Question 1

Payments of FUTA are made quarterly to a federal depository bank if the total amount due exceeds $1,000.

Accepted Answer

Payments of FUTA are made quarterly if the accumulated tax exceeds $500, not $1,000.

Question 2

A corporation has a $42,000 credit balance in the Income Tax Payable account.Period-end information shows that the actual liability is $50,000.The company should record an entry to debit Income Tax Expense for $8,000 and credit Income Taxes Payable for $8,000.

Accepted Answer

Since the actual liability is higher than the credit balance in the Income Tax Payable account, the company needs to increase the liability by debiting Income Tax Expense and crediting Income Taxes Payable. The difference between the two amounts, which is $8,000, is the amount of the adjustment entry. Therefore, the answer is A.

Question 3

Payroll is usually paid with a check or with the use of an electronic funds transfer.

Accepted Answer

Payroll can be paid with a check or with the use of an electronic funds transfer (EFT) directly into an employee's bank account.

Question 4

Employers must keep certain payroll records,including individual earnings reports for each employee.

Accepted Answer

This is required by law to ensure accurate payment of wages and compliance with tax laws.

Question 5

Employers can use a wage bracket withholding table to compute federal income taxes withheld from each employee's gross pay.

Accepted Answer

This is true. Wage bracket withholding tables provide employers with a simple way to determine how much federal income tax to withhold from an employee's paycheck based on their income and filing status.

Question 6

Federal depository banks are authorized to accept deposits of amounts payable to the federal government.

Accepted Answer

Federal depository banks, such as the Federal Reserve Banks, are authorized to accept deposits of amounts payable to the federal government, such as taxes or government fees.

Question 7

Vacation benefits are a form of estimated liabilities for an employer.

Accepted Answer

Vacation benefits are typically accrued by employees over time and will eventually need to be paid out, making them a form of estimated liability for the employer.

Question 8

Amounts received in advance from customers for future products or services:

Accepted Answer

Amounts received in advance from customers for future products or services are considered liabilities because the company has not yet earned the revenue and has an obligation to deliver the product or service in the future. The recognition of this revenue will happen at the time of delivery or fulfillment of the product or service.

Question 9

Obligations not expected to be paid within one year (or the company's operating cycle if longer than one year) are reported as:

Accepted Answer

Obligations not expected to be paid within one year (or the company's operating cycle if longer than one year) are typically classified as long-term liabilities on the balance sheet.

Question 10

Each employee records the number of withholding allowances claimed on form W-4,the withholding allowance certificate that is filed with the employer.

Accepted Answer

Each employee is required to record the number of withholding allowances claimed on form W-4 when filing it with the employer.

Question 11

An employee earnings report is a cumulative record of an employee's hours worked,gross earnings,deductions,and net pay.

Accepted Answer

An employee earnings report typically includes all of these components, making it a cumulative record of an employee's wages earned over a certain period of time.

Question 12

Obligations due to be paid within one year or within the company's operating cycle,whichever is longer,are:

Accepted Answer

Obligations due to be paid within one year or within the company's operating cycle, whichever is longer, are classified as current liabilities on the balance sheet. Current liabilities include accounts payable, short-term debt, taxes owed, and other obligations that are expected to be settled in the near term.

Question 13

A company performed warranty repair work for a customer that cost $1,000.The journal entry to record the work should be a debit of $1,000 to Warranty Expense and a credit of $1,000 to Estimated Warranty Liability.

Accepted Answer

The answer of A company performed warranty repair work for...

Question 14

When the number of withholding allowances increases,the amount of income tax withheld increases.

Accepted Answer

When the number of withholding allowances increases, the amount of income tax withheld decreases.

Question 15

A payroll register is a cumulative record of an employee's hours worked,gross earnings,deductions,and net pay.

Accepted Answer

The answer of A payroll register is a cumulative record...

Question 16

A payroll register usually shows the pay period dates,hours worked,gross pay,deductions,and net pay of each employee for every pay period.

Accepted Answer

A payroll register typically includes all of the information listed in the statement.

Question 17

Accounts payable:

Accepted Answer

Accounts payable are amounts owed to suppliers for products and/or services purchased on credit. They represent a short-term liability as they are expected to be paid within a specific period of time, typically within 30 days. They are recorded on the balance sheet under current liabilities.

Question 18

Liabilities:

Accepted Answer

Liabilities must sometimes be estimated, such as when they are contingent or are based on uncertain future events, like warranty claims or lawsuits.

Question 19

The Form W-2 must be given to employees before January 31 following the year covered by this report.

Accepted Answer

This is correct based on IRS regulations.

Question 20

Employers are required to pay state and federal payroll taxes.

Accepted Answer

Employers are required to pay both state and federal payroll taxes, which include Social Security, Medicare, and unemployment taxes. These taxes are used to fund various social programs and services provided by the government.

Quiz 9: Reporting and Analyzing Current Liabilities