Question 1

Most companies pay employees with cash.

Accepted Answer

A) True 
 B)False

Question 2

How do most employers pay employees?

Accepted Answer

A)  By check 
B)  By electronic fund transfer 
C)  By cash payments 
D)  Both A and B are common ways for employers to pay employees 
A)  By check 
B)  By electronic fund transfer 
C)  By cash payments 
D)  Both A and B are common ways for employers to pay employees

Question 3

Which of the following is the form filed with the IRS to report each employee's gross pay, federal income tax withheld, and FICA taxes withheld?

Accepted Answer

A)  Form 1040 
B)  Form W-2 
C)  Form 941 
D)  Form W-4 
A)  Form 1040 
B)  Form W-2 
C)  Form 941 
D)  Form W-4

Question 4

The employee earnings record is NEITHER a journal NOR a ledger.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following amounts are included on an employee's W-4?

Accepted Answer

A)  Unemployment taxes paid for the employee 
B)  Net pay for the employee 
C)  Number of exemptions claimed 
D)  Income taxes withheld 
A)  Unemployment taxes paid for the employee 
B)  Net pay for the employee 
C)  Number of exemptions claimed 
D)  Income taxes withheld

Question 6

Dan Jones and Pat Smith are the only two employees of Lone Star Company. In January, 2009, Dan's gross pay was $4,400 and Pat's gross pay was $5,200. All earnings are subject to FICA taxes of 8%.
Which of the following would be included in the entry to record the payroll taxes imposed on Lone Star Company for January?

Accepted Answer

A)  A debit to FICA tax payable for $768 
B)  A credit to FICA tax payable for $768 
C)  A credit to Salary expense for $8,832 
D)  A debit to Salary payable to employees $9,600 
A)  A debit to FICA tax payable for $768 
B)  A credit to FICA tax payable for $768 
C)  A credit to Salary expense for $8,832 
D)  A debit to Salary payable to employees $9,600

Question 7

Where would unemployment taxes withheld appear?

Accepted Answer

A)  On the income statement as an expense 
B)  On the balance sheet as a long-term liability 
C)  On the balance sheet as a current liability 
D)  There is no account called unemployment taxes withheld 
A)  On the income statement as an expense 
B)  On the balance sheet as a long-term liability 
C)  On the balance sheet as a current liability 
D)  There is no account called unemployment taxes withheld

Question 8

Dan Jones and Pat Smith are the only two employees of Lone Star Company. In January, 2009, Dan's gross pay was $4,400 and Pat's gross pay was $5,200. All earnings are subject to FICA taxes of 8%.
Which of the following would be included in the entry to record the payroll for January?

Accepted Answer

A)  A debit to Salary payable to employees for $8,832 
B)  A debit to FICA tax payable for $768 
C)  A credit to FICA tax payable for $768 
D)  A credit to Salary expense for $8,832 
A)  A debit to Salary payable to employees for $8,832 
B)  A debit to FICA tax payable for $768 
C)  A credit to FICA tax payable for $768 
D)  A credit to Salary expense for $8,832

Question 9

A company has 24 employees who are paid on a monthly basis. For the most recent month, gross earnings were $78,000, of which $27,000 is subject to employment taxes. The federal unemployment tax rate is .8% and the state unemployment rate is 5.4%. Federal income taxes are withheld at the rate of 20% of total earnings. All earnings are subject to FICA taxes of 8%.
What is the company's total payroll cost for the month?

Accepted Answer

A)  $101,514 
B)  $ 85,914 
C)  $ 6,240 
D)  $ 78,000 
A)  $101,514 
B)  $ 85,914 
C)  $ 6,240 
D)  $ 78,000

Question 10

Which of the following is extra compensation that is not paid directly to employees, but paid to entities that provide various items or services to employees?

Accepted Answer

A)  Bonuses 
B)  Benefits 
C)  Wages 
D)  Commissions 
A)  Bonuses 
B)  Benefits 
C)  Wages 
D)  Commissions

Question 11

Which of the following amounts are included on an employee's W-2?

