Section_Problem_Set_9_solution - AEM 221 Section #9 Name:...

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AEM 221 Section #9 Name: Section: Multiple Choice. 1. A contingent liability that is “reasonably possible” but “cannot reasonably be estimated” A) must be recorded and reported as a liability. B) does not need to be recorded or reported as a liability. C) must only be disclosed as a note to the financial statements. D) must be reported as a liability, but not recorded. E) None of the above is correct. 2. In 2001, The Walt Disney Company reported current assets of $7,029 million, total assets of $43,699 million, current liabilities of $6,219 million, and total liabilities of $20,645 million. What was their current ratio for 2001? A) 1.63 B) 1.13 C) 2.12 D) 1.89 3. The following is a partial list of account balances from the books of Probst Enterprise at the end of 2009: Accounts Payable $20,500 Accounts Receivable 12,300 Accrued Vacation Liability 1,200 Cash 6,500 Deferred Revenue 1,300 Income Taxes Payable 1,900 Notes Payable (due in 2 years) 10,000 Based solely upon these balances, the amount of current liabilities appearing on Probst’s 2009 year-end balance sheet should be A) $24,900. B) $24,100. C) $23,700. D) $20,500. E) None of the above is correct.
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4. Gross wages of $20,000 accrued but not paid to employees at the end of 2007 should be recorded by the employer in a journal entry that includes a A) debit of $20,000 to Wages payable. B) credit of $20,000 to Cash. C) debit of $20,000 to Wages expense. D) debit of $20,000 to Cash. E) None of the above is correct. 5. Miranda Company borrowed $100,000 cash on September 1, 2007, and signed a one-year 6%, interest-bearing note payable. The required adjusting entry at the end of the accounting period, December 31, 2007, would be A) Interest expense 2,000 Interest payable 2,000 B) Interest expense 6,000 Interest payable 6,000 C) Notes payable 100,000 Interest expense 6,000
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This note was uploaded on 03/05/2008 for the course AEM 2210 taught by Professor Little,j. during the Fall '07 term at Cornell University (Engineering School).

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Section_Problem_Set_9_solution - AEM 221 Section #9 Name:...

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