Goals Achievement: Chapter Twelve
An example of an accrued liability is:
salaries payable Correct or the current portion of long-term debtIncorrect
Collections for third parties should be recorded as a current liability.
true Correct or falseIncorrect
Which of the following would not be a typical current liability?
prepayments (advances) to suppliers Correct or amounts collected for and payable to third partiesIncorrect
A Discount account should be established when interest is included in the face amount of the note.
true Correct or falseIncorrect
The process of reducing a discount by recognizing interest expense is frequently referred to as discount amortization.
true Correct or falseIncorrect
The guidelines for the recognition of contingent liabilities reflect that they should be recorded in the accounts when it is probable that the future event will occur and the amount of the liability can be reasonably:
estimated Correct or isolatedIncorrect
By definition, contingent liabilities are improbable.
true Incorrect or falseCorrect
Which of the following payroll taxes is borne exclusively by the employer?
social security tax Incorrect or unemployment taxCorrect
Deductions from employee earnings, plus net pay, equals:
gross earnings Correct or gross withholdingsIncorrect
Withholding allowances are determined by reference to the:
Amounts withheld from employees' paychecks are recorded on the employer's books as a:
liability Correct or contra liabilityIncorrect
Stated simply, paid vacation time should be expensed while the employee is on vacation.
true Incorrect or falseCorrect
The total amounts owed to employees for retirement benefits will appear on the balance sheet as a liability.
true Incorrect or falseCorrectIncorrect