Accepted Answer

A)  Net pay for the employee 
B)  Number of exemptions claimed 
C)  Income taxes withheld 
D)  Unemployment taxes paid for the employee 
A)  Net pay for the employee 
B)  Number of exemptions claimed 
C)  Income taxes withheld 
D)  Unemployment taxes paid for the employee

Question 12

A company has been sued for product failures allegedly resulting in injuries to the individuals bringing the lawsuit. The company's lawyers believe it is probable that the lawsuit will result in an actual liability of approximately $100,000. Which of the following entries should be made?

Accepted Answer

A) 
$$\begin{array} { | l | l | l | l | } 
\hline \text { Loss on lawsuit } & & 100,000 & \
\hline & \begin{array} { l } 
\text { Estimated lawsuit loss } \
\text { payable }
\end{array} & & 100,000 \
\hline
\end{array}$$ 
B) 
$$\begin{array} { | l | l | l | l | } 
\hline \text { Cash } & & 100,000 & \
\hline & \text { Loss on lawsuit } & & 100,000 \
\hline
\end{array}$$ 
C) 
$$\begin{array} { | l | l | l | l | } 
\hline \begin{array} { l } 
\text { Estimated lawsuit loss } \
\text { payable }
\end{array} & & 100,000 & \
\hline & \text { Cash } & & 100,000 \
\hline
\end{array}$$ 
D) 
$$\begin{array} { | l | l | l | l | } 
\hline \text { Loss on lawsuit } & & 100,000 & \
\hline & \text { Cash } & & 100,000 \
\hline
\end{array}$$ 
A) 
$$\begin{array} { | l | l | l | l | } 
\hline \text { Loss on lawsuit } & & 100,000 & \
\hline & \begin{array} { l } 
\text { Estimated lawsuit loss } \
\text { payable }
\end{array} & & 100,000 \
\hline
\end{array}$$ 
B) 
$$\begin{array} { | l | l | l | l | } 
\hline \text { Cash } & & 100,000 & \
\hline & \text { Loss on lawsuit } & & 100,000 \
\hline
\end{array}$$ 
C) 
$$\begin{array} { | l | l | l | l | } 
\hline \begin{array} { l } 
\text { Estimated lawsuit loss } \
\text { payable }
\end{array} & & 100,000 & \
\hline & \text { Cash } & & 100,000 \
\hline
\end{array}$$ 
D) 
$$\begin{array} { | l | l | l | l | } 
\hline \text { Loss on lawsuit } & & 100,000 & \
\hline & \text { Cash } & & 100,000 \
\hline
\end{array}$$

Question 13

Which of the following would NOT be included in current liabilities?

Accepted Answer

A)  Earned revenues 
B)  Unearned revenues 
C)  Estimated liabilities 
D)  Accrued expenses 
A)  Earned revenues 
B)  Unearned revenues 
C)  Estimated liabilities 
D)  Accrued expenses

Question 14

The three payments made by employers for payroll include net pay to employees, payroll taxes and other payroll deductions, and employee benefits.

Accepted Answer

A) True 
 B)False

Question 15

RGF Manufacturing recently signed a $200,000, 138-day note on June 22. The interest rate is 5%. When will the note be due?

Accepted Answer

A)  November 8 
B)  November 5 
C)  November 7 
D)  November 6 
A)  November 8 
B)  November 5 
C)  November 7 
D)  November 6

Question 16

An employee's hourly rate is $25, with time-and-a-half for hours over 40 hours. FICA is withheld at the rate of 8%, federal income tax withholding is 15% and state income tax withholding is 3%. Which of the following is the employee's net pay if the employee worked 45 hours this week? Round to the nearest dollar.

Accepted Answer

A)  $ 914 
B)  $1,188 
C)  $1,093 
D)  $ 879 
A)  $ 914 
B)  $1,188 
C)  $1,093 
D)  $ 879

Question 17

Which of the following amounts would be included in the employer's entry to pay unemployment taxes?

Accepted Answer

A)  A debit to FICA taxes payable 
B)  A debit to Federal income taxes payable 
C)  A debit to Cash 
D)  A debit to Unemployment taxes payable 
A)  A debit to FICA taxes payable 
B)  A debit to Federal income taxes payable 
C)  A debit to Cash 
D)  A debit to Unemployment taxes payable

Question 18

Which of the following is NOT a component of a payroll system?

