PCP - Chapter 9 Accounting for Current Liabilities
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PCP
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PCP
PCP - Chapter 9 Accounting for Current Liabilities
When a company has a current obligation to make a future payment to their supplier due to a shipment of supplies that were received last week, the company would record this transaction with an increase to an asset account and a(n) ____ account.
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PCP - Chapter 9 Accounting for Current
Liabilities Questions & Answers
When a company has a current obligation to make a future payment to their supplier
due to a shipment of supplies that were received last week, the company would record
this transaction with an increase to an asset account and a(n) ____ account. - answer
liability
Which of the following items would be considered a current liability?
- Notes payable, due in 14 months
-Notes payable, due in 3 months
-Wages payable
-Accounts payable, terms n/30 - answer Wages payable
Accounts payable, terms n/30
Notes payable, due in 3 months
Obligations due after one year or one operating cycle, whichever is longer, are
considered to be: - answer Long-term liabilities
A measurable obligation arising from agreements, contracts, or laws is called a - answer
Known liabilities
Spot Co. purchases office supplies from Sally Supplies, Inc.. Spot does not pay cash for
the purchase, and now owes the amount to Sally. This transaction would typically be
recorded in which account in Spot's books? - answer Accounts payable
Liability - answer A probable future payment of assets or services that a company is
presently obligated to make as a result of past transactions or events.
Bryne Co. sells merchandise and collects a 5% state sales tax. The tax is recorded on
Bryne's general ledger as a(n) - answer liability account
A liability due within one year or the company's operating cycle, whichever is longer. -
answer Current Liability
Fortiz Co. receives $85 for the sale of merchandise with a sales price of $80 and sales
tax of $5. The entry to record the $5 sales tax would require which of the following? -
answer Credit to Sales Tax Payable.
Ace Company borrowed $10,000 from Fair Rates Bank by signing a two-year note
payable. Ace's operating cycle is 14 months.
, This note would be considered a - answer Long-term liability on the balance sheet.
Bina Consulting Co. collected $500 from a customer in advance to provide consulting
fees for the next two months. The $500 would be recorded with a - answer debit to
Cash
credit to the Unearned Revenues
which is a(n) liability account.
A known liability is a measurable obligation arising from agreements, contracts, or laws.
Known liabilities would include all of the following items, except:
A company sells 12-month subscriptions to popular magazines. During the month of
May, the company sells $10,000 in magazines, which will start in June. The journal
entry to record the sales not yet earned will include a credit to which account? - answer
Unearned Subscription Revenue
A liability created by buying goods or services on credit is typically recorded to - answer
accounts payable
A company sells 12-month popular magazine subscriptions. During the month of May,
the company sells $12,000 in magazines, which will start in June. The adjusting entry to
record the $1,000 of subscriptions earned in June will include a debit to which account?
- answer Unearned Subscription Revenue
Zion Co. sells $100 of merchandise and collects $10 sales tax. The sales tax is
recorded to which account? - answer Sales tax payable
A written promise to pay a specified amount on a stated future date within one year or
the company's operating cycle, whichever is longer, is considered a - answer Short-
term note payable
KRS Co. sells merchandise for $120 and collects sales tax of $12. KRS would record
the $12 sales tax with a credit to the Sales Tax - answer payable
Niwa Co. replaced a $3,000 account payable balance to Fiona Co. with a 60-day,
$3,000 note bearing 5% annual interest. Niwa's entry to record this transaction would
include which of the following entries?
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