ACCT 315 Ch. 13, 14, 15(Complete solutions)
Liabilities are correct answers obligations arising from past transactions and payable in assets or
services in the future.
An employee's net (or take-home) pay is determined by gross earnings minus amounts for
income tax withholdings and the employee's correct answers portion of FICA taxes and any
union dues
Which of the following is not a correct statement about sales taxes? correct answers Sales taxes
are an expense of the seller
The revenue from a service-type warranty that covers several years should all be recognized in
the period the warranty is sold. correct answers False
Companies report the amount of social security taxes withheld from employees as well as the
companies' matching portion as current liabilities until they are remitted. correct answers True
Magazine subscriptions and airline ticket sales both result in unearned revenues. correct answers
True
Why is the liability section of the balance sheet of primary importance to bankers? correct
answers To assist in understanding the entity's liquidity.
Which of these is not included in an employer's payroll tax expense? correct answers Federal
income taxes
Companies should recognize the expense and related liability for compensated absences in the
year earned by employees. correct answers True
Among the short-term obligations of Larsen Company as of December 31, the balance sheet
date, are notes payable totaling $250,000 with the Dennison National Bank. These are 90-day
notes, renewable for another 90-day period. These notes should be classified on the balance sheet
of Larsen Company as correct answers Current liabilities
If the market rate is greater than the coupon rate, bonds will be sold at a premium. correct
answers False
The term used for bonds that are unsecured as to principal is correct answers debenture bonds
The face value of bonds is also called each of the following except correct answers stated value
The stated rate is the same as the coupon rate. correct answers True
Companies report bond discounts as a direct deduction from the face amount of the bond. correct
answers True
Liabilities are correct answers obligations arising from past transactions and payable in assets or
services in the future.
An employee's net (or take-home) pay is determined by gross earnings minus amounts for
income tax withholdings and the employee's correct answers portion of FICA taxes and any
union dues
Which of the following is not a correct statement about sales taxes? correct answers Sales taxes
are an expense of the seller
The revenue from a service-type warranty that covers several years should all be recognized in
the period the warranty is sold. correct answers False
Companies report the amount of social security taxes withheld from employees as well as the
companies' matching portion as current liabilities until they are remitted. correct answers True
Magazine subscriptions and airline ticket sales both result in unearned revenues. correct answers
True
Why is the liability section of the balance sheet of primary importance to bankers? correct
answers To assist in understanding the entity's liquidity.
Which of these is not included in an employer's payroll tax expense? correct answers Federal
income taxes
Companies should recognize the expense and related liability for compensated absences in the
year earned by employees. correct answers True
Among the short-term obligations of Larsen Company as of December 31, the balance sheet
date, are notes payable totaling $250,000 with the Dennison National Bank. These are 90-day
notes, renewable for another 90-day period. These notes should be classified on the balance sheet
of Larsen Company as correct answers Current liabilities
If the market rate is greater than the coupon rate, bonds will be sold at a premium. correct
answers False
The term used for bonds that are unsecured as to principal is correct answers debenture bonds
The face value of bonds is also called each of the following except correct answers stated value
The stated rate is the same as the coupon rate. correct answers True
Companies report bond discounts as a direct deduction from the face amount of the bond. correct
answers True
