Reference no: EM132315945

Question

1) Which of the following statements about the? times-interest-earned ratio is? true?

A.The? times-interest-earned ratio is also called the? interest-coverage ratio.

B.The? times-interest-earned ratio is calculated by dividing gross income by interest expense.

C.A lower ratio indicates a higher debt paying ability.

D.Debt reduction leads to an increase in interest expense.

2) Investors use the? times-interest-earned ratio to evaluate a? company's ability to pay interest expense.

True

False

3) Which of the following would be included in the journal entry to record the payment of sales tax? payable?

A.a debit to Sales Tax Expense

B.a credit to Sales Tax Payable

C.a debit to Sales Tax Payable

D.a credit to Sales Tax Expense

4) The old? age, survivors, and disability insurance component of FICA tax is imposed on the entire amount of an individual? employee's earnings.

True

False

5) ?Keith, an employee of? Sunbeam, Inc., has gross salary for May of? $15,000. The entire amount is under the OASDI limit of? $118,500 and thus subject to FICA. He is also subject to federal income tax at a rate of? 20%. Which of the following is a part of the journal entry to record the disbursement of his net? pay? (Assume a FICA-OASDI Tax of? 6.2% and FICA-Medicare Tax of? 1.45%. Round the final answer to the nearest? dollar.)

A.credit to Cash for? $10,852.50

B.debit to Employee Income Tax Payable of? $10,852.50

C.debit to Cash for? $10,852.50

D.debit to FICA Tax Payable of? $10,852.50

6) ?Keith, an employee of? Sunbeam, Inc., has gross salary for May of? $15,000. The entire amount is under the OASDI limit of? $118,500 and thus subject to FICA. He is also subject to federal income tax at a rate of? 20%. Which of the following is a part of the journal entry to record the disbursement of his net? pay? (Assume a FICA-OASDI Tax of? 6.2% and FICA-Medicare Tax of? 1.45%. Round the final answer to the nearest? dollar.)

A.credit to Cash for? $10,852.50

B.debit to Employee Income Tax Payable of? $10,852.50

C.debit to Cash for? $10,852.50

D.debit to FICA Tax Payable of? $10,852.50

8) All Things Digital Company starts the year with a credit balance of $2,600 in its Estimated Warranty Payable account. During the? year, there were $218,000in sales and $4,500 in warranty repair payments. All Things Digital estimates warranty expense at 2?% of sales. At the end of the? year, what is the balance in the Estimated Warranty Payable? account?

A.$2,600 debit

B.$2,460 credit

C.$4,360 debit

D.$4,500 credit

9) Peter earns $18.50 per hour for straight time ?(40 ?hours), and the company pays him time-and-a-half for overtime. He worked 43 hours at his job during the first week of March 2018. What was? Peter's gross pay for the? week?

A.$ 800.00

B.$ 795.50

C.$823.25

D.$ 1,193.25

10) Dan Jones and Pat Smith are two employees of Lone Star Company. In January? 2019, Dan's gross pay was $5,500?, and? Pat's gross pay was $7,900. All earnings are subject to FICA-OASDI Tax of 6.2?% and FICA-Medicare Tax of 1.45?%. Which of the following would be included in the entry to record the payroll tax expense to be paid out by Lone Star Company for? January?

A.a debit to FICA-OASDI Taxes Payable for $ 194.30

B.a debit to Salaries Payable to employees for $ 194.30

C.a credit to Salaries Expense for $ 194.30

D.a credit to FICA-Medicare Taxes Payable for $ 194.30

11) Which of the following is an important internal control over? payroll?

A.separating the duties of the disbursement of paychecks from the recording of payroll transactions in the ledger

B.separating the duties of approving invoices from signing disbursement checks

C.separating the duties of safeguarding property from? record-keeping of property

D.separating the duties of cash disbursement from bank reconciliations

12) A contingency was evaluated at? year-end and considered to have a remote possibility of becoming an actual liability. If this is not reported on the balance sheet or in the notes to the financial? statements, it could be considered a violation of generally accepted accounting principles.

True

False

13) A contingency was evaluated at? year-end and considered to have a remote possibility of becoming an actual liability. If this is not reported on the balance sheet or in the notes to the financial? statements, it could be considered a violation of generally accepted accounting principles.

True

False

14) A company sells $180,000 ?(sales price) of goods and collects sales tax of 8?%. What current liability does the sale? create?

A.Sales tax payable of $14,400

B.Sales revenue of $194,400

C.Unearned revenue of $14,400

D.?None; the company collected cash up front.

15) State unemployment compensation tax? (SUTA) is paid by the employer and is not deducted from an? employee's gross earnings.

True

False

16) On April? 1, 2019, Orbit Services received $10,200 in advance of performing the services from a customer for three months of service - ?April, May and June. What would be the journal entry to adjust the accounts at the end of? May? (Do not round any intermediate? calculations, and round your final answer to the nearest? dollar.)

A.Debit Unearned Revenue $6,800?, and credit Service Revenue $6,800.

B.Debit Service Revenue $3,400?, and credit Unearned Revenue $3,400.

C.Debit Unearned Revenue $10,200?, and credit Service Revenue $10,200.

D.Debit Service Revenue $6,800?, and credit Accounts Receivable $6,800.