(Solution Document) 1.Which of the following is not a current liability?


1.Which of the following is not a current liability?

Accounts payable.

A note payable due in 2 years.

Current portion of long-term debt.

Sales tax payable

2.Liabilities are defined as:

Resources owed by an entity as a result of past transactions.

Resources owned by an entity as a result of past transactions.

Selling products and services to customers in the current period.

Costs of running the business in the current period.


3.On November 1, 2018, The Bagel Factory signed a $100,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on May 1, 2019. The Bagel Factory records the appropriate adjusting entry for the note on December 31, 2018. In recording the payment of the note plus accrued interest at maturity on May 1, 2019, The Bagel Factory would

Debit Interest Expense, $2,000.

Debit Interest Expense, $1,000.

Debit Interest Payable, $2,000.

Debit Interest Expense, $3,000.

4.Mike Gundy is a college football coach making a base salary of $2,400,000 a year ($200,000 per month). Employers are required to withhold a 6.2% Social Security tax up to a maximum base amount and a 1.45% Medicare tax with no maximum. Assuming the Social Security maximum base amount is $118,500, how much will be withheld during the year for the coach's Social Security and Medicare. 

$34,800. 

$42,147. 

$148,800.

None of these.

5.Deferred Revenues is a(n):

Liability account.

Asset account.

Stockholders' equity account.

Revenue account.

6.When a company collects sales tax from a customer, the event is recorded by:

A debit to Sales Tax Expense and a credit to Sales Tax Payable.

A debit to Cash and a credit to Sales Tax Payable.

A debit to Sales Tax Payable and a credit to Sales Tax Expense.

A debit to Sales Tax Payable and a credit to Cash.

7.Footnote disclosure is required for material potential losses when the loss is at least reasonably possible:

Only if the amount is known.

Only if the amount is known or reasonably estimable.

Unless the amount is not reasonably estimable.

Even if the amount is not reasonably estimable.

 







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