Question 1

The total earnings of an employee for a payroll period is referred to as

Accepted Answer

A) take-home pay 
B) pay net of taxes 
C) net pay 
D) gross pay 
A) take-home pay 
B) pay net of taxes 
C) net pay 
D) gross pay D

Question 2

One of the more popular defined contribution plans is the 401k plan.

Accepted Answer

A) True 
 B)False  True

Question 3

Taxes deducted from an employee's earnings to finance social security and Medicare benefits are called FICA taxes.

Accepted Answer

A) True 
 B)False  True

Question 4

Which of the following would most likely be classified as a current liability?

Accepted Answer

A) Two-year Notes Payable 
B) Bonds Payable 
C) Mortgage Payable 
D) Unearned Rent 
A) Two-year Notes Payable 
B) Bonds Payable 
C) Mortgage Payable 
D) Unearned Rent

Question 5

Like many taxes deducted from employee earnings,federal income taxes are subject to a maximum amount per employee per year.

Accepted Answer

A) True 
 B)False

Question 6

Payroll taxes levied against employers become an employer liability at the time the employee wages are incurred.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is not an internal control procedure for payroll?

Accepted Answer

A) observe clocking in and out time for the employees 
B) payroll depends on a fired employee's supervisor to notify them when an employee has been fired 
C) payroll requires employees to show identification when picking up their paychecks 
D) changes in pay rates on a computerized system must be tested by someone independent of payroll 
A) observe clocking in and out time for the employees 
B) payroll depends on a fired employee's supervisor to notify them when an employee has been fired 
C) payroll requires employees to show identification when picking up their paychecks 
D) changes in pay rates on a computerized system must be tested by someone independent of payroll

Question 8

Mobile Sales has five sales employees which receive weekly paychecks.Each earns $11.50 per hour and each has worked 40 hours in the pay period.Each employee pays 12% of gross in Federal Income Tax,3% in State Income Tax,6% of gross in Social Security Tax,1.5% of gross in Medicare Tax,and 1/2% in State Disability Insurance.Journalize the recognition the pay period ending January 19th which will be paid to the employees January 26th.(Keep in mind that none of the employees is subject to a ceiling amount for social security. )

Accepted Answer

The answer of Mobile Sales has five sales employees which...

Question 9

Prior to the last weekly payroll period of the calendar year,the cumulative earnings of employees A and B are $99,350 and $91,000 respectively.Their earnings for the last completed payroll period of the year are $850 each.The maximum amount of earnings subject to social security tax at 6% is $100,000.All earnings are subject to Medicare tax of 1.5%.Assuming that the payroll will be paid on December 29,what will be the employer's total FICA tax for this payroll period on the two salary amounts of $850 each?

Accepted Answer

A) $127.50 
B) $115.50 
C) $112.50 
D) $0 
A) $127.50 
B) $115.50 
C) $112.50 
D) $0

Question 10

Use the following information to answer the following questions.
Assuming no employees are subject to ceilings for their earnings,Jensen Company has the following information for the pay period of January 15 - 31,20xx.
 
Assuming that all wages are subject to federal and state unemployment taxes,the Payroll Taxes Expense would be recorded as:

Accepted Answer

A) $1,370 
B) $750 
C) $620 
D) $2,870 
A) $1,370 
B) $750 
C) $620 
D) $2,870

Question 11

The cost of a product warranty should be included as an expense in the

Accepted Answer

A) period the cash is collected for a product sold on account 
B) future period when the cost of repairing the product is paid 
C) period of the sale of the product 
D) future period when the product is repaired or replaced 
A) period the cash is collected for a product sold on account 
B) future period when the cost of repairing the product is paid 
C) period of the sale of the product 
D) future period when the product is repaired or replaced

Question 12

Which of the following is the most desirable quick ratio?

Accepted Answer

A) 1.20 
B) 1.00 
C) 0.95 
D) 0.50 
A) 1.20 
B) 1.00 
C) 0.95 
D) 0.50

Question 13

Which of the following are included in the employer's payroll taxes?

Accepted Answer

A) SUTA taxes 
B) FUTA taxes 
C) FICA taxes 
D) all of the above 
A) SUTA taxes 
B) FUTA taxes 
C) FICA taxes 
D) all of the above

Question 14

Grayson Bank agrees to lend the Trust Company $120,000 on January 1.Trust Company signs a $120,000,8%,9-month note.The entry made by Trust Company on January 1 to record the proceeds and issuance of the note is:

Accepted Answer

A) Interest Expense 9,600 Cash 110,400
Notes Payable 120,000 
B) Cash 120,000 Notes Payable 120,000 
C) Cash 129,600 Interest Expense 9,600
Notes Payable 120,000 
D) Notes Payable 120,000 Interest Payable 7,200
Cash 120,000
Interest Expense 7,200 
A) Interest Expense 9,600 Cash 110,400
Notes Payable 120,000 
B) Cash 120,000 Notes Payable 120,000 
C) Cash 129,600 Interest Expense 9,600
Notes Payable 120,000 
D) Notes Payable 120,000 Interest Payable 7,200
Cash 120,000
Interest Expense 7,200

Question 15

During May,Blast sold 650 portable CD players for $50 each.Each CD player cost Blast $25 to purchase and carried a one-year warranty.If 10 percent of the goods sold typically need to be replaced over the warranty period,what amount should Blast debit Product Warranty Expense for in May?

