1. Notes Payable due for payment within one year of the balance sheet date are usually classified as current liabilities.

2. Current liabilities are usually listed in alphabetical order on the balance sheet.

3. A contingent liability should be recorded if the amount can be reasonably estimated, even if the contingency is unlikely.

4. Net pay is determined by subtracting employee payroll deductions from gross earnings.

5. Workplace, Health, Safety and Compensation Plan contributions are made by the employer only.

6. A current liability is a debt that can reasonably be expected to be paid from existing current assets, or through the creation of other current liabilities within:
A.one year.
B.the operating cycle.
C.one year or operating cycle, whichever is longer.
D.one year or operating cycle, whichever is shorter.

7. The amount of sales tax collected by a retail store is recorded as:
A.GST expense and PST expense or HST expense.
B.GST payable and PST payable or HST payable.
C.GST revenue and PST revenue or HST revenue.

8. All of the following are current liabilities except:
A.GST and PST or HST payable.
B.unearned rental revenue.
C.current maturities of long-term debt.
D.all of these options are current liabilities.

9. Acme borrows $100,000 on July 1 and is issued a 6% one-year note payable. Interest is payable annually. On December 31, Acme will:
A.debit interest expense and credit interest payable.
B.debit interest expense and credit cash.
C.debit interest payable and credit cash.
D.debit interest expense and credit notes payable.

10. Current liabilities are reported on the balance sheet:
A.in order of liquidity, by maturity date.
B.in order of magnitude, with the largest ones first.
C.with bank loans, notes payable, and accounts payable first, regardless of amount.
D.all of these options are permitted.

11. A contingent liability is recorded when the contingency is:
B.reasonably possible.
D.unlikely to occur.

12. Employee pay expressed in terms of a specified amount per month or per year is called:

13. Mandatory employee payroll deductions include all of the following except:
A.United Way donations.
B.federal and provincial income taxes.
C.Employment Insurance (EI premiums).
D.Canada Pension Plan (CPP) contributions.

14. The sum of the individual cheques the employees will receive is recorded as:
A.Salaries Expense.
B.Wages Expense.
C.Salaries and Wages Payable.
D.Employee Pay Payable.

15. Employer payroll contributions include all of the following except:
A.Canada Pension Plan (CPP) contributions.
B.Employment Insurance (EI) premiums.
C.Workplace, Health, Safety and Compensation Plan.
D.federal and provincial income taxes.

16. Unearned revenue exists when:
A.goods have been delivered or services provided and cash has been received.
B.goods have been delivered or services provided but the customer has not yet been billed.
C.cash has been received, but goods have not been delivered nor services provided.
D.goods have been delivered or services provided and the customer has been billed, but has not yet paid.

17. All of the following comments regarding current maturities of long-term debt are true except:
A.A journal entry is required to recognize the current portion of long-term debt.
B.The current portion of long-term debt is shown as a current liability on the balance sheet.
C.The long-term debt is shown on the balance sheet, net of the current portion.
D.The current portion will be due within the next year or operating cycle, whichever is longer.

18. An estimated liability is:
A.an obligation that depends on the occurrence or non-occurrence of a future event.
B.an obligation whose amount or timing is uncertain.
C.not recorded until the exact amount is known.
D.a definitely determinable liability.

19. All of the following can be estimated liabilities except:
A.property taxes payable.
B.warranty liabilities.
C.corporate income taxes payable.
D.salaries payable.

20. In 2002, Acme begins selling widgets with a two-year warranty. The total warranty expense is estimated at $5,000. Actual warranty work done in 2002 is $2,750. In 2002, Acme should record a warranty expense of:

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