycle, whichever is:

   1. Alonger.
   2. Bshorter.
   3. Cprobable.
   4. Dpossible.
2. 2To be classified as a current liability, a debt must be expected to be paid within:

   1. A(a) one year.
   2. B(b) the operating cycle.
   3. C(c) 2 years.
   4. D(a) or (b), whichever is longer.
3. 3Maggie Sharrer Company borrows $88,500 on September 1, 2014, from Sandwich State Bank by signing an $88,500, 12%, one-year note. What is the accrued interest at December 31, 2014?

   1. A$2,655.
   2. B$3,540.
   3. C$4,425.
   4. D$10,620.
4. 4RS Company borrowed $70,000 on December 1 on a 6-month, 6% note. At December 31:

   1. Aneither the note payable nor the interest payable is a current liability.
   2. Bthe note payable is a current liability, but the interest payable is not.
   3. Cthe interest payable is a current liability but the note payable is not.
   4. Dboth the note payable and the interest payable are current liabilities.
5. 5Becky Sherrick Company has total proceeds from sales of $4,515. If the proceeds include sales taxes of 5%, the amount to be credited to Sales Revenue is:

   1. A$4,000.
   2. B$4,300.
   3. C$4,289.25.
   4. DNo correct answer given.
6. 6Sensible Insurance Company collected a premium of $18,000 for a 1-year insurance policy on April 1. What amount should Sensible report as a current liability for Unearned Service Revenue at December 31?

   1. A$0.
   2. B$4,500.
   3. C$13,500.
   4. D$18,000.
7. 7Working capital is calculated as:

   1. A(a) current assets minus current liabilities.
   2. B(b) total assets minus total liabilities.
   3. C(c) long-term liabilities minus current liabilities.
   4. DBoth (b) and (c).
8. 8The current ratio is computed as:

   1. Atotal assets divided by total liabilities.
   2. Btotal assets divided by current liabilities.
   3. Ccurrent assets divided by total liabilities.
   4. Dcurrent assets divided by current liabilities.
9. 9A contingent liability should be recorded in the accounts when:

   1. Ait is probable the contingency will happen, but the amount cannot be reasonably estimated.
   2. Bit is reasonably possible the contingency will happen, and the amount can be reasonably estimated.
   3. Cit is probable the contingency will happen, and the amount can be reasonably estimated.
   4. Dit is reasonably possible the contingency will happen, but the amount cannot be reasonably estimated.
10. 10At December 31, Hanes Company prepares an adjusting entry for a product warranty contract. Which of the following accounts is/are included in the entry?

    1. A(a) Miscellaneous Expense.
    2. B(b) Warranty Liability.
    3. C(c) Repair Parts.
    4. DBoth (a) and (b).

11. 11Andy Manion earns $14 per hour for a 40-hour week and $21 per hour for any overtime work. If Manion works 45 hours in a week, gross earnings are:

    1. A$560.
    2. B$630.
    3. C$650.
    4. D$665.
12. 12When recording payroll:

    1. Agross earnings are recorded as salaries and wages payable.
    2. Bnet pay is recorded as salaries and wages expense.
    3. Cpayroll deductions are recorded as liabilities.
    4. DMore than one of the above.
13. 13Employer payroll taxes do not include:

    1. Afederal unemployment taxes.
    2. Bstate unemployment taxes.
    3. Cfederal income taxes.
    4. DFICA taxes.
14. 14FICA Taxes Payable was credited for $7,500 in the entry when Antonio Company recorded payroll. When Antonio Company records employer's payroll taxes, FICA Taxes Payable should be credited for:

    1. A$0.
    2. B$7,500.
    3. C$15,000.
    4. DSome other amount.
15. 15The department that should pay the payroll is the:

    1. Atimekeeping department.
    2. Bhuman resources department.
    3. Cpayroll department.
    4. Dtreasurer's department.
16. 16Which of the following is not an additional fringe benefit?

    1. APostretirement pensions.
    2. BPaid absences.
    3. CPaid vacations.
    4. DSalaries.

Description

221 Principles of Accounting I Quiz on Chapter 11, created by Emily Christisen on 11/05/2016.

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Emily Christisen

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