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Study Guide Intermediate Ii

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Intermediate Accounting II
Study Guide
Final Exam 1. Liabilities are a. any accounts having credit balances after closing entries are made. b. deferred credits that are recognized and measured in conformity with generally accepted accounting principles. c. obligations to transfer ownership shares to other entities in the future. d. obligations arising from past transactions and payable in assets or services in the future.

2. Which of the following is a characteristic of a current liability but not a long-term liability? a. Unavoidable obligation. b. Present obligation that entails settlement by probable future transfer or use of cash, goods, or services. c. Liquidation is reasonably expected to require use of existing resources classified as current assets or create other current liabilities. d. Transaction or other event creating the liability has already occurred. 3. An employee's net (or take-home) pay is determined by gross earnings minus amounts for income tax withholdings and the employee's a. portion of FICA taxes and unemployment taxes. b. and employer's portion of FICA taxes, and unemployment taxes. c. portion of FICA taxes, unemployment taxes, and any voluntary deductions. d. portion of FICA taxes and any voluntary deductions.

4. Which of the following best describes the cash basis method of accounting for warranty costs? a. Expensed when liability is accrued. b. Expensed when warranty claims are certain. c. Expensed based on estimate in year of sale. d. Expensed when incurred. 5. The ratio of current assets to current liabilities is called the a. current ratio. b. acid-test ratio. c. current asset turnover ratio. d. current liability turnover ratio. 6. Reich, Inc. issued bonds with a maturity amount of $200,000 and a maturity ten

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