acct wk assignment

Description / Instructions: Practice for Week 2

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Question 1

The time period for classifying a liability as current is one year or the operating cycle, whichever is:

probable.

possible.

shorter.

longer.

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Question 2

To be classified as a current liability, a debt must be expected to be paid:

a. out of existing current assets.

b. by creating other current liabilities.

c. within 2 years.

d. both (a) and (b).

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Question 3

Maggie Sharrer Company borrows $88,500 on September 1, 2011, from Sandwich State Bank by signing an $88,500, 12%, one-year note. What is the accrued interest at December 31, 2011?

$10,620

$2,655

$3,540

$4,425

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Question 4

Becky Sherrick Company has total proceeds from sales of $4,515. If the proceeds include sales taxes of 5%, the amount to be credited to Sales is:

No correct answer given.

$4,000.

$4,289.25.

$4,300.

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Question 5

Employer payroll taxes do not include:

state unemployment taxes.

federal unemployment taxes.

federal income taxes.

FICA taxes.

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Question 6

Sensible Insurance Company collected a premium of $18,000 for a 1-year insurance policy on April 1. What amount should Sensible report as a current liability for Unearned Insurance Premiums at December 31?

$0

$13,500

$4,500

$18,000

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Question 7

The term used for bonds that are unsecured is:

debenture bonds.

bearer bonds.