Question 1

Which of the following taxes has a ceiling on the amount of annual earnings subject to tax?

Accepted Answer

A) FICA-OASDI taxes 
B) sales tax 
C) federal income tax 
D) FICA-Medicare taxes 
A) FICA-OASDI taxes 
B) sales tax 
C) federal income tax 
D) FICA-Medicare taxes A

Question 2

Cycle Haven,Inc.offers warranties on all their bikes.They estimate warranty expense at 4.5% of sales.At the beginning of 2017,the Estimated Warranty Payable account had a credit balance of $2,200.During the year,Cycle Haven had $305,000 in sales and had to pay out $6,000 in warranty payments.How much Warranty Expense will be reported on the 2017 income statement?

Accepted Answer

A) $9,925 
B) $8,200 
C) $11,525 
D) $13,725 
A) $9,925 
B) $8,200 
C) $11,525 
D) $13,725 D

Question 3

Buffalo,Inc.reported sales revenue for 2017 of $911,000.The products were sold with a nine-month warranty.Members of Buffalo's management estimate that the cost of the warranty will be equal to 9% of sales revenue.Which of the following will be included in the entry to record the actual amounts paid out as a result of warranty claims?

Accepted Answer

A) a debit to Estimated Warranty Payable for the actual amount of payments 
B) a credit to Estimated Warranty Payable for $81,990 
C) a debit to Estimated Warranty Payable for $81,990 
D) a debit to Warranty Expense for the actual amount of payments 
A) a debit to Estimated Warranty Payable for the actual amount of payments 
B) a credit to Estimated Warranty Payable for $81,990 
C) a debit to Estimated Warranty Payable for $81,990 
D) a debit to Warranty Expense for the actual amount of payments A

Question 4

The employees of Royal Clothes achieved all of the sales goals for 2017.Royal decides to reward the employees with a bonus of 18% on annual net income,after deducting the bonus.The net income before the calculation of the bonus is $304,000.What is the amount of the bonus? (Round your final answer to the nearest dollar. )

Accepted Answer

A) $54,720 
B) $46,373 
C) $53,647 
D) $9,850 
A) $54,720 
B) $46,373 
C) $53,647 
D) $9,850

Question 5

Which of the following is required to be deducted from employees' paychecks?

Accepted Answer

A) federal income tax 
B) SUTA 
C) FUTA 
D) charitable contributions 
A) federal income tax 
B) SUTA 
C) FUTA 
D) charitable contributions

Question 6

Katie Pereira and Ferro Schwartz are employees of Free Star,Inc.In February 2017,Katie's gross pay was $8,500,and Ferro's gross pay was $10,900.All earnings are subject to FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%.Which of the following would be included in the entry to record the salaries expense for February?

Accepted Answer

A) a debit to Salaries Payable to employees for $1,202.80 
B) a debit to FICA-Medicare Taxes Payable for $1,202.80 
C) a credit to FICA-OASDI Taxes Payable for $1,202.80 
D) a credit to Salaries Expense for $1,202.80 
A) a debit to Salaries Payable to employees for $1,202.80 
B) a debit to FICA-Medicare Taxes Payable for $1,202.80 
C) a credit to FICA-OASDI Taxes Payable for $1,202.80 
D) a credit to Salaries Expense for $1,202.80

Question 7

Regarding gross and net pay,which of the following statements is correct?

Accepted Answer

A) Gross pay minus all deductions such as income tax withheld equals net pay. 
B) Net pay represents the total salaries and wages expense to the employer. 
C) For most businesses,gross pay equals net pay. 
D) Employers are required to deposit net pay into the employee's bank account. 
A) Gross pay minus all deductions such as income tax withheld equals net pay. 
B) Net pay represents the total salaries and wages expense to the employer. 
C) For most businesses,gross pay equals net pay. 
D) Employers are required to deposit net pay into the employee's bank account.

Question 8

Benefits are extra compensation-items that are not paid directly to an employee.

Accepted Answer

A) True 
 B)False

Question 9

Alex,an employee of Super Sunday,Inc. ,has gross salary for March of $5,400.The entire amount is under the OASDI limit of $117,000 and thus subject to FICA.The total amount of employee FICA tax is $826.20.(Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%. )

Accepted Answer

A) True 
 B)False

Question 10

Kevin,an employee of Sunbeam,Inc. ,has gross salary for May of $8,000.The entire amount is under the OASDI limit of $117,000 and thus subject to FICA.He is also subject to federal income tax at a rate of 20%.Which of the following is a part of the journal entry to record the disbursement of his net pay? (Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%. )

Accepted Answer

A) debit to Cash for $5,788.00 
B) credit to Cash for $5,788.00 
C) debit to Employee Income Tax Payable of $5,788.00 
D) debit to FICA Tax Payable of $5,788.00 
A) debit to Cash for $5,788.00 
B) credit to Cash for $5,788.00 
C) debit to Employee Income Tax Payable of $5,788.00 
D) debit to FICA Tax Payable of $5,788.00

Question 11

Database Services sells service plans for commercial computer maintenance.The price for each plan is $1,350 per year,paid in advance.On October 1,2017,a service plan was sold to a new customer for cash,and the plan covers the period October 1,2017 to September 30,2018.Prepare the December 31,2017 adjusting entry.

