Question 1

The employer should record payroll deductions as:

Accepted Answer

A) Employee receivables 
B) Payroll taxes 
C) Current liabilities 
D) Wages payable 
E) Employee payables 
A) Employee receivables 
B) Payroll taxes 
C) Current liabilities 
D) Wages payable 
E) Employee payables

Question 2

Gross pay is:

Accepted Answer

A) Take-home pay. 
B) Total compensation earned by an employee before any deductions. 
C) Salaries after taxes are deducted. 
D) Deductions withheld by an employer. 
E) The amount of the paycheck. 
A) Take-home pay. 
B) Total compensation earned by an employee before any deductions. 
C) Salaries after taxes are deducted. 
D) Deductions withheld by an employer. 
E) The amount of the paycheck.

Question 3

A lawsuit is an example of a contingent liability for the defendant.

Accepted Answer

A) True 
 B)False

Question 4

Rambling Company has an employee whose total salary for the month of January totaled $20,000.The federal income tax rate for this employee is 15%,the FICA Social Security tax is 6.2%,and the FICA Medicare tax is 1.45%.How would the company accrue the January salaries expense and withholding of January taxes for this employee?

Accepted Answer

A) Debit Salaries Expense for $20,000,credit FICA-Social Security Taxes Payable for $1,240,credit FICA-Medicare Taxes Payable for $290,credit Employee Federal Income Taxes Payable for $3,000,and credit Salaries Payable for $15,470. 
B) Debit Salaries Expense for $20,000,credit FICA-Social Security Taxes Payable for $1,240,credit FICA-Medicare Taxes Payable for $290,credit Employee Federal Income Taxes Payable for $3,000,and credit Cash for $15,470. 
C) Debit Salaries Expense for $20,000 and credit Salaries Payable for $20,000. 
D) Debit Salaries Expense for $15,470 and credit Salaries Payable for $15,470. 
E) Debit Salaries Expense for $20,000,credit FICA-Social Security Taxes Expense for $1,240,credit FICA-Medicare Taxes Expense for $290,credit Employee Federal Income Taxes Expense for $3,000,and credit Cash for $15,470. 
A) Debit Salaries Expense for $20,000,credit FICA-Social Security Taxes Payable for $1,240,credit FICA-Medicare Taxes Payable for $290,credit Employee Federal Income Taxes Payable for $3,000,and credit Salaries Payable for $15,470. 
B) Debit Salaries Expense for $20,000,credit FICA-Social Security Taxes Payable for $1,240,credit FICA-Medicare Taxes Payable for $290,credit Employee Federal Income Taxes Payable for $3,000,and credit Cash for $15,470. 
C) Debit Salaries Expense for $20,000 and credit Salaries Payable for $20,000. 
D) Debit Salaries Expense for $15,470 and credit Salaries Payable for $15,470. 
E) Debit Salaries Expense for $20,000,credit FICA-Social Security Taxes Expense for $1,240,credit FICA-Medicare Taxes Expense for $290,credit Employee Federal Income Taxes Expense for $3,000,and credit Cash for $15,470.

Question 5

Each employee records the number of withholding allowances claimed on form W-4,the withholding allowance certificate that is filed with the employer.

Accepted Answer

A) True 
 B)False

Question 6

A company sells its product subject to a warranty that covers the cost of parts for repairs during the six months after the date of sale. Warranty costs are estimated to be 6% of sales. During the month of June, the company performed warranty work and used $12,000 worth of parts for the warranty repairs. The total sales for June were equal to $450,000. 
1. Record the warranty expense for the month of June. 
2. Record the costs of the warranty work completed in June. 
3. If the Estimated Warranty Liability account had a credit balance of $10,000 on May 31, what is the account balance at June 30?

Accepted Answer

1. @#IMG-DLM&_TB6947_00_TB6947_00_TB6947

Question 7

A company sells computers for $1,800 each.Each computer has a two-year warranty that covers replacement of defective parts.It is estimated that 2% of all computers sold will be returned under the warranty with an average cost of $150 each.During November,the company sold 30,000 computers;.400 computers were serviced under the warranty during November at a total cost of $55,000.The balance in the Estimated Warranty Liability account at November 1 was $29,000.What is the company's warranty expense for the month of November?

