Accounting 201 (Ch. 9-11) Test questions
Well Answered 2026-2027 Edition.
liability - Answer a probable future payment of assets or services that a company is presently
obligated to make as a result of past transactions or events; current or long-term
current liabilities - Answer short-term; liabilities due within one year (or the company's
operating cycle if longer); most are paid using current assets or by creating other current
liabilities (i.e. A/P, short-term N/P, W/P, etc.)
long-term liabilities - Answer obligations due after one year (i.e. long-term N/P, bonds payable,
etc.)
uncertainty in liabilities - Answer (1) whom to pay?
(2) when to pay?
(3) how much to pay?
answers are usually decided when a liability is incurred
known liabilities - Answer measurable obligations arising from agreements, contacts, or laws
(i.e. A/P, N/P, payroll obligations, sales taxes, unearned revenue, etc.)
accounts payable - Answer trade accounts payable; amounts owed to suppliers for products or
services purchased on credit
sales tax payable - Answer sales taxes are shown as a percent of the selling prices; seller
collects sales taxes from customers when sales occur and sends these collections to the
government; because sellers currently owe these collections to the government, it is a current
libility
unearned revenue - Answer deferred revenue; amounts received in advance from customers
for future products or services
short-term note payable - Answer a written promise to pay a specified amount on a stated
future date within one year; can be sold or transferred; most bear interest; can replace a A/P to
extend credit period
a bank requires a borrower to sign a note when ______________ - Answer making a loan
, principal - Answer face value
when note extends over two periods - Answer when a note is issued in one period but paid in
the next, interest expense is recorded in each period based on the number of days the note
extends over each period
payroll liabilities - Answer salaries and wages, employee benefits, and payroll taxes levied on
the employer
gross pay - Answer the total compensation an employee earns including wages, salaries,
commissions, bonuses, and any compensation earned before deductions such as taxes
wages - Answer refer to payments to employees at an hourly rate
salaries - Answer refer to payments to employees at a monthly or yearly rate
net pay - Answer take-home pay; gross pay minus all deductions
payroll deductions - Answer withholdings; amounts withheld from an employee's gross pay,
either required or voluntary
required deductions - Answer result from laws and included income taxes and Social Security
taxes
voluntary deductions - Answer at an employee's option, include pension and health
contributions, health and life insurance premiums, union dues, and donations
Federal Insurance Contributions Act (FICA) taxes - Answer separated into two groups
- SS taxes
- Medicare taxes
Social Security taxes - Answer withholdings to cover retirement, disability, and survivorship
Medicare taxes - Answer withholdings to cover medical benefits
Employee Income Tax - Answer most employers withhold federal income tax from each
employee's paycheck; the amount depends on the employee's income and the number of
withholding allowances the employee claims; allowances reduce taxes owed to the government
Well Answered 2026-2027 Edition.
liability - Answer a probable future payment of assets or services that a company is presently
obligated to make as a result of past transactions or events; current or long-term
current liabilities - Answer short-term; liabilities due within one year (or the company's
operating cycle if longer); most are paid using current assets or by creating other current
liabilities (i.e. A/P, short-term N/P, W/P, etc.)
long-term liabilities - Answer obligations due after one year (i.e. long-term N/P, bonds payable,
etc.)
uncertainty in liabilities - Answer (1) whom to pay?
(2) when to pay?
(3) how much to pay?
answers are usually decided when a liability is incurred
known liabilities - Answer measurable obligations arising from agreements, contacts, or laws
(i.e. A/P, N/P, payroll obligations, sales taxes, unearned revenue, etc.)
accounts payable - Answer trade accounts payable; amounts owed to suppliers for products or
services purchased on credit
sales tax payable - Answer sales taxes are shown as a percent of the selling prices; seller
collects sales taxes from customers when sales occur and sends these collections to the
government; because sellers currently owe these collections to the government, it is a current
libility
unearned revenue - Answer deferred revenue; amounts received in advance from customers
for future products or services
short-term note payable - Answer a written promise to pay a specified amount on a stated
future date within one year; can be sold or transferred; most bear interest; can replace a A/P to
extend credit period
a bank requires a borrower to sign a note when ______________ - Answer making a loan
, principal - Answer face value
when note extends over two periods - Answer when a note is issued in one period but paid in
the next, interest expense is recorded in each period based on the number of days the note
extends over each period
payroll liabilities - Answer salaries and wages, employee benefits, and payroll taxes levied on
the employer
gross pay - Answer the total compensation an employee earns including wages, salaries,
commissions, bonuses, and any compensation earned before deductions such as taxes
wages - Answer refer to payments to employees at an hourly rate
salaries - Answer refer to payments to employees at a monthly or yearly rate
net pay - Answer take-home pay; gross pay minus all deductions
payroll deductions - Answer withholdings; amounts withheld from an employee's gross pay,
either required or voluntary
required deductions - Answer result from laws and included income taxes and Social Security
taxes
voluntary deductions - Answer at an employee's option, include pension and health
contributions, health and life insurance premiums, union dues, and donations
Federal Insurance Contributions Act (FICA) taxes - Answer separated into two groups
- SS taxes
- Medicare taxes
Social Security taxes - Answer withholdings to cover retirement, disability, and survivorship
Medicare taxes - Answer withholdings to cover medical benefits
Employee Income Tax - Answer most employers withhold federal income tax from each
employee's paycheck; the amount depends on the employee's income and the number of
withholding allowances the employee claims; allowances reduce taxes owed to the government
