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1. Which of the following is not true regarding taxes deducted from an employeeâs earning?A. these items are expenses to the employerB. these items are liabilities that must the paid to federal and state governmentsC. these items are credited within the entry to record wage or salary expenseD. The employer servers as an agent for the governments for collecting these taxes.2. when the right to purchase stock in the future is used as a substitute for a cash bonus, the company is grantingA. Post-retirement benefitsB. Compensated absencesC. Stock optionsD. Post-employment benefits3. the accounting term for an uncertain circumstance involving a potential gain or loss that will NOT be resolved until the future is a (n)A. extraordinary itemB. contingencyC. pensionD. deferred liability4. Which of the following is the appropriate disclosure in the financial statements for a contingent gain?A. estimate the amount of the gain and make the appropriate journal entryB. Provide detailed disclosure of the gain in the notesC. No disclosure until the future event resolves itself.D. None of these are correct5. Which of the following is not a consideration in classifying a lease?A. Value of an asset on the lessorâs booksB. Economic life of the assetC. Present value of the lease paymentsD. Whether the lease is cancelable6. A non-cancelable lease should be recorded as capital lease ifA. The present value of the lease payments is 75% or more of fair market value of the leased assetB. Tittle to the asset transfers to the lessee by the end of the lease termC. The lessee is given an option to purchase the asset at its fair market valueD. Any one of these criterion are met7. The cost assigned to the individual assets acquired in a basket purchase is based on their relative.A. Historical costs B. Fair market valueC. Book valuesD. Depreciable costs8. Which of the following assets is not usually depreciated, depleted, or amortized?A. furnitureB. Mineral depositsC. LandD. Patents9. Depreciation can best be described as a method ofA. Accumulating funds for the replacement of assetsB. Reducing the carrying cost of assets to current market valueC. Deriving tax benefitsD. Allocating the costs of assets over their useful lives10. Which of the following statements is False?A. A liability is an item that involves a future transfer of resourcesB. A liability is an item that is measurable in monetary itemsC. A liability is an item that represents an obligation of an enterpriseD. A liability is an item that must be paid in cash11. Which of the following is LEAST likely to be classified as a long-term liability?A. Salaries payableB. Mortgage payableC. Lease obligationsD. Deferred income taxes payable12. Which of the following is LEAST likely to be classified as a current liability?A. Wages payableB. Income taxes PayableC. Unemployment taxes payableD. Bonds payable13. At the end of each year, a mortgage is report under how many sections of the balance sheet?A. 1B. 2C. 3D. 414. Interest expense on a 6-month, 8 percent, $6,000 note payable would be approximatelyA. $350B. $120C. $480D. $240
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