1			Unearned Revenues are also known by which three terms:
			A)	Sales Tax Payable, Notes Payable, and Deferred Revenues.
			B)	Deferred Revenues, Collections in Advance, and Notes Payable.
			C)	Collections in Advance, Deferred Revenues, and Prepayments.
			D)	Prepayments, Sales Taxes Payable, and Deferred Revenues.
			E)	None of the above.
2			The maturity value of a note payable is calculated as:
			A)	The principal of the note plus the accrued interest expense on the note.
			B)	The face amount of the note plus the accrued interest expense on the note.
			C)	The face amount only.
			D)	Both A and B are correct.
			E)	None of the above.
3			Although liabilities can be classified as either current liabilities or long-term liabilities which is a formal classification scheme, they can also be classified informally as (1) certain in amount and certain as to ultimate payment, (2) estimated in amount but uncertain as to ultimate payment, and (3) uncertain as to the amount and uncertain as to ultimate payment. Which of the following items falls into category 3?
			A)	The accrual of five days of wages expense that are incurred in the current accounting period but will not be paid until the next accounting period.
			B)	Sales tax collected from customers which must be paid to the state within 2 months.
			C)	The company is sued for manufacturing faulty products. The case will go to court and the company stands to be fined a material amount but they also have a strong chance of winning the case.
			D)	During the past year, customers have purchased gift certificates from the company. These certificates must be used within nine months from the purchase date or they expire.
			E)	None of the above.
4			A company has a $4,000, 270-day, 6%, note payable recorded on its books which was dated July 2, 2010. The interest expense is paid when the note matures. How much interest expense must be accrued on December 31, 2010, which is the end of the accounting period? Assume a 365-day year, use the exact number of days in your calculations, and round your answer to the closest penny.
			A)	$120.00
			B)	$119.00.
			C)	$119.67.
			D)	$120.98.
			E)	None of the above.
5			A company offers its employees a bonus equal to 3% of the company's annual net income. The company expects 2010 net income to be $175,000. The amount that should be credited to Employee Bonus Payable is:
			A)	$5,250.00
			B)	$5,097.09
			C)	$5,065.50
			D)	$6,100.00
			E)	None of the above
6			The social security tax is paid on an employee's wages, subject to a ceiling. The ceiling in 2010 was $106,800. What rate did an individual pay on that yearly earnings ceiling?
			A)	5.40%.
			B)	1.45%.
			C)	12.40%.
			D)	6.20%.
			E)	None of the above.
7			Which of the following is not created by the adjusting entry to recognize interest expense incurred but not yet paid?
			A)	Interest payable.
			B)	Accrued interest expense.
			C)	A current liability.
			D)	A Note Payable.
			E)	All of the above.
8			Which of the following is not a current liability?
			A)	Sales Taxes Payable.
			B)	Accrued Wages Payable.
			C)	Salaries Payable.
			D)	The non-current portion of a Mortgage Payable.
			E)	Unearned Revenues.
9			Twenty-thousand dollars in cash is borrowed on a 60-day note payable. If the interest cost to borrow is $400, and we assume that each month has thirty days, what is the actual interest rate on this note as expressed on an annual basis?
			A)	10.00%.
			B)	12.00%.
			C)	16.00%.
			D)	20.00%.
			E)	None of the above.
10			A tanning salon sells 100, $50 gift certificates during month 1 and records these sales with a debit to Cash and a credit to Unearned Revenue. By the end of month 2, 70 of the certificates have been used. Which of the following is true at the end of month 2?
			A)	An entry should be made that includes a debit to Unearned Revenue for $3,500.
			B)	The amount of revenue that left to be earned is $3,500.
			C)	An entry should be made that includes a debit to Tanning Revenue for $3,500.
			D)	The amount of revenue earned at the end of the second month is $1,500.
			E)	An entry should be made that includes a debit to Unearned Revenue for $1,500.
11			Which of the following employer or employee taxes are not subject to a ceiling limit amount (taxes are paid on earnings up to a certain amount; no taxes are paid on amounts above the ceiling limit)?
			A)	Medicare taxes.
			B)	Social Security taxes.
			C)	State unemployment taxes.
			D)	Federal unemployment taxes.
			E)	None of the above.
12			Which of the following is not an estimated liability?
			A)	Product warranties.
			B)	Bonus plans.
			C)	Pending lawsuit for patent infringement.
			D)	Liabilities under pension plans.
			E)	None of the above.
13			The recording of product warranty expense in the year the merchandise under warranty is sold is supported by which principle or concept?
			A)	Matching principle.
			B)	Materiality principle.
			C)	Revenue recognition principle.
			D)	Business entity concept.
			E)	None of the above.

THE FOLLOWING QUESTIONS ARE BASED ON APPENDIX 11A CONCERNING PAYROLL REPORTS, RECORDS, AND PROCEDURES

14			The length of time covered by Form 941, the IRS form on which an employer reports its liability for federal income taxes withheld and for social security and medicare taxes is:?
			A)	One year.
			B)	One month.
			C)	Six months.
			D)	One calendar quarter.
			E)	Some other time period.
15			What annual report must an employer provide by law to each employee that summarizes the employee's calendar year gross earnings?
			A)	Form 1040.
			B)	Form W-4.
			C)	Form W-2.
			D)	Form 941.
			E)	Form 940.