1. Which of the following is not true regarding taxes deducted from an employee’s earning?
A. these items are expenses to the employer
B. these items are liabilities that must the paid to federal and state governments
C. these items are credited within the entry to record wage or salary expense
D. The employer servers as an agent for the governments for collecting these taxes.
2. when the right to purchase stock in the future is used as a substitute for a cash bonus, the company is granting
A. Post-retirement benefits
B. Compensated absences
C. Stock options
D. Post-employment benefits
3. the accounting term for an uncertain circumstance involving a potential gain or loss that will NOT be resolved until the future is a (n)
A. extraordinary item
D. deferred liability
4. Which of the following is the appropriate disclosure in the financial statements for a contingent gain?
A. estimate the amount of the gain and make the appropriate journal entry
B. Provide detailed disclosure of the gain in the notes
C. No disclosure until the future event resolves itself.
D. None of these are correct
5. Which of the following is not a consideration in classifying a lease?
A. Value of an asset on the lessor’s books
B. Economic life of the asset
C. Present value of the lease payments
D. Whether the lease is cancelable
6. A non-cancelable lease should be recorded as capital lease if
A. The present value of the lease payments is 75% or more of fair market value of the leased asset
B. Tittle to the asset transfers to the lessee by the end of the lease term
C. The lessee is given an option to purchase the asset at its fair market value
D. Any one of these criterion are met
7. The cost assigned to the individual assets acquired in a basket purchase is based on their relative.
A. Historical costs
B. Fair market value
C. Book values
D. Depreciable costs
8. Which of the following assets is not usually depreciated, depleted, or amortized?
B. Mineral deposits
9. Depreciation can best be described as a method of
A. Accumulating funds for the replacement of assets
B. Reducing the carrying cost of assets to current market value
C. Deriving tax benefits
D. Allocating the costs of assets over their useful lives
10. Which of the following statements is False?
A. A liability is an item that involves a future transfer of resources
B. A liability is an item that is measurable in monetary items
C. A liability is an item that represents an obligation of an enterprise
D. A liability is an item that must be paid in cash
11. Which of the following is LEAST likely to be classified as a long-term liability?
A. Salaries payable
B. Mortgage payable
C. Lease obligations
D. Deferred income taxes payable
12. Which of the following is LEAST likely to be classified as a current liability?
A. Wages payable
B. Income taxes Payable
C. Unemployment taxes payable
D. Bonds payable
13. At the end of each year, a mortgage is report under how many sections of the balance sheet?
14. Interest expense on a 6-month, 8 percent, $6,000 note payable would be approximately
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