Finance MCQs

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All of the following are reported as current liabilities except






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The relationship between current liabilities and current assets is






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Most companies pay current liabilities






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






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Liabilities are classified on the balance sheet as current or






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






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






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Which of the following is usually not an accrued liability?






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In most companies, current liabilities are paid within






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






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






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A note payable is in the form of






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The entry to record the proceeds upon issuing an interest-bearing note is






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Interest expense on an interest-bearing note is






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The entry to record the payment of an interest-bearing note at maturity after all interest expense has been recognized is






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Sales taxes collected by a retailer are recorded by






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Unearned Rental Revenue is






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Sales taxes collected by the retailer are recorded as a(n)






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The interest charged on a $100,000 note payable, at the rate of 8%, on a 90-day note would be






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The interest charged on a $100,000 note payable, at the rate of 6%, on a 60-day note would be






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The interest charged on a $50,000 note payable, at the rate of 8%, on a 3-month note would be






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The interest charged on a $50,000 note payable, at the rate of 6%, on a 2-month note would be






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On October 1, 2010, Pennington Company issued a $40,000, 10%, nine-month interest-bearing note. If the Pennington Company is preparing financial state...






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On October 1, 2010, Pennington Company issued a $40,000, 10%, nine-month interest-bearing note. Assuming interest was accrued in June 30, 2011, the en...






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Crawford Company has total proceeds (before segregation of sales taxes) from sales of $4,770. If the sales tax is 6%, the amount to be credited to the...






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Reliable Insurance Company collected a premium of $15,000 for a 1-year insurance policy on May 1. What amount should Reliable report as a current liab...






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A company receives $132, of which $12 is for sales tax. The journal entry to record the sale would include a






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A company receives $174, of which $14 is for sales tax. The journal entry to record the sale would include a






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A retail store credited the Sales account for the sales price and the amount of sales tax on sales. If the sales tax rate is 5% and the balance in the...






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On January 1, 2010, Howard Company, a calendar-year company, issued $600,000 of notes payable, of which $150,000 is due on January 1 for each of the n...






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On January 1, 2010, Donahue Company, a calendar-year company, issued $400,000 of notes payable, of which $100,000 is due on January 1 for each of the ...






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Layton Company does not ring up sales taxes separately on the cash register. Total receipts for October amounted to $18,900. If the sales tax rate is ...






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Valerie's Salon has total receipts for the month of $16,430 including sales taxes. If the sales tax rate is 6%, what are Valerie's sales for...






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






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A retail store credited the Sales account for the sales price and the amount of sales tax on sales. If the sales tax rate is 5% and the balance in the...






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Advances from customers are classified as a(n)






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The current portion of long-term debt should






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Sales taxes collected by a retailer are expenses






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Sales taxes collected by a retailer are reported as






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Which one of the following is shown first under current liabilities by many companies as a matter of custom?






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Working capital is






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The current ratio is






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Hardy Company has current assets of $90,000, current liabilities of $100,000, long-term, assets of $180,000 and long-term liabilities of $80,000. Hard...






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Madden Electric began operations in 2010 and provides a one year warranty on the products it sells. They estimate that 10,000 of the 200,000 units sol...






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Lincoln Company sells 600 units of a product that has a one-year warranty on parts. The average cost of honoring one warranty contract is $50. During ...






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A contingent liability need only be disclosed in the financial statement notes when the likelihood of the contingency is






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If a contingent liability is reasonably estimable and it is reasonably possible that the contingency will occur, the contingent liability






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The accounting for warranty cost is based on the matching principle, which requires that the estimated cost of honoring warranty contracts should be r...






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If a liability is dependent on a future event, it is called a






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Current maturities of long-term debt






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A contingency that is remote






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The accounting for warranty costs is based on the






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Warranty expenses are reported on the income statement as






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Shaw Company sells 2,000 units of its product for $500 each. The selling price includes a one-year warranty on parts. It is expected that 3% of the un...






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Shaw Company sells 2,000 units of its product for $500 each. The selling price includes a one-year warranty on parts. It is expected that 3% of the un...






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Which of the following items would not be identified if a contingent liability were disclosed in a financial statement footnote?






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Disclosure of a contingent liability is usually made






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Current liabilities generally appear






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The total compensation earned by an employee is called






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Which one of the following payroll taxes does not result in a payroll tax expense for the employer?






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Assuming a FICA tax rate of 8% on the first $100,000 in wages, and a federal income tax rate of 20% on all wages, what would be an employee's net...






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Most companies involved in interstate commerce are required to compute overtime at






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Jan Goll has worked 44 hours this week. She worked in excess of 8 hours each day. Her regular hourly wage is $15 per hour. What are Jan's gross w...






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FICA taxes do not provide workers with






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Employee payroll deductions include each of the following except






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The journal entry to record the payroll for a period will include a credit to Wages and Salaries Payable for the gross






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The amount of income taxes withheld from employees is dependent on each of the following except the






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The periodicity assumption assumes that:






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One of the accounting concepts upon which adjustments for prepayments and accruals are based is:






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An accounting time period that is one year in length is called:






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Adjustments would not be necessary if financial statements were prepared to reflect net income from:






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Management usually wants ________ financial statements and the IRS requires all businesses to file _________ tax returns.






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Expenses are recognized when:






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Which of the following is not generally an accounting time period?






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The revenue recognition principle dictates that revenue should be recognized in the accounting records:






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In a service-type business, revenue is recognized:






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The expense recognition principle matches:






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Otto's Tune-Up Shop follows the revenue recognition principle. Otto services a car on August 31. The customer picks up the vehicle on September 1...






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A company spends $20 million dollars for an office building. Over what period should the cost be written off?






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The expense recognition principle states that expenses should be matched with revenues. Another way of stating the principle is to say that:






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Which principle dictates that efforts (expenses) be recorded with accomplishments (revenues)?






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A flower shop makes a large sale for $1,000 on November 30. The customer is sent a statement on December 5 and a check is received on December 10. The...






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A furniture factory's employees work overtime to finish an order that is sold on January 31. The office sends a statement to the customer in earl...






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Which is not an application of revenue recognition?






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Why do generally accepted accounting principles require the application of the revenue recognition principle?






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On April 1, 2013, nPropel Corporation paid $48,000 cash for equipment that will be used in business operations. The equipment will be used for four ye...






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Under the cash basis of accounting:






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Under the accrual basis of accounting:






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Using accrual accounting, expenses are recorded and reported only:






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A small company may be able to justify using a cash basis of accounting if they have:






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Which statement is correct?






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La More Company had the following transactions during 2013: • Sales of $4,500 on account • Collected $2,000 for services to be performed in 2014...






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La More Company had the following transactions during 2013. • Sales of $4,500 on account • Collected $2,000 for services to be performed in 2014...






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Wang Company had the following transactions during 2013: • Sales of $10,800 on account • Collected $4,800 for services to be performed in 2014 ...






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Wang Company had the following transactions during 2013: • Sales of $10,800 on account • Collected $4,800 for services to be performed in 2014 ...






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Given the data below for a firm in its first year of operation, determine net income under the cash basis of accounting. Revenue earned $16,000 Acco...






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Given the data below for a firm in its first year of operation, determine net income under the accrual basis of accounting. Revenue earned $16,000 A...






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Given the data below for a firm in its first year of operation, determine net income under the cash basis of accounting. Cash received from customers...






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Under the cash basis of accounting, an amount received from a customer in advance of providing the services would be reported as a(n):






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Which of the following would be unethical?