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Accounting Principles , Tenth Edition

Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

Chapter 11

Current Liabilities and Payroll Accounting - all with Video Answers

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Chapter Questions

Problem 1

The time period for classifying a liability as current is one year or the operating cycle, whichever is:
a. longer.
c. probable.
b. shorter.
d. possible.

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Problem 2

To be classified as a current liability, a debt must be expected to be paid:
a. out of existing current assets.
b. by creating other current liabilities.
c. within 2 years.
d. Both (a) and (b).

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01:44

Problem 3

Maggie Sharrer Company borrows $$\$ 88,500$$ on September 1. 2012, from Sandwich State Bank by signing an $$\$ 88,500$$, $$12 \%$$, one-year note. What is the accrued interest at December 31, 2012?
a. $$\$ 2,655$$.
c. $$\$ 4,425$$.
b. $$\$ 3,540$$.
d. $$\$ 10,620$$.

Carson Merrill
Carson Merrill
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Problem 4

RS Company borrowed $$\$ 70,000$$ on December 1 on a 6-month, $$6 \%$$ note. At December 31 :
a. neither the note payable nor the interest payable is a current liability.
b. the note payable is a current liability, but the interest payable is not.
c. the interest payable is a current liability but the note payable is not.
d. both the note payable and the interest payable are current liabilities.

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03:51

Problem 5

Becky Sherrick Company bas total proceeds from sales of $$\$ 4,515$$. If the proceeds include sales taxes of $$5 \%$ $, the amount to be credited to Sales Revenue is:
a. $$\$ 4,000$$.
c. $$\$ 4.289 .25$$.
b. $$\$ 4,300$$.
d. No correct answer given.

Amany Waheeb
Amany Waheeb
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02:43

Problem 6

Sensible 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 Insurance Premiums at December 31?
a. so.
c. $$\$ 13.500$$.
b. $$\$ 4,500$$.
d. $$\$ 18,000$$.

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Manisha Sarker
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Problem 7

Working capital is calculated as:
a. current assets minus current liabilities.
b. total assets minus total liabilities.
c. long-term liabilities minus current liabilities.
d. Both (b) and (c).

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Problem 8

The current ratio is computed as:
a. total assets divided by total liabilities.
b. total assets divided by current liabilities.
c. current assets divided by total liabilities.
d. current assets divided by current liabilities.

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00:41

Problem 9

A contingent liability should be recorded in the accounts when:
a. it is probable the contingency will happen, but the amount cannot be reasonably estimated.
b. it is reasonably possible the contingency will happen, and the amount can be reasonably estimated.
c. it is probable the contingency will happen, and the amount can be reasonably estimated.
d. it is reasonably possible the contingency will happen, but the amount cannot be reasonably estimated.

Julian Wong
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Problem 10

At December 31, Hanes Company prepares an adjusting entry for a product warranty contract. Which of the following accounts is/are included in the entry?
a. Miscellaneous Expense.
b. Warranty Liability.
c. Repair Parts.
d. Both (a) and (b).

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01:44

Problem 11

Andy Manion carns $$\$ 14$$ 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:
a. $$\$ 560$$.
c. $$\$ 650$$.
b. $$\$ 630$$.
d. $$\$ 665$$.

Andrew Bassila
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Problem 12

When recording payroll:
a. gross earnings are recorded as salaries and wages payable.
b. net pay is recorded as salaries and wages expense.
c. payroll deductions are recorded as liabilities.
d. More than one of the above.

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Problem 13

Employer payroll taxes do not include:
a. federal unemployment taxes.
b. state unemployment taxes.
c. federal income taxes.
d. FCA taxes.

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Problem 14

FICA Taxes Payable was credited for $$\$ 7, \$ 00$$ in the entry when Antonio Company recorded payroll. When Antonio Company records employer's payroll taxes, FICA Taxes Payable should be credited for:
a. $$\mathrm{SO}$$.
c. $$\$ 15,000$$.
b. $$\$ 7,500$$.
d. Some other amount.

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Problem 15

The department that should pay the payroll is the:
a. timekeeping department.
b. human resources department.
c. payroll department.
d. treasurer's department.

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Problem 16

Which of the following is not an additional fringe benefit?
a. Post-retirement pensions.
c. Paid vacations.
b. Paid absences.
d. Salarics.

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