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Bakersfield College ACG 2021 1)Barbara Muller Services (BMS) pays its employees monthly

Accounting

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Bakersfield College

ACG 2021

1)Barbara Muller Services (BMS) pays its employees monthly. The payroll information listed

below is for January 2016, the first month of BMS’s fiscal year.
Salaries	$80,000
Federal income taxes to be withheld	16,000
Federal unemployment tax rate	0.80%
State unemployment tax rate (after FUTA deduction)	5.40%
Social security tax rate	6.2%
Medicare tax rate	1.45%
The journal entry to record payroll for the January 2016 pay period will include a debit to payroll tax expense of:
a. $ 6,120.
b. $ 4,960.
c. $11,080.
d. $57,880.

Matching Pair Questions

Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the number for the most correct term.

TERM	PHRASE	NUMBER
1. Short-term note	Liabilities when received.
2. Warranty liability	Confirming event is likely to occur.
3. Advances from customers	A loss contingency accrued in the period of related sales.
4. Probable	Most common temporary financing arrangement.
5. Secured loan	Requires collateral.

3. Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the number for the most correct term.

TERM	PHRASE	NUMBER
1. Sales tax payable	Due on demand.
2. Callable	Contra liability.
3. Accrued liabilities	A third party liability.
4. Discount on notes payable	Accrues with passage of time.
5. Interest payable	Expenses incurred but not yet paid.

4. Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the number for the most correct term.

TERM	PHRASE	NUMBER
1. Noncommitted lines of credit	Liabilities until refunded.
2. Gain contingencies	More than remote but less than likely.
3. Customer deposits	Face amount x rate x time.
4. Reasonably possible	Not recorded until realized.
5. Interest paid on debt	Informal borrowing agreements.

5. Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the number for the most correct term.

TERM	PHRASE	NUMBER
1. Subsequent events	Larger than that stated on discounted notes.
2. Unasserted claims	May include items that are not legally enforceable.
3. Liabilities	Sale of receivables.
4. Factoring	Evaluated for recognition only if an unfavorable outcome is probable.
5. Effective interest	Occur in the current year before prior year financial statements are issued.

6. Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the number for the most correct term.

TERM	PHRASE	NUMBER
1. Noninterest-bearing notes	Use accounts receivable as collateral.
2. Committed lines of credit	Often require compensating balance.
3. Loss contingencies	The formal credit instrument is the invoice.
4. Secured loans	Effective interest higher than stated interest.
5. Accounts payable	Recorded if probable and amount is known or reasonably estimable.

7. Listed below are five terms followed by a list of phrases that describe or characterize each of the terms. Match each phrase with the number for the correct term.

TERM	PHRASE	NUMBER
1. Disclosure notes	Present value of interest plus present value of principal.
2. Commercial paper	Required for contingencies.
3. Current liabilities	Payable with current assets.
4. Usual valuation of liabilities	Short-term debt to be refinanced with long- term bonds payable.
5. Long-term liabilities	Avoids registration with SEC.

8. Indicate (by number) the way each of the items listed below should be reported in a balance sheet at December 31, 2016. Match each phrase with the number for the correct term.

TERM	PHRASE	NUMBER
1. Accrue liability	A material gain contingent on a future event that appears exceedingly likely.
2. Disclosure note only	A penalty assessment that probably will be asserted by the EPA, in which case a determinable payment is probable.
3. Not reported	Unassessed penalty with a reasonable possibility of being asserted, in which case a determinable payment is probable.
	An extremely likely loss due to an event that occurred previously and whose amount is unknown but estimable.

9. Listed below are five terms followed by a list of phrases that describe or characterize five of the terms related to accounting for contingent liabilities under IFRS. Match each phrase with the number for the most correct term.

TERM PHRASE NUMBER

contingent gains are not accrued unless virtually certain

How present values affect the measurement

of contingent liabilities under IFRS.

more likely than not Definition of "probable" under IFRS.
mid-point of the range How IFRS refers to an accrued liability that

would generally be referred to as an "accrued contingent loss" under U.S. GAAP.

report at present value whenever time value of money is material

The amount IFRS would accrue given a range

of equally likely outcomes.

provision Treatment of contingent gains under IFRS.

10. Indicate (by number) the way each of the items listed below should be reported in a balance sheet at December 31, 2016. Match each phrase with the number of the term for the accounting treatment.

TERM	PHRASE	NUMBER
1. Disclosure note only	Estimated cost of quality-assurance warranty.
2. Not reported	A material gain contingent on a future event that appears extremely likely to occur in three months.
3. Current liability	Unasserted assessment of penalty that probably will be asserted, in which case there would probably be a loss in six months.
	Unasserted assessment of penalty with a reasonable possibility of being asserted, in which case there would probably be a loss in 13 months.
	A determinable loss from a past event that is contingent on a future event that appears extremely likely to occur in three months.

Indicate (by letter) the way each of the items listed below should be reported in a balance sheet at December 31, 2016.

	Item		Reporting Method
1	Customer advances.	N.	Not reported
2	Noncommitted line of credit.	C.	Current liability
3	Commercial paper.	L.	Long-term liability
4	Note due June 9, 2017.	D.	Disclosure note only
5	Accounts payable.
6	Interest accrued on note, Dec. 31, 2016.
7 Short-term bank loan to be paid with proceeds of sale of common stock.

Indicate (by letter) the way each of the items listed below should be reported in a balance sheet at December 31, 2016.

	Item		Reporting Method
1	Customer advances.	N.	Not reported
2	Noncommitted line of credit.	C.	Current liability
3	Commercial paper.	L.	Long-term liability

	4	Note due June 9, 2017.	D.	Disclosure note only
	5	Accounts payable.
	6 Long-term bonds that will be callable by the creditor in the upcoming year unless existing violation is not corrected (there is a reasonable possibility the violation wi
	corrected within the grace period). 7 Long-term bonds callable by the creditor in the upcoming year that are not expecte be called.
	8 Estimated cost of quality-assurance warranty.
	9 Interest accrued on note, Dec. 31, 2016.
	10 Short-term bank loan to be paid with proceeds of sale of common stock.
	11 A material gain contingent on a future event that appears extremely likely to
	occur in three months. 12 Unasserted assessment of penalty that probably will be asserted, in which case t would probably be a loss in six months.
	13 Unasserted assessment of penalty with a reasonable possibility of being asserte which case there would probably be a loss in 13 months.
	14 A determinable loss from a past event that is contingent on a future event that app
extremely likely to occur in three months.
C_	5	Accounts payable.

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Bakersfield College ACG 2021 1)Barbara Muller Services (BMS) pays its employees monthly

Accounting

Matching Pair Questions