Which of the following are withheld from an employee's salary?

I. FICA taxes.

II. Federal and state unemployment taxes.

III. Federal and state income taxes.

IV. Employee portion of health insurance.

A) I, II, and IV

B) I, III, and IV

C) I and IV

D) II and III

Answer: B

Which of the following is true regarding FICA taxes?

A) FICA taxes are paid only by the employee.

B) FICA taxes are paid only by the employer.

C) FICA taxes are paid in equal amounts by the employee and the employer.

D) FICA taxes are paid in different amounts by the employee and the employer.

Answer: C

Which of the following are not included in an employer's payroll tax expense?

A) Employer portion of FICA taxes.

B) Federal unemployment taxes.

C) State unemployment taxes.

D) State income taxes.

Answer: D

Which of the following is not withheld from an employee's salary?

A) FICA taxes.

B) Federal and state unemployment taxes.

C) Federal and state income taxes.

D) Employee portion of health insurance.

Answer: B

Which of the following are employer payroll costs?

I. FICA taxes.

II. Federal and state unemployment taxes.

III. Federal and state income taxes.

IV. Employer contributions to a retirement plan.

A) I and IV

B) I, III, and IV

C) I, II, and IV

D) II and III

Answer: C

Which of the following is not an employer payroll cost?

A) FICA taxes.

B) Federal and state unemployment taxes.

C) Federal and state income taxes.

D) Employer contributions to a retirement plan.

Answer: C

Universal Travel, Inc. borrowed $500,000 on November 1, 2021, and signed a twelve-month note bearing interest at 6%.

Universal Travel, Inc. borrowed $500,000 on November 1, 2021, and signed a twelve-month note bearing interest at 6%. Principal and interest are payable in full at maturity on October 31, 2022. In connection with this note, Universal Travel, Inc. should record interest expense in 2022 in the amount of:

A) $8,000.

B) $30,000.

C) $5,000.

D) $25,000.

Answer: D

Large, highly-rated firms sometimes sell commercial paper:

A) To borrow funds at a lower rate than through a bank.

B) To borrow funds when they cannot obtain a loan from a bank.

C) Because they can't borrow anywhere else.

D) To improve their credit rating.

Answer: A

An informal agreement that allows a company to borrow up to a prearranged limit without having to follow formal loan procedures and prepare paperwork is known as:

A) A line of credit.

B) Commercial Paper.

C) A debt covenant.

D) Working capital.

Answer: A

The Pita Pit borrowed $100,000 on November 1, 2021, and signed a six-month note bearing interest at 12%. Principal and interest are payable

The Pita Pit borrowed $100,000 on November 1, 2021, and signed a six-month note bearing interest at 12%. Principal and interest are payable in full at maturity on May 1, 2022. In connection with this note, The Pita Pit should report interest expense at December 31, 2021, in the amount of: (Do not round your intermediate calculations.)

A) $0.

B) $1,000.

C) $2,000.

D) $6,000.

Answer: C

The Pita Pit borrowed $100,000 on November 1, 2021, and signed a six-month note bearing interest at 12%. Principal and interest are payable in full at maturity on May 1, 2022. In connection with this note, The Pita Pit should report interest expense in 2022 for the amount of:

A) $0.

B) $4,000.

C) $2,000.

D) $6,000.

Answer: B

Universal Travel, Inc. borrowed $500,000 on November 1, 2021, and signed a twelve-month note bearing interest at 6%. Principal and interest are payable in full at maturity on October 31, 2022. In connection with this note, Universal Travel, Inc. should report interest payable at December 31, 2021, in the amount of: (Do not round your intermediate calculations.)

A) $8,000.

B) $30,000.

C) $5,000.

D) $25,000.

Answer: C

On November 1, 2021, New Morning Bakery signed a $200,000, 6%, six-month note payable with the amount borrowed plus accrued interest

On November 1, 2021, New Morning Bakery signed a $200,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on May 1, 2022. New Morning Bakery records the appropriate adjusting entry for the note on December 31, 2021. What amount of cash will be needed to pay back the note payable plus any accrued interest on May 1, 2022? (Do not round your intermediate calculations.)

A) $200,000.

B) $202,000.

C) $204,000.

D) $206,000.

Answer: D

On December 1, 2021, Old World Deli signed a $300,000, 5%, six-month note payable with the amount borrowed plus accrued interest due six months later on June 1, 2022. Old World Deli records the appropriate adjusting entry for the note on December 31, 2021. What amount of cash will be needed to pay back the note payable plus any accrued interest on June 1, 2022?

A) $300,000.

B) $301,250.

C) $306,250.

D) $307,500.

Answer: D

On November 1, 2021, New Morning Bakery signed a $200,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on May 1, 2022. New Morning Bakery should record which of the following adjusting entries at December 31, 2021? (Do not round your intermediate calculations.)

A) Debit Interest Expense and credit Interest Payable, $2,000.

B) Debit Interest Expense and credit Cash, $2,000.

C) Debit Interest Expense and credit Interest Payable, $6,000.

D) Debit Interest Expense and credit Cash, $6,000.

Answer: A

On September 1, 2021, Daylight Donuts signed a $100,000, 9%, six-month note payable with the amount borrowed plus accrued interest due six months later on Mar, 2022. Daylight Donuts records the appropriate adjusting entry for the note on December 31, 2021. In recording the payment of the note plus accrued interest at maturity on Mar, 2022, Daylight Donuts would: (Do not round your intermediate calculations.)

A) Debit Interest Expense, $3,000.

B) Debit Interest Expense, $1,500.

C) Debit Interest Payable, $1,500.

D) Debit Interest Expense, $4,500.

Answer: B

On September 1, 2021, Daylight Donuts signed a $100,000, 9%, six-month note payable with the amount borrowed plus accrued interest due six months later on Mar, 2022. Daylight Donuts should report interest payable at December 31, 2021, in the amount of: (Do not round your intermediate calculations.)

A) $0.

B) $1,500.

C) $3,000.

D) $4,500.

Answer: C

On December 1, 2021, Old World Deli signed a $300,000, 5%, six-month note payable with the amount borrowed plus accrued interest due six months later on June 1, 2022. Old World Deli should record which of the following adjusting entries at December 31, 2021?

A) Debit Interest Expense and credit Interest Payable, $7,500.

B) Debit Interest Expense and credit Cash, $7,500.

C) Debit Interest Expense and credit Interest Payable, $1,250.

D) Debit Interest Expense and credit Cash, $1,250.

Answer: C

On November 1, 2021, a company signed a $100,000, 6%, six-month note payable with the amount borrowed plus accrued interest due

On November 1, 2021, a company signed a $100,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on May 1, 2022. The company records the appropriate adjusting entry for the note on December 31, 2021. In recording the payment of the note plus accrued interest at maturity on May 1, 2022, the company would:

A) Debit Interest Expense, $2,000.

B) Debit Interest Expense, $1,000.

C) Debit Interest Payable, $2,000.

D) Debit Interest Expense, $3,000.

Answer: A

On November 1, 2021, a company signed a $100,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on May 1, 2022. The company should report interest payable at December 31, 2021, in the amount of:

A) $0.

B) $1,000.

C) $2,000.

D) $3,000.

Answer: B

Bear Essentials borrowed $50,000 from Stacks Bank and signed a promissory note. What entry should Stacks Bank record?

A) Debit Cash, $50,000 Credit Notes Receivable, $50,000.

B) Debit Notes Receivable, $50,000 Credit Cash, $50,000.

C) Debit Cash, $50,000 Credit Notes Payable, $50,000.

D) Debit Notes Payable, $50,000 Credit Cash, $50,000.

Answer: B