Accepted Answer

A)  Payroll sinking fund 
B)  Employee earnings record 
C)  Payroll bank account 
D)  Payroll record 
A)  Payroll sinking fund 
B)  Employee earnings record 
C)  Payroll bank account 
D)  Payroll record

Most companies pay employees with cash.

How do most employers pay employees?

Which of the following is the form filed with the IRS to report each employee's gross pay, federal income tax withheld, and FICA taxes withheld?

The employee earnings record is NEITHER a journal NOR a ledger.

Which of the following amounts are included on an employee's W-4?

Where would unemployment taxes withheld appear?

Dan Jones and Pat Smith are the only two employees of Lone Star Company. In January, 2009, Dan's gross pay was $4,400 and Pat's gross pay was $5,200. All earnings are subject to FICA taxes of 8%. Which of the following would be included in the entry to record the payroll for January?

Which of the following is extra compensation that is not paid directly to employees, but paid to entities that provide various items or services to employees?

Which of the following amounts are included on an employee's W-2?

A company has been sued for product failures allegedly resulting in injuries to the individuals bringing the lawsuit. The company's lawyers believe it is probable that the lawsuit will result in an actual liability of approximately $100,000. Which of the following entries should be made?

Which of the following would NOT be included in current liabilities?

The three payments made by employers for payroll include net pay to employees, payroll taxes and other payroll deductions, and employee benefits.

RGF Manufacturing recently signed a $200,000, 138-day note on June 22. The interest rate is 5%. When will the note be due?

Which of the following amounts would be included in the employer's entry to pay unemployment taxes?

Which of the following is NOT a component of a payroll system?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandising Inventory

Internal Control and Cash

Receivables

Plant Assets and Intangibles

Corporations: Paid-In Capital and the Balance Sheet

Corporations: Effects on Retained Earnings and the Income Statement

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Management Accounting

Job Order and Process Costing

Appendix: Process Costing

Activity-Based Costing and Other Cost Management Tools

Cost-Volume-Profit Analysis

Short-Term Business Decisions

Capital Investment Decisions and the Time Value of Money

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Performance Evaluation and the Balanced Scorecard

Filters

Exam 10: Current Liabilities, Payroll, and Long-Term Liabilities

Most companies pay employees with cash.

How do most employers pay employees?

Which of the following is the form filed with the IRS to report each employee's gross pay, federal income tax withheld, and FICA taxes withheld?

The employee earnings record is NEITHER a journal NOR a ledger.

Which of the following amounts are included on an employee's W-4?

Where would unemployment taxes withheld appear?

Dan Jones and Pat Smith are the only two employees of Lone Star Company. In January, 2009, Dan's gross pay was $4,400 and Pat's gross pay was $5,200. All earnings are subject to FICA taxes of 8%. Which of the following would be included in the entry to record the payroll for January?

Which of the following is extra compensation that is not paid directly to employees, but paid to entities that provide various items or services to employees?

Which of the following amounts are included on an employee's W-2?

A company has been sued for product failures allegedly resulting in injuries to the individuals bringing the lawsuit. The company's lawyers believe it is probable that the lawsuit will result in an actual liability of approximately $100,000. Which of the following entries should be made?

Which of the following would NOT be included in current liabilities?

The three payments made by employers for payroll include net pay to employees, payroll taxes and other payroll deductions, and employee benefits.

RGF Manufacturing recently signed a $200,000, 138-day note on June 22. The interest rate is 5%. When will the note be due?

Which of the following amounts would be included in the employer's entry to pay unemployment taxes?

Which of the following is NOT a component of a payroll system?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandising Inventory

Internal Control and Cash

Receivables

Plant Assets and Intangibles

Corporations: Paid-In Capital and the Balance Sheet

Corporations: Effects on Retained Earnings and the Income Statement

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Management Accounting

Job Order and Process Costing

Appendix: Process Costing

Activity-Based Costing and Other Cost Management Tools

Cost-Volume-Profit Analysis

Short-Term Business Decisions

Capital Investment Decisions and the Time Value of Money

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Performance Evaluation and the Balanced Scorecard

Filters