Accepted Answer

A) $26,000 
B) $45,000 
C) $55,000 
D) $60,000 
E) $90,000 
A) $26,000 
B) $45,000 
C) $55,000 
D) $60,000 
E) $90,000

Question 8

To compute the amount of tax withheld from an employee's pay,employers can use a _______________________________________________________ table.

Accepted Answer

wage brack

Question 9

Describe how to account for and report on contingent liabilities.

Accepted Answer

A contingent liability is an uncertain o

Question 10

Liabilities:

Accepted Answer

A) Must be certain. 
B) Must sometimes be estimated. 
C) Must be for a specific amount. 
D) Must always have a definite date for payment. 
E) Must involve an outflow of cash. 
A) Must be certain. 
B) Must sometimes be estimated. 
C) Must be for a specific amount. 
D) Must always have a definite date for payment. 
E) Must involve an outflow of cash.

Question 11

The state unemployment tax rates applied to an employer are adjusted according to an employer's merit rating.

Accepted Answer

A) True 
 B)False

Question 12

All expected future payments are liabilities.

Accepted Answer

A) True 
 B)False

Question 13

A company sells leaf blowers for $170 each.Each unit has a three-year warranty that covers replacement of defective parts.It is estimated that 4% of all leaf blowers sold will be returned under the warranty at an average cost of $30 each.During October,the company sold 400,000 leaf blowers; 800 leaf blowers were serviced under the warranty during October at a total cost of $25,000.The balance in the Estimated Warranty Liability account on October 1 was $12,500.What is the company's warranty expense for the month of October?

Accepted Answer

A) $24,000 
B) $25,000 
C) $37,500 
D) $467,500 
E) $480,000 
A) $24,000 
B) $25,000 
C) $37,500 
D) $467,500 
E) $480,000

Question 14

Mission Company has three employees:     
-What are Mission Company's total August payroll taxes for Cain?

Accepted Answer

A) $1,705.95 
B) $1,973.70 
C) $2,241.45 
D) $267.75 
E) $484.75 
A) $1,705.95 
B) $1,973.70 
C) $2,241.45 
D) $267.75 
E) $484.75

Question 15

A company had income before interest expense and income taxes of $176,000 and its interest expense is $55,000.Calculate the company's times interest earned ratio.

Accepted Answer

$176,000/$

Question 16

A company borrowed $60,000 on a 60-day,10% note payable from its bank.Compute the total cash payment at the note's maturity.

Accepted Answer

At maturity: $60,000

Question 17

A company's payroll for the week ended May 15 included earned salaries of $20,000.All of that week's pay is subject to FICA Social Security taxes of 6.2% and Medicare taxes of 1.45%.In addition,the company withholds the following amounts for this weekly pay period: $900 for medical insurance; $3,400 for federal income taxes; and $180 for union dues.
a.Prepare the general journal entry to accrue the payroll.
b.The company is subject to state unemployment taxes at the rate of 2% and federal unemployment taxes at the rate of 0.8%.By May 15,some employees had earned over $7,000,so only $9,000 of the $20,000 weekly gross pay was subject to unemployment tax.Prepare the general journal entry to accrue the employer's payroll tax expense.

Accepted Answer

@#IMG-DLM&_TB6947_00_TB6947_00

Question 18

DuPage Company agrees to pay an amount for medical insurance equal to $12,000 and contribute an additional 15% of the employees' $100,000 gross salary to a retirement program.How would the company record this transaction?

Accepted Answer

A) Debit Salaries Expense for $27,000,credit Employee Medical Insurance Payable for $12,000,and credit Employee Retirement Program Payable for $15,000. 
B) Debit Employee Medical Insurance Payable for $12,000,debit Employee Retirement Program Payable for $15,000,and credit Employee Benefits Expense for $27,000. 
C) Debit Employee Benefits Expense for $27,000,credit Employee Medical Insurance Payable for $12,000,and credit Employee Retirement Program Payable for $15,000. 
D) Debit Payroll Tax Expense for $27,000,credit Employee Medical Insurance Payable for $12,000,and credit Employee Retirement Program Payable for $15,000. 
E) Debit Salaries Expense for $27,000 and credit Salaries Payable for $27,000. 
A) Debit Salaries Expense for $27,000,credit Employee Medical Insurance Payable for $12,000,and credit Employee Retirement Program Payable for $15,000. 
B) Debit Employee Medical Insurance Payable for $12,000,debit Employee Retirement Program Payable for $15,000,and credit Employee Benefits Expense for $27,000. 
C) Debit Employee Benefits Expense for $27,000,credit Employee Medical Insurance Payable for $12,000,and credit Employee Retirement Program Payable for $15,000. 
D) Debit Payroll Tax Expense for $27,000,credit Employee Medical Insurance Payable for $12,000,and credit Employee Retirement Program Payable for $15,000. 
E) Debit Salaries Expense for $27,000 and credit Salaries Payable for $27,000.

