A/R
Plant Assets, Natural Resources, and Intangibles I
Liabilities
Payroll
Plant Assets, Natural Resources, and Intangibles II
100
Sellers allow customers to use credit cards for all of the following reasons except: A. To be able to charge more due to fees and interest. B. To lessen the risk of extending credit to customers who cannot pay. C. To speed up receipt of cash from the credit sale. D. To increase total sales volume. E. To avoid having to evaluate a customer's credit standing for each sale.
What is To be able to charge more due to fees and interest.
100
Wickland Company installs a manufacturing machine in its production facility at the beginning of the year at a cost of $87,000. The machine's useful life is estimated to be 5 years, or 400,000 units of product, with a $7,000 salvage value. During its second year, the machine produces 84,500 units of product. Determine the machines' second year depreciation under the double-declining-balance method.
What is $20,880. Depreciation Expense = Book Value * Double Straight-line Rate Depreciation Expense = $87,000 * (2 * 20%) = $34,800 (Depreciation Expense, year 1) Depreciation Expense = Book Value * Double Straight-line Rate Depreciation Expense = ($87,000 - $34,800) * (2 * 20%) = $20,880 (Deprec. Exp, year 2)
100
All of the following statements regarding uncertainty in liabilities are true except: A. Liabilities can involve uncertainty in whom to pay. B. A company can create a liability with a known amount even when the holder of the note may not be known until the maturity date. C. A company can have an obligation of a known amount to a known creditor but not know when it must be paid. D. A company only records liabilities when it knows whom to pay, when to pay, and how much to pay. E. A company can be aware of an obligation but not know how much will be required to settle it.
What is A company only records liabilities when it knows whom to pay, when to pay, and how much to pay.
100
Gross pay is: A. Take-home pay. B. Total compensation earned by an employee before any deductions. C. Salaries after taxes are deducted. D. Deductions withheld by an employer. E. The amount of the paycheck.
What is total compensation earned by an employee before any deductions.
100
A company purchased a tract of land for its natural resources at a cost of $1,000,000. It expects to harvest 5,000,000 board feet of timber from this land. The salvage value of the land is expected to be $200,000. The depletion expense per board foot of timber is:
What is $0.16.
200
A promissory note received from a customer in exchange for an account receivable is recorded by the payee as:
What is A note receivable
200
Minor Company installs a machine in its factory at the beginning of the year at a cost of $135,000. The machine's useful life is estimated to be 5 years, or 300,000 units of product, with a $15,000 salvage value. During its first year, the machine produces 64,500 units of product. Determine the machines' first year depreciation under the units-of-production method.
What is $25,800. Depreciation Expense = [(Cost - Salvage Value)/Estimated Useful Life (in units)] * Production of Units Depreciation Expense = [($135,000 - $15,000)/300,000] * 64,500 = $25,800
200
The difference between the amount received from issuing a note payable and the amount repaid at maturity is referred to as:
What is Interest.
200
FICA taxes include:
What are Social Security and Medicare taxes.
200
Owning a patent: A. Gives the owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 70 years. B. Gives the owner exclusive rights to manufacture and sell a patented item or to use a process for 20 years. C. Gives its owner an exclusive right to manufacture and sell a device or to use a process for 50 years. D. Indicates that the value of a company exceeds the fair market value of a company's net assets if purchased separately. E. Gives its owner the exclusive right to publish and sell a musical or literary work during the life of the creator plus 17 years.
What is Gives the owner exclusive rights to manufacture and sell a patented item or to use a process for 20 years.
300
The maturity date of a note receivable:
What is the day the note is due to be repaid.
300
Bering Rock acquires a granite quarry at a cost of $590,000, which is estimated to contain 200,000 tons of granite and is expected to take 6 years to remove. What journal entry would be needed to record the expense for the first year assuming 38,000 tons were removed?
What is Debit Depletion Expense $112,100; credit Accumulated Depletion $112,100.
300
On December 1, Victoria Company signed a 90-day, 6% note payable, with a face value of $15,000. What amount of interest expense is accrued at December 31 on the note?
What is $75
300
The amount of federal income taxes withheld from an employee's paycheck is determined by:
What are current earnings for the pay period and number of withholding allowances the employee claims.
