Question: A contingent liability may be classified as which of the following?

Answer Options:

a. Reasonably possible
b. Remote
c. Probable
d. All of these choices are correct

Answer: D. All of these choices are correct 50

Question: Current liabilities are debts expected to be satisfied _____.

Answer Options:

a. after several years
b. only after six months
c. after one year
d. within one year

Answer: D. within one year 51

Question: Postretirement benefits may include all of the following except _____.

Answer Options:

a. tuition assistance
b. vacation pay
c. dental care
d. life insurance

Answer: B. vacation pay 52

Question: Within a computerized payroll system, which item is considered a variable?

Answer Options:

a. Marital status
b. Social Security number
c. Accrued vacation credits
d. Number of income-tax withholding allowances

Answer: C. Accrued vacation credits 53

Question: A debtor is referred to as a _____.

Answer Options:

a. lender
b. creditor
c. borrower
d. payee

Answer: C. borrower 54

Question: A debtor is referred to as a _____.

Answer Options:

a. lender
b. creditor
c. borrower
d. payee

Answer: C. borrower 55

Question: Analysis that helps creditors evaluate a company’s ability to pay current liabilities includes all of the following except _____.

Answer Options:

a. ratio of cash to monthly cash expenses
b. quick ratio
c. current ratio
d. working capital

Answer: A. ratio of cash to monthly cash expenses 56

Question: The year-end entry for accrued employee vacation privileges is to _____.

Answer Options:

a. debit Salary Expense and credit Cash
b. debit Vacation Pay Expense and credit Vacation Pay Payable
c. debit Vacation Pay Payable and credit Vacation Pay Expense
d. debit Salary Expense and credit Salaries Payable

Answer: B. debit Vacation Pay Expense and credit Vacation Pay Payable 57

Question: Current liabilities are due _____.

Answer Options:

a. and payable within one year
b. but not payable for more than one year
c. and receivable within one year
d. but not receivable for more than one year

Answer: A. and payable within one year 58

Question: Federal income taxes withheld from an employee’s gross pay are recorded as a(n) _____.

Answer Options:

a. contra account
b. payroll expense
c. asset
d. liability

Answer: D. liability 59

Question: Which tax is deducted when determining an employee’s net pay?

Answer Options:

a. SUTA taxes
b. FICA taxes
c. FUTA taxes
d. All of these choices

Answer: B. FICA taxes 60

Question: Which tax are employers required to withhold from employees?

Answer Options:

a. federal unemployment tax
b. FICA tax and state and federal unemployment taxes
c. FICA tax
d. state unemployment tax

Answer: C. FICA tax 61

Question: The total earnings of an employee for a payroll period are referred to as _____.

Answer Options:

a. pay net of taxes
b. net pay
c. take-home pay
d. gross pay

Answer: D. gross pay 62

Question: Each year, there is a maximum amount of earnings subject to all of the following taxes except _____.

Answer Options:

a. state unemployment tax
b. federal unemployment tax
c. Social Security tax
d. federal income tax

Answer: D. federal income tax 63

Question: Which form is generally given to employees after the calendar year so they can file their individual income-tax returns?

Answer Options:

a. Wage and Tax Statement, Form W-2
b. Employer’s Quarterly Federal Tax Return, Form 941
c. Employee’s Withholding Allowance Certificate, Form W-4
d. 401(k) plans

Answer: A. Wage and Tax Statement, Form W-2 64

Question: A pension plan requiring annual employer contributions, without promising employees a specific amount of future pension payments, is termed _____.

Answer Options:

a. defined benefit
b. funded
c. defined contribution
d. unfunded

Answer: C. defined contribution Question 1