MGMT 200 ACTUAL FINAL PRACTICE EXAM |110 COMPLETE AND GRADED
QUESTIONS AND ANSWERS 2026 LATEST UPDATED | 100% GRADED CORRECT | 100%
GUARANTEED TO PASS | GET A+
1. Which of the following represents a characteristic of a liability?
A probable future sacrifice of economic benefits.
Arising from present obligations to other entities.
Resulting from past transactions or events.: A probable future sacrifice of
economic benefits.
Arising from present obligations to other entities.
Resulting from past transactions or events.
All of these are characteristics of a liability.
2. In most cases, current liabilities are payable within ____ year(s), and long-
term liabilities are payable more than ____ year(s) from now.: one; one 3. Which
of the following is not a current liability?
,Current portion of long-term debt.
Deferred revenue with services to be provided to a customer in nine months.
Notes payable due in six months.
An unused line of credit.: An unused line of credit.
4. Which of the following is not a necessary characteristic of a liability?
t results from past transactions or events.
It must be payable in cash.
It represents a probable, future sacrifice of economic benefits.
It arises from present obligations to other entities.: It must be payable in cash.
5. We record interest expense on a note payable in the period in which: We
incur interest.
6. Which of the following is paid by both the employee and the employer?
FICA taxes.
,federal unemployment taxes.
Personal income taxes.
State unemployment taxes.: FICA taxes.
7. Federal and state income taxes withheld by employers from their
employees' payroll are initially recorded with a credit to a(n):: Liability.
8. When a customer pays in advance for a product or service, the advance
payment received by the company is recorded as:: A debit to an asset and a
credit to a liability account.
9. A contingent liability that is probable and can be reasonably estimated must
be: Recorded.
10. Suppose that Neuman Exploration Tours has filed a lawsuit against a
competitor for an alleged trademark violation. At the end of the year,
Neuman's attorney estimates that the company will likely win the lawsuit
and be awarded between $1.5 and $2 million, with the most likely amount
being $1.8 million.
, How much should Neuman record as a gain?: $0
11. Aviation Systems sells its products with a three-year manufacturing
warranty. The company's sales revenue is $600,000. Based on prior
experience, the company estimates that warranty costs are 5% of sales
revenue. Actual warranty costs related to these sales were $5,000 during the
year. How much is the warranty expense reported in the income statement
this year?: $30,000.
12. Management can estimate the amount of loss that will occur due to
litigation against the company. If the likelihood of loss is reasonably likely, a
contingent liability should be:: Disclosed but not reported as a liability.
13. Allied Partners filed suit against Big Sky, Incorporated, seeking damages
for patent infringement. Big Sky's legal counsel believes it is probable that
Big Sky will settle the lawsuit for an estimated amount in the range of
$500,000 to $700,000, with all amounts in the range considered equally
likely. How should
QUESTIONS AND ANSWERS 2026 LATEST UPDATED | 100% GRADED CORRECT | 100%
GUARANTEED TO PASS | GET A+
1. Which of the following represents a characteristic of a liability?
A probable future sacrifice of economic benefits.
Arising from present obligations to other entities.
Resulting from past transactions or events.: A probable future sacrifice of
economic benefits.
Arising from present obligations to other entities.
Resulting from past transactions or events.
All of these are characteristics of a liability.
2. In most cases, current liabilities are payable within ____ year(s), and long-
term liabilities are payable more than ____ year(s) from now.: one; one 3. Which
of the following is not a current liability?
,Current portion of long-term debt.
Deferred revenue with services to be provided to a customer in nine months.
Notes payable due in six months.
An unused line of credit.: An unused line of credit.
4. Which of the following is not a necessary characteristic of a liability?
t results from past transactions or events.
It must be payable in cash.
It represents a probable, future sacrifice of economic benefits.
It arises from present obligations to other entities.: It must be payable in cash.
5. We record interest expense on a note payable in the period in which: We
incur interest.
6. Which of the following is paid by both the employee and the employer?
FICA taxes.
,federal unemployment taxes.
Personal income taxes.
State unemployment taxes.: FICA taxes.
7. Federal and state income taxes withheld by employers from their
employees' payroll are initially recorded with a credit to a(n):: Liability.
8. When a customer pays in advance for a product or service, the advance
payment received by the company is recorded as:: A debit to an asset and a
credit to a liability account.
9. A contingent liability that is probable and can be reasonably estimated must
be: Recorded.
10. Suppose that Neuman Exploration Tours has filed a lawsuit against a
competitor for an alleged trademark violation. At the end of the year,
Neuman's attorney estimates that the company will likely win the lawsuit
and be awarded between $1.5 and $2 million, with the most likely amount
being $1.8 million.
, How much should Neuman record as a gain?: $0
11. Aviation Systems sells its products with a three-year manufacturing
warranty. The company's sales revenue is $600,000. Based on prior
experience, the company estimates that warranty costs are 5% of sales
revenue. Actual warranty costs related to these sales were $5,000 during the
year. How much is the warranty expense reported in the income statement
this year?: $30,000.
12. Management can estimate the amount of loss that will occur due to
litigation against the company. If the likelihood of loss is reasonably likely, a
contingent liability should be:: Disclosed but not reported as a liability.
13. Allied Partners filed suit against Big Sky, Incorporated, seeking damages
for patent infringement. Big Sky's legal counsel believes it is probable that
Big Sky will settle the lawsuit for an estimated amount in the range of
$500,000 to $700,000, with all amounts in the range considered equally
likely. How should
