Reference no: EM132318885

Question

1.) A liability created for receiving cash for future services to be provided is termeda(n)

estimated warranty payable.

unearned revenue.

service revenue.

accrued liability.

2.) Which of the following is a characteristic of a current liability?

A current liability is due within one year or one operating cycle, whichever is longer.

A current liability must be of a known amount.

A current liability must be of an estimated amount.

Current liabilities are subtracted from long-term liabilities on the balance sheet.

3.) Which of the following is true of a contingent liability?

It is an actual liability that depends on a past event.

It is a potential liability that depends on a future event.

It is a court-imposed liability based on an officer's fraud as decided in a completed lawsuit.

It is an actual liability that is difficult to estimate.

4.) Face value of a note payable plus interest is called

maturity value.

proceeds.

principal.

face value.

5.) How is the valuation of current assets affected if the company follows IFRS?

Valuation is based on market adjustments.

Valuation is based on historical cost.

Assets are expensed immediately.

Valuation is based on LCM accounting.

6.) Robert Martin's gross earnings for the week ending on December 27 amount to $2,200. His cumulative gross earnings for the year up through his last pay date amount to $89,300. Using the table below, calculate the FICA tax deduction for the current pay period.

FICA Tax Rate 2% 4% 6% 8% 10%

Salary Amount $25,000- $50,000 | $50,001- $70,000 | $70,001- $85,000 | $85,001- $100,000 | $100,001- $175,000

$7,144

$7,200

$176

$56

7.) Many of the accounting standards in GAAP for current asset accounts are ________ with the international standards.

converted

accrued

accordant

converged

8.) Unearned subscription revenue appears on the balance sheet as a

long-term asset.

current liability or long-term liability.

current asset or long-term investment.

long-term investment.

9.) Interest payable is shown on the

balance sheet as a current liability.

balance sheet as a long-term liability.

income statement as an operating expense.

balance sheet as a current asset.

10.)Which of the following is an amount for products or services purchased on account?

accounts payable

accrued expense

estimated warranty payable

unearned revenue