Accepted Answer

A) $3,250 
B) $1,625 
C) $ 650 
D) $1,300 
A) $3,250 
B) $1,625 
C) $ 650 
D) $1,300

Question 16

Another name for the quick ratio is

Accepted Answer

A) quick cash ratio 
B) current ratio 
C) working capital ratio 
D) acid-test ratio 
A) quick cash ratio 
B) current ratio 
C) working capital ratio 
D) acid-test ratio

Question 17

Assuming no employees are subject to ceilings for their earnings,Moore Company has the following information for the pay period of December 15 - 31,20xx.
 
Salaries Payable would be recorded for

Accepted Answer

A) $16,000 
B) $ 9,808 
C) $10,800 
D) $11,040 
A) $16,000 
B) $ 9,808 
C) $10,800 
D) $11,040

Question 18

Internal controls for cash payments also apply to payrolls.

Accepted Answer

A) True 
 B)False

Question 19

Assuming a 360-day year,proceeds of $48,750 were received from discounting a $50,000,90-day note at a bank.The discount rate used by the bank in computing the proceeds was

Accepted Answer

A) 6.25% 
B) 10.00% 
C) 10.26% 
D) 9.75% 
A) 6.25% 
B) 10.00% 
C) 10.26% 
D) 9.75%

Question 20

The following totals for the month of April were taken from the payroll register of Magnum Company.
 
The entry to record accrual of employer's payroll taxes would include a

Accepted Answer

A) debit to Payroll Tax Expense for $1,170 
B) debit to FICA Taxes Payable for $1,500 
C) credit to Payroll Tax Expense for $420 
D) debit to Payroll Tax Expense for $1,620 
A) debit to Payroll Tax Expense for $1,170 
B) debit to FICA Taxes Payable for $1,500 
C) credit to Payroll Tax Expense for $420 
D) debit to Payroll Tax Expense for $1,620

The total earnings of an employee for a payroll period is referred to as

One of the more popular defined contribution plans is the 401k plan.

Taxes deducted from an employee's earnings to finance social security and Medicare benefits are called FICA taxes.

Which of the following would most likely be classified as a current liability?

Like many taxes deducted from employee earnings,federal income taxes are subject to a maximum amount per employee per year.

Payroll taxes levied against employers become an employer liability at the time the employee wages are incurred.

Which of the following is not an internal control procedure for payroll?

The cost of a product warranty should be included as an expense in the

Which of the following is the most desirable quick ratio?

Which of the following are included in the employer's payroll taxes?

Grayson Bank agrees to lend the Trust Company $120,000 on January 1.Trust Company signs a $120,000,8%,9-month note.The entry made by Trust Company on January 1 to record the proceeds and issuance of the note is:

During May,Blast sold 650 portable CD players for $50 each.Each CD player cost Blast $25 to purchase and carried a one-year warranty.If 10 percent of the goods sold typically need to be replaced over the warranty period,what amount should Blast debit Product Warranty Expense for in May?

Another name for the quick ratio is

Assuming no employees are subject to ceilings for their earnings,Moore Company has the following information for the pay period of December 15 - 31,20xx. Salaries Payable would be recorded for

Internal controls for cash payments also apply to payrolls.

Assuming a 360-day year,proceeds of $48,750 were received from discounting a $50,000,90-day note at a bank.The discount rate used by the bank in computing the proceeds was

The following totals for the month of April were taken from the payroll register of Magnum Company. The entry to record accrual of employer's payroll taxes would include a

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Corporations: Organization, stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

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Exam 10: Current Liabilities and Payroll

The total earnings of an employee for a payroll period is referred to as

One of the more popular defined contribution plans is the 401k plan.

Taxes deducted from an employee's earnings to finance social security and Medicare benefits are called FICA taxes.

Which of the following would most likely be classified as a current liability?

Like many taxes deducted from employee earnings,federal income taxes are subject to a maximum amount per employee per year.

Payroll taxes levied against employers become an employer liability at the time the employee wages are incurred.

Which of the following is not an internal control procedure for payroll?

The cost of a product warranty should be included as an expense in the

Which of the following is the most desirable quick ratio?

Which of the following are included in the employer's payroll taxes?

Grayson Bank agrees to lend the Trust Company $120,000 on January 1.Trust Company signs a $120,000,8%,9-month note.The entry made by Trust Company on January 1 to record the proceeds and issuance of the note is:

During May,Blast sold 650 portable CD players for $50 each.Each CD player cost Blast $25 to purchase and carried a one-year warranty.If 10 percent of the goods sold typically need to be replaced over the warranty period,what amount should Blast debit Product Warranty Expense for in May?

Another name for the quick ratio is

Assuming no employees are subject to ceilings for their earnings,Moore Company has the following information for the pay period of December 15 - 31,20xx. Salaries Payable would be recorded for

Internal controls for cash payments also apply to payrolls.

Assuming a 360-day year,proceeds of $48,750 were received from discounting a $50,000,90-day note at a bank.The discount rate used by the bank in computing the proceeds was

The following totals for the month of April were taken from the payroll register of Magnum Company. The entry to record accrual of employer's payroll taxes would include a

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Corporations: Organization, stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

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