31.All of the following are reported as current liabilitiesexcept

a.accounts payable.

b.bonds payable.

c.notes payable.

d.unearned revenues.

32.The relationship between current liabilities and current assets is

a.useful in determining income.

b.useful in evaluating a company's liquidity.

c.called the matching principle.

d.useful in determining the amount of a company's Non-current debt.

33.Most companies pay current liabilities

a.out of current assets.

b.by issuing interest-bearing notes payable.

c.by issuing stock.

d.by creating noncurrent liabilities.

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

a.within one year or the operating cycle, whichever is longer.

b.between 6 months and 18 months.

c.out of currently recognized revenues.

d.out of cash currently on hand.

36.From a liquidity standpoint, it is more desirable for a company to have current

a.assets equal current liabilities.

b.liabilities exceed current assets.

c.assets exceed current liabilities.

d.liabilities exceed Non-current liabilities.

37.The relationship of current assets to current liabilities is used in evaluating a company's

a.operating cycle.

b.revenue-producing ability.

c.short-term debt paying ability.

d.long-range solvency.

38.Which of the following is usuallynotan accrued liability?

a.Interest payable

b.Wages payable

c.Taxes payable

d.Notes payable

39.In most companies, current liabilities are paid within

a.one year through the creation of other current liabilities.

b.the operating cycle through the creation of other current liabilities.

c.one year or the operating cycle out of current assets.

d.the operating cycle out of current assets.

Ppt no 7

40.The entry to record the issuance of an interest-bearing note credits Notes Payable for the note's

a.maturity value.

b.market value.

c.face value.

d.cash realizable value.

41.With an interest-bearing note, the amount of assets received upon issuance of the note is generally

a.equal to the note's face value.

b.greater than the note's face value.

c.less than the note's face value.

d.equal to the note's maturity value.

42.A note payable is in the form of

a.a contingency that is reasonably likely to occur.

b.a written promissory note.

c.an oral agreement.

d.a standing agreement.

44.Watunga Bank agrees to lend Hoffman Granite Company 600,000 on January 1. Hoffman Granite Company signs a 600,000, 8%, 9-month note. The entry made by Hoffman Granite on January 1 to record the proceeds and issuance of the note is

a.Interest Expense36,000

Cash.564,000

Notes Payable600,000

b.Cash600,000

Notes Payable600,000

c.Cash600,000

Interest Expense36,000

Notes Payable636,000

d.Cash600,000

Interest Expense36,000

Notes Payable600,000

Interest Payable36,000

45.Watunga Bank agrees to lend Hoffman Granite Company 600,000 on January 1. Hoffman Granite Company signs a 600,000, 8%, 9-month note. What is the adjusting entry required if Hoffman Granite Company prepares financial statements on June 30?

a.Interest Expense24,000

Interest Payable24,000

b.Interest Expense24,000

Cash24,000

c.Interest Payable24,000

Cash24,000

d.Interest Payable24,000

Interest Expense24,000

46.Watunga Bank agrees to lend Hoffman Granite Company 600,000 on January 1. Hoffman Granite Company signs a 600,000, 8%, 9-month note. What entry will Hoffman Granite make to pay off the note and interest at maturity assuming that interest has been accrued to September 30?

a.Notes Payable636,000

Cash636,000

b.Notes Payable600,000

Interest Payable36,000

Cash636,000

c.Interest Expense36,000

Notes Payable600,000

Cash636,000

d.Interest Payable24,000

Notes Payable600,000

Interest Expense12,000

Cash636,000

75.The amount of sales tax collected by a retail store when making sales is

a.a miscellaneous revenue for the store.

b.a current liability.

c.not recorded because it is a tax paid by the customer.

d.recorded as an operating expense.

76.A retail store doesnotsegregate sales and the amount of sales tax on sales. If the sales tax rate is 5% and the register total amounted to HK$136,500, what is the amount of the sales taxes owed to the taxing agency?

a.HK$130,000

b.HK$136,500

c.HK$6,825

d.HK$6,500

[Tot. sales - (Tot. sales (1 + Sales tax %) = Sales taxes]

78.The current portion of long-term debt should

a.be paid immediately.

b.be reclassified as a current liability.

c.be classified as a noncurrent liability.

d.not be separated from the long-term portion of debt.

79.Sales taxes collected by a retailer are expenses

a.of the retailer.

b.of the customers.

c.of the government.

d.that are not recognized by the retailer until they are submitted to the government.

81.Mast General Store has total receipts for the month of 45,990 including sales taxes. If the sales tax rate is 5%, what are Mast's sales for the month?

a.43,691

b.43,800

c.48,290

d.It cannot be determined.

Solution: 45,990/(1+.05)=

[Tot. sales (1 + Sales tax %) = Sales]

90.Working capital is

a.current assets plus current liabilities.

b.current assets minus current liabilities.

c.current assets divided by current liabilities.

d.current assets multiplied by current liabilities.

91.The current ratio is

a.current assets plus current liabilities.

b.current assets minus current liabilities.

c.current assets divided by current liabilities.

d.current assets multiplied by current liabilities.

Ppt no 38, Ppt no 41

92.Monkee's Company has current assets of 45,000, current liabilities of 50,000, long-term assets of 90,000 and non-current liabilities of 40,000. Monkee's Company's working capital and its current ratio are:

a.45,000 and .90:1.

b.5,000 and 1.50:1.

c.5,000 and .90:1.

d.(5,000) and .90:1.

Ppt no 38 dan no 41

Solution: 45,000-50,000=(5,000); 45,000/50,000=.90 : 1

[Curent assets - Current liabl. = Working cap.); (Current assets Current liabl. = Current ratio)]

93.OMRON Lmtbeganlaunching a new product"Omron Forehead Thermometer" in2020 and provides a one year warranty on the products it sells. They estimate that 20,000 of the 400,000 units sold in 2020 will be returned for repairs and that these repairs will cost $8 per unit. The cost of repairing 16,000 units presented for service in 2020 was $128,000.OMRONshould report

a.warranty expense of $32,000 for 2020.

b.warranty expense of $160,000 for 2020.

c.warranty liability of $160,000 on December 31, 2020.

d.no warranty obligation on December

31, 2020, since this is only a provision.

Solution: (20,000-16,000)$8=$32,000 + $128,000 = $_______

[(Est. units - Actual units) x Cost per unit = Warranty expense + Exp. incurred]

95.The accounting for warranty cost is based on the expense recognition principle, which requires that the estimated cost of honoring warranty contracts should be recognized as an expense

a.when the product is brought in for repairs.

b.in the period in which the product was sold.

c.at the end of the warranty period.

d.only if the repairs are expected to be made within one year.

Pptno32

96.Common types of provisions are obligations to each of the following except

a.environmental damage.

b.litigation expense.

c.warranty expense.

d.payroll tax expense.

Pptno31

98.In accounting for a provision, the term probable is defined as

a.a probability of occurrence greater than 75%.

b.reasonably possible or greater.

c.more likely than not to occur.

d.None of these answer choices are correct.

Ppt no 31,Ppt no 32

105.Employee payroll deductions include each of the followingexcept

a.union dues.

b.income taxes.

c.Social Security taxes.

d.All of these are payroll deductions.

Ppt no 20

111.A provision is recorded when the likelihood of occurrence is

a.remote.

b.reasonably possible.

c.probable.

d.nil or zero.