300
A company purchased equipment valued at $66,000. It traded in old equipment for a $9,000 trade-in allowance and the company paid $57,000 cash with the trade-in. The old equipment cost $44,000 and had accumulated depreciation of $36,000. This transaction has commercial substance. What is the recorded value of the new equipment?
What is E. $66,000. Market value of new equipment $66,000 Cost of old machine $44,000 Accumulated depreciation (36,000) Book Value of the old equipment $8,000 Plus cash paid in exchange 57,000 65,000 Gain on exchange $1,000 Since the transaction has commercial substance, the $1,000 gain is recognized and the new machine is recorded at its market value of $66,000.
400
A 90-day note issued on April 10 matures on:
What is July 9.
400
Ngu owns equipment that cost $93,500 with accumulated depreciation of $64,000. Ngu asks $35,000 for the equipment but sells the equipment for $33,000. Compute the amount of gain or loss on the sale.
What is $3,500 gain.
400
On November 1, Alan Company signed a 120-day, 8% note payable, with a face value of $9,000. Alan made the appropriate year-end accrual. What is the journal entry as of March 1 to record the payment of the note assuming no reversing entry was made?
What is Debit Notes Payable $9,000; debit Interest Payable $120; debit Interest Expense $120; credit Cash $9,240.
400
An employee earned $37,000 during the year working for an employer when the maximum limit for Social Security was $117,000. The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%. The employee's annual FICA taxes amount is:
What is $2,830.50. FICA Taxes = Wages * (FICA tax rate + Medicare tax rate) FICA Taxes = $37,000 * (0.062 + 0.0145); FICA Taxes = $2,830.50
400
Granite Company purchased a machine costing $120,000, terms 1/10, n/30. The machine was shipped FOB shipping point and freight charges were $2,000. The machine requires special mounting and wiring connections costing $10,000. When installing the machine, $1,300 in damages occurred. Compute the cost recorded for this machine assuming Granite paid within the discount period.
What is $130,800.
500
A company borrowed $10,000 by signing a 180-day promissory note at 9%. The maturity value of the note is:
What is $10,450
500
Gaston owns equipment that cost $90,500 with accumulated depreciation of $61,000. Gaston asks $30,000 for the equipment but sells the equipment for $26,000. Which of the following would not be part of the journal entry to record the disposal of the equipment? A. Debit Accumulated Depreciation $61,000. B. Credit Equipment $90,500. C. Debit Loss on Disposal of Equipment $3,500. D. Credit Gain on Disposal of Equipment $3,500. E. Debit Cash $6,000.
What is Debit Loss on Disposal of Equipment $3,500.
500
Employers' responsibilities for payroll do not include: A. Providing each employee with an annual report of his or her wages subject to FICA and federal income taxes along with the amount of these taxes withheld. B. Filing Form 941, the Employer's Quarterly Federal Tax Return. C. Filing Form 940, the Annual Federal Unemployment Tax Return. D. Maintaining individual earnings records for each employee. E. Recording an expense for the employee Federal Income Tax withholding.
What is recording an expense for the employee Federal Income Tax withholding.
500
Trey Morgan is an employee who is paid monthly. For the month of January of the current year, he earned a total of $4,538. The FICA tax for social security is 6.2% and the FICA tax rate for Medicare is 1.45% for both the employee and the employer. The amount of federal income tax withheld from his earnings was $680.70. His net pay for the month is:
What is $3,510.14 Net Pay = Gross Pay - Federal Income Tax - FICA-SS Tax - FICA-Medicare Tax Net Pay = $4,538.00 - $680.70 - $281.36* - $65.80** = $3,510.14 *FICA-SS Tax $4,538.00 * 0.062 = $281.36 **FICA-Medicare Tax $4,538.00 * 0.0145 = $65.80
500
Wickland Company installs a manufacturing machine in its production facility at the beginning of the year at a cost of $87,000. The machine's useful life is estimated to be 5 years, or 400,000 units of product, with a $7,000 salvage value. During its second year, the machine produces 84,500 units of product. What journal entry would be needed to record the machines' second year depreciation under the units-of-production method?
What is Debit Depreciation Expense $16,900; credit Accumulated Depreciation $16,900.
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