Accepted Answer

The answer of Database Services sells service plans for commercial...

Question 12

The matching principle requires businesses to record Warranty Expense when the warranty costs are incurred.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is the proper treatment for a contingency that is probable but the exact amount of which is not known? The amount can be estimated.

Accepted Answer

A) The liability should be doubled following conservatism. 
B) The liability should be estimated and recorded. 
C) The liability should be ignored. 
D) The liability should be reported in the notes to the financial statements. 
A) The liability should be doubled following conservatism. 
B) The liability should be estimated and recorded. 
C) The liability should be ignored. 
D) The liability should be reported in the notes to the financial statements.

Question 14

Berkley's gross pay for the month is $7,400.His deduction for federal income tax is based on a rate of 18%.He has no voluntary deductions.His yearly pay is under the limit for OASDI.What is Berkley's net pay? (Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%.Do not round any intermediate calculations,and round your final answer to the nearest dollar. )

Accepted Answer

A) $5,502 
B) $7,400 
C) $6,834 
D) $6,068 
A) $5,502 
B) $7,400 
C) $6,834 
D) $6,068

Question 15

Which of the following is a characteristic of a current liability?

Accepted Answer

A) It creates a present obligation for future payment of cash or services. 
B) It cannot be settled with services. 
C) It is an avoidable obligation. 
D) It occurs because of a future transaction or event. 
A) It creates a present obligation for future payment of cash or services. 
B) It cannot be settled with services. 
C) It is an avoidable obligation. 
D) It occurs because of a future transaction or event.

Question 16

Bergan Corp.has gross pay for March of $50,000.The journal entry to record salaries expense would include a debit to Salaries and Wages Payable for $50,000.

Accepted Answer

A) True 
 B)False

Question 17

Vacation,health,and pension benefits must be estimated and recorded as a liability.

Accepted Answer

A) True 
 B)False

Question 18

Medicare is a required column in a payroll register.

Accepted Answer

A) True 
 B)False

Question 19

Federal income taxes are ________.

Accepted Answer

A) deducted to arrive at an employee's gross pay 
B) added to arrive at an employee's net pay 
C) deducted to arrive at an employee's net pay 
D) not borne by the employee 
A) deducted to arrive at an employee's gross pay 
B) added to arrive at an employee's net pay 
C) deducted to arrive at an employee's net pay 
D) not borne by the employee

Question 20

Income taxes are withheld from the employee's paycheck.

Accepted Answer

A) True 
 B)False

Which of the following taxes has a ceiling on the amount of annual earnings subject to tax?

Which of the following is required to be deducted from employees' paychecks?

Regarding gross and net pay,which of the following statements is correct?

Benefits are extra compensation-items that are not paid directly to an employee.

Alex,an employee of Super Sunday,Inc. ,has gross salary for March of $5,400.The entire amount is under the OASDI limit of $117,000 and thus subject to FICA.The total amount of employee FICA tax is $826.20.(Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%. )

The matching principle requires businesses to record Warranty Expense when the warranty costs are incurred.

Which of the following is the proper treatment for a contingency that is probable but the exact amount of which is not known? The amount can be estimated.

Which of the following is a characteristic of a current liability?

Bergan Corp.has gross pay for March of $50,000.The journal entry to record salaries expense would include a debit to Salaries and Wages Payable for $50,000.

Vacation,health,and pension benefits must be estimated and recorded as a liability.

Medicare is a required column in a payroll register.

Federal income taxes are ________.

Income taxes are withheld from the employee's paycheck.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets, natural Resources, and Intangibles

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

Filters

Exam 11: Current Liabilities and Payroll

Which of the following taxes has a ceiling on the amount of annual earnings subject to tax?

Which of the following is required to be deducted from employees' paychecks?

Regarding gross and net pay,which of the following statements is correct?

Benefits are extra compensation-items that are not paid directly to an employee.

Alex,an employee of Super Sunday,Inc. ,has gross salary for March of $5,400.The entire amount is under the OASDI limit of $117,000 and thus subject to FICA.The total amount of employee FICA tax is $826.20.(Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%. )

The matching principle requires businesses to record Warranty Expense when the warranty costs are incurred.

Which of the following is the proper treatment for a contingency that is probable but the exact amount of which is not known? The amount can be estimated.

Which of the following is a characteristic of a current liability?

Bergan Corp.has gross pay for March of $50,000.The journal entry to record salaries expense would include a debit to Salaries and Wages Payable for $50,000.

Vacation,health,and pension benefits must be estimated and recorded as a liability.

Medicare is a required column in a payroll register.

Federal income taxes are ________.

Income taxes are withheld from the employee's paycheck.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets, natural Resources, and Intangibles

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

Filters