ACT 222 Final Exam WITH COMPLETE
ANSWERS { GRADED A+}
Liabilities - ✔✔obligations resulting from past transactions or
events that require a business to pay money, provide goods, or
perform service in the future
current liabilities - ✔✔obligations that will require the use of
existing current assets or the creation of other current liabilities
Accounts Payable - ✔✔Amounts to be paid in the future for
goods or services already acquired.
Notes Payable - ✔✔when credit period is longer than 30 or 60
days.
promissory note - ✔✔prepared when a loan is obtained from a
bank
,interest incurred on a promissory note structure - ✔✔1) add-on
interest method
2) discount method
Add-on interest method - ✔✔amount paid in addition to the face
amount of the note
discount method - ✔✔amount included in the face amount of the
note
When is the add-on interest method paid? - ✔✔paid at the
maturity date
Interest Formula - ✔✔principal x rate x time
maturity date - ✔✔The date on which an investment becomes
due for payment.
Calculate maturity date - ✔✔count the number of months from
the date of issue
current portion of long-term debt - ✔✔Portion of long-term debt
due within one year or the operating cycle, whichever is longer;
reported under current liabilities.
, Sales Taxes Payable - ✔✔Retailers must collect sales taxes
from customers on transfers of tangible personal property and on
certain services and then remit to the proper governmental
authority.
excise tax - ✔✔a tax on the production, sale, or consumption of
goods produced within a country
3 types of current liabilities for payroll - ✔✔1) accured salaries
and wages payable
2) amounts withheld from employeees paychecks
3) payroll taxes and fringe benefits paid by the employer
Gross Pay - ✔✔the total amount of an employee's earnings
before deductions are taken out
Net Pay - ✔✔Amount of income left after taxes and deductions
have been taken out.
What is withheld from a paycheck due to legal mandate? - ✔✔1)
Federal income tax
2) State income tax
ANSWERS { GRADED A+}
Liabilities - ✔✔obligations resulting from past transactions or
events that require a business to pay money, provide goods, or
perform service in the future
current liabilities - ✔✔obligations that will require the use of
existing current assets or the creation of other current liabilities
Accounts Payable - ✔✔Amounts to be paid in the future for
goods or services already acquired.
Notes Payable - ✔✔when credit period is longer than 30 or 60
days.
promissory note - ✔✔prepared when a loan is obtained from a
bank
,interest incurred on a promissory note structure - ✔✔1) add-on
interest method
2) discount method
Add-on interest method - ✔✔amount paid in addition to the face
amount of the note
discount method - ✔✔amount included in the face amount of the
note
When is the add-on interest method paid? - ✔✔paid at the
maturity date
Interest Formula - ✔✔principal x rate x time
maturity date - ✔✔The date on which an investment becomes
due for payment.
Calculate maturity date - ✔✔count the number of months from
the date of issue
current portion of long-term debt - ✔✔Portion of long-term debt
due within one year or the operating cycle, whichever is longer;
reported under current liabilities.
, Sales Taxes Payable - ✔✔Retailers must collect sales taxes
from customers on transfers of tangible personal property and on
certain services and then remit to the proper governmental
authority.
excise tax - ✔✔a tax on the production, sale, or consumption of
goods produced within a country
3 types of current liabilities for payroll - ✔✔1) accured salaries
and wages payable
2) amounts withheld from employeees paychecks
3) payroll taxes and fringe benefits paid by the employer
Gross Pay - ✔✔the total amount of an employee's earnings
before deductions are taken out
Net Pay - ✔✔Amount of income left after taxes and deductions
have been taken out.
What is withheld from a paycheck due to legal mandate? - ✔✔1)
Federal income tax
2) State income tax
