ACG3113 Test 2- With
Complete Solution
Which of these is not included in an employer's payroll tax expense? - Answer Federal
income taxes
Which of the following is not one of the requirements for accruing the cost of
compensated absences? - Answer Employee has been with the company for more than
two years
Oriole Company has a loss contingency. The company's legal council's opinion is that
the contingency is probable and that they estimate that the amount of the loss will be
$513000. What is the proper accounting treatment for this contingency? - Answer
$513000 should be accrued as a liability
A zero-interest bearing note is recorded at its present value - Answer True
Premium costs should be charged to expense in the year the product is sold - Answer
True
The journal entry to record the issuance of a zero-interest note with a face amount of
$5100 and a present value of $4580 will include - Answer a debit to Discount on Notes
Payable for $520
Which of the following is not an example of a current liability at December 31, 2026? -
Answer Bonds Payable, due 12/28
Current liabilities are defined as obligations whose liquidation is reasonably expected to
- Answer require the use of current assets or the creation of other current liabilities
Sunland Company issued a 90-day zero-interest-bearing note with a face value of $3017.
The present value of the note is $2894. The journal entry to record the issuance of the
note will include - Answer a debit to Cash for $2894
State and federal unemployment taxes are imposed on both employers and employees -
Answer False
A liability for compensated absences is - Answer accrued only if specific conditions are
met
Federal income taxes withheld by the employer on behalf of the employee as recorded
as - Answer current liabilities
Sandhill Company offers a cash rebate of $4 on each $9 package of protein powder sold
during 2024. Historically, 20% of their customers mail in the rebate form. During 2024,
, 3043000 packages are sold, and 295000 $4 rebates are mailed to customers. What is
the rebate expense and liability, respectively, shown on the company's 2024 financial
statements? - Answer $2434400; $1254400
Crane Inc. borrowed $403000 on April 1. The note requires interest at 12% and principal
to be paid in one year. How much interest is recognized for the period from April 1 to
December 31? - Answer $36270
Pharoah Surplus made cash sales during October of $376000. The sales are subject to a
6% sales tax that was also collected. Which of the following would be included in the
summary journal entry to reflect the sale transactions? - Answer Credit Sales Taxes
Payable for $22560
Oriole pays to a weekly payroll of $251000 that includes federal income taxes withheld
of $38500, FICA taxes withheld of $23970, and 401(k) withholdings of $27100. What is
the effect on assets and liabilities from this transaction? - Answer Assets decrease
$161430 and liabilities increase $89570
Purchased inventory for $80000 on account (perpetual) increase decrease or NE -
Answer A: I
L: I
SE: NE
NI: NE
Issued an $80,000 note payable in payment on account - Answer A: NE
L: NE
SE: NE
NI: NE
Recorded accrued interest on the note payable in payment on account - Answer A: NE
L: I
SE: D
NI: D
Borrowed $100000 from the bank by signing a 6-month, $112000, zero-interest-bearing
note - Answer A: I
L: I
SE: NE
NI: NE
Complete Solution
Which of these is not included in an employer's payroll tax expense? - Answer Federal
income taxes
Which of the following is not one of the requirements for accruing the cost of
compensated absences? - Answer Employee has been with the company for more than
two years
Oriole Company has a loss contingency. The company's legal council's opinion is that
the contingency is probable and that they estimate that the amount of the loss will be
$513000. What is the proper accounting treatment for this contingency? - Answer
$513000 should be accrued as a liability
A zero-interest bearing note is recorded at its present value - Answer True
Premium costs should be charged to expense in the year the product is sold - Answer
True
The journal entry to record the issuance of a zero-interest note with a face amount of
$5100 and a present value of $4580 will include - Answer a debit to Discount on Notes
Payable for $520
Which of the following is not an example of a current liability at December 31, 2026? -
Answer Bonds Payable, due 12/28
Current liabilities are defined as obligations whose liquidation is reasonably expected to
- Answer require the use of current assets or the creation of other current liabilities
Sunland Company issued a 90-day zero-interest-bearing note with a face value of $3017.
The present value of the note is $2894. The journal entry to record the issuance of the
note will include - Answer a debit to Cash for $2894
State and federal unemployment taxes are imposed on both employers and employees -
Answer False
A liability for compensated absences is - Answer accrued only if specific conditions are
met
Federal income taxes withheld by the employer on behalf of the employee as recorded
as - Answer current liabilities
Sandhill Company offers a cash rebate of $4 on each $9 package of protein powder sold
during 2024. Historically, 20% of their customers mail in the rebate form. During 2024,
, 3043000 packages are sold, and 295000 $4 rebates are mailed to customers. What is
the rebate expense and liability, respectively, shown on the company's 2024 financial
statements? - Answer $2434400; $1254400
Crane Inc. borrowed $403000 on April 1. The note requires interest at 12% and principal
to be paid in one year. How much interest is recognized for the period from April 1 to
December 31? - Answer $36270
Pharoah Surplus made cash sales during October of $376000. The sales are subject to a
6% sales tax that was also collected. Which of the following would be included in the
summary journal entry to reflect the sale transactions? - Answer Credit Sales Taxes
Payable for $22560
Oriole pays to a weekly payroll of $251000 that includes federal income taxes withheld
of $38500, FICA taxes withheld of $23970, and 401(k) withholdings of $27100. What is
the effect on assets and liabilities from this transaction? - Answer Assets decrease
$161430 and liabilities increase $89570
Purchased inventory for $80000 on account (perpetual) increase decrease or NE -
Answer A: I
L: I
SE: NE
NI: NE
Issued an $80,000 note payable in payment on account - Answer A: NE
L: NE
SE: NE
NI: NE
Recorded accrued interest on the note payable in payment on account - Answer A: NE
L: I
SE: D
NI: D
Borrowed $100000 from the bank by signing a 6-month, $112000, zero-interest-bearing
note - Answer A: I
L: I
SE: NE
NI: NE