Question 19

A special bank account used solely for the purpose of paying employees is created by depositing the amount of each employees' net pay into the account every pay period.This account is referred to as a(n):

Accepted Answer

A) Federal depository bank account. 
B) Employee's individual earnings account. 
C) Employees' bank account. 
D) Payroll register account. 
E) Payroll bank account. 
A) Federal depository bank account. 
B) Employee's individual earnings account. 
C) Employees' bank account. 
D) Payroll register account. 
E) Payroll bank account.

Question 20

A company's payroll information for the month of May follows:
   On May 31 the company issued Check No.335 payable to the Payroll Bank Account for the May payroll.It issued payroll checks to the employees after depositing the check.
(1) Prepare the journal entry to record (accrue) the employer's payroll for May.(2) Prepare the journal entry to pay for the May payroll.The federal and state unemployment tax rates are 0.8% and 5.4%,respectively,on the first $7,000 paid to each employee.The wages and salaries subject to these taxes were $6,000.(3) Prepare the journal entry to record the employer's payroll taxes.

Accepted Answer

@#IMG-DLM&_TB6947_00

The employer should record payroll deductions as:

Gross pay is:

A lawsuit is an example of a contingent liability for the defendant.

Each employee records the number of withholding allowances claimed on form W-4,the withholding allowance certificate that is filed with the employer.

To compute the amount of tax withheld from an employee's pay,employers can use a _______________________________________________________ table.

Describe how to account for and report on contingent liabilities.

Liabilities:

The state unemployment tax rates applied to an employer are adjusted according to an employer's merit rating.

All expected future payments are liabilities.

Mission Company has three employees: -What are Mission Company's total August payroll taxes for Cain?

A company had income before interest expense and income taxes of $176,000 and its interest expense is $55,000.Calculate the company's times interest earned ratio.

A company borrowed $60,000 on a 60-day,10% note payable from its bank.Compute the total cash payment at the note's maturity.

DuPage Company agrees to pay an amount for medical insurance equal to $12,000 and contribute an additional 15% of the employees' $100,000 gross salary to a retirement program.How would the company record this transaction?

A special bank account used solely for the purpose of paying employees is created by depositing the amount of each employees' net pay into the account every pay period.This account is referred to as a(n):

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters

Exam 9: Reporting and Analyzing Current Liabilities

The employer should record payroll deductions as:

Gross pay is:

A lawsuit is an example of a contingent liability for the defendant.

Each employee records the number of withholding allowances claimed on form W-4,the withholding allowance certificate that is filed with the employer.

To compute the amount of tax withheld from an employee's pay,employers can use a _______________________________________________________ table.

Describe how to account for and report on contingent liabilities.

Liabilities:

The state unemployment tax rates applied to an employer are adjusted according to an employer's merit rating.

All expected future payments are liabilities.

Mission Company has three employees: -What are Mission Company's total August payroll taxes for Cain?

A company had income before interest expense and income taxes of $176,000 and its interest expense is $55,000.Calculate the company's times interest earned ratio.

A company borrowed $60,000 on a 60-day,10% note payable from its bank.Compute the total cash payment at the note's maturity.

DuPage Company agrees to pay an amount for medical insurance equal to $12,000 and contribute an additional 15% of the employees' $100,000 gross salary to a retirement program.How would the company record this transaction?

A special bank account used solely for the purpose of paying employees is created by depositing the amount of each employees' net pay into the account every pay period.This account is referred to as a(n):

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Investments and International Operations

Accounting for Partnerships

Accounting With Special Journals

Filters