Question 1

Company profitability decreases in direct proportion to the payroll expenses.Why?

Accepted Answer

A)  Because payroll represents a liability and an expense of the business. The higher payroll expenses are, the lower the profitability will be. 
B)  Because payroll represents an asset and an income of the business. The higher payroll income are, the higher the profitability will be. 
C)  Because payroll represents a liability and an expense of the business. The lower payroll expenses are, the lower the profitability will be. 
D)  Because payroll represents an asset and an income of the business. The lower the payroll expenses are, the higher the profitability will be.

Question 2

The payroll register is annotated at the top with ______________________________________.

Accepted Answer

A)  the employee's name, social security number, and address 
B)  the name of the firm and the payroll accountant 
C)  the beginning and ending dates of the pay period 
D)  the total gross pay, deductions, and net pay during the period

Question 3

McHale Enterprises has the following incomplete General Journal entry for the most recent pay date: What is the amount of the 401(k) contributions for the pay date?
$$\begin{array} { | l | l | l | r | r | r | } 
\hline \text { Oct } & 27 & \text { Wages and salaries expense } & 522 & \$ 298,384.00 & \
\hline & & \text { Federal withholding tax payable } & 220 & & \$ 50725.28 \
\hline & & \text { 5ocial Security tax payable } & 221 & & 17,980.56 \
\hline & & \text { Medicare tax payable } & 222 & & 4,205.13 \
\hline & & 401 ( k ) \text { contributions payable } & 223 & & ? ? ? \
\hline & & \text { Health Insurance payable } & 224 & & 8375.00 \
\hline & & \text { Savings bonds payable } & 227 & & 1,850.00 \
\hline & & \text { Wages and salaries payable } & 226 & & 202,671.98 \
\hline&&&&\
\hline \text { Oct } & 27 & \text { Wages and salaries payable } & 226 & 202,671.98 & \
\hline & & \text { Cash } & 101 & & 202,671.98 \
\hline
\end{array}$$

Accepted Answer

A)  $2,253.00 
B)  $15,298.22 
C)  $12,576.05 
D)  $9,215.38

Question 4

Besides containing the supporting data for periodic tax reports,the employee earnings record serves as a backup in the event of computer failure.

Accepted Answer

A) True 
 B)False

Question 5

In the General Ledger,the left-hand debit/credit columns reflect the balance of the account.

Accepted Answer

A) True 
 B)False

Question 6

Besides payroll information,the payroll register contains _________________________________.

Accepted Answer

A)  information about the firm's liabilities 
B)  tax remittance information 
C)  proof of payroll deposits 
D)  the firm's payroll checking account information

Question 7

Which of the following items would not appear as a column on a payroll register?

Accepted Answer

A)  Hiring date 
B)  Marital status 
C)  Number of withholding allowances 
D)  Hours worked

Question 8

If a firm accrues the payroll due but not paid at the end of a financial period,what should it do on the first day of the next financial period?

Accepted Answer

A)  It should create a reversing entry in the General Journal. 
B)  It should disburse the accrued pay to the employees. 
C)  It should create a reminder about the accrual to ensure accuracy of computations on the next pay date. 
D)  It should make a note to create the reversing entry at the end of the next financial period.

Question 9

A debit always decreases the balance of an account.

Accepted Answer

A) True 
 B)False

Question 10

It is important that the payroll accountant understand the flow of the payroll transactions,especially when working with ______________.

Accepted Answer

A)  The payroll register 
B)  The employee earnings record 
C)  Accounting software packages 
D)  Payroll tax reports

Question 11

Didier and Sons had the following employer's share payroll tax general journal entry for the May 5 pay date: $$\begin{array} { | l | r | l | r | r | r | } 
\hline \text { May } & 5 & \text { Payroll Taxes Expense } & & \$ 27,671.87 & \
\hline & & \text { Social Searity taxpayable } & & & ? ? ? \
\hline & & \text { Medicare tax payable } & & & 3,197.15 \
\hline & & \text { FUTA tax payable } & & & 1322.96 \
\hline & & \text { 5UTA taxpayable } & & & 9,481.20 \
\hline
\end{array}$$ What is the amount of the Social Security tax payable?

Accepted Answer

A)  $24,572.59 
B)  $11,875.98 
C)  $17,582.39 
D)  $13,670.56

Question 12

Which of the following is an example of a liability account?

Accepted Answer

A)  Cash 
B)  Owners' Capital 
C)  Salaries Payable 
D)  Wages Expense

Question 13

In which order are transactions listed in the General Journal?

Accepted Answer

A)  Alphabetically 
B)  Order of importance 
C)  Numerically 
D)  Chronologically

Question 14

How does a debit balance in the wages and salaries expense account affect a firm's income statement?

Accepted Answer

A)  A debit balance will increase the expenses of the firm's income statement. This will increase the total expenses of the firm and decrease the net income of the firm. 
B)  A debit balance will decrease the expenses of the firm's income statement. This will increase the total incomes of the firm and decrease the net income of the firm. 
C)  A debit balance will increase the expenses of the firm's income statement. This will decrease the total expenses of the firm and increase the net income of the firm. 
D)  A debit balance will increase the income of the firm's income statement. This will increase the total expenses of the firm and increase the net income of the firm.

Question 15

Which of these accounts is not increased by a credit?

Accepted Answer

A)  Owners' capital 
B)  Revenue 
C)  Liabilities 
D)  Expenses

Question 16

Dooley Publishing has the following payroll data for its July 1 pay date: How much Federal withholding tax was deducted from employees' pay?
$$\begin{array} { | l | l | l | c | r | r | } 
\hline \text { Jul } & 1 & \text { Wages and salaries expense } & 522 & \$ \quad 182,930.00 & \
\hline & & \text { Federal withholding taxpayable } & 220 & & \$ ? ? ? \
\hline & & \text { Social Security tax payable } & 221 & & 10,517.12 \
\hline & & \text { Medicare tax payable } & 222 & & 2,459.65 \
\hline & &401 ( k ) \text { contributions payable } & 223 & & 6402.55 \
\hline & &\text { Health Insurance payable } & 224 & & 13,299.01 \
\hline & &\text { Union Dues payable } & 227 & & 4,573.25 \
\hline & & \text { Wages and salaries payable } & 226 & & 113,562.94 \
\hline & & & & \
\hline \text { Jul } & 1 & \text { Wages and salaries payable } & 226 & 113,562.94 & \
\hline & & \text { Cash } & 101 & & 113,562.94 \
\hline
\end{array}$$

Accepted Answer

A)  $15,203.14 
B)  $42,083.87 
C)  $32,115.48 
D)  $29,391.98

Question 17

In what order are accounts presented on the trial balance?

Accepted Answer

A)  By dollar amount 
B)  Alphabetically 
C)  The same as the chart of accounts 
D)  By order of importance

Question 18

What is true about the trial balance?

Accepted Answer

A)  It contains a detailed listing of every transaction during a period. 
B)  It may contain whatever accounts the accountant wishes to include. 
C)  Payroll accounts do not appear on it because of their changeable nature. 
D)  The total of the debits must equal the total of the credits.

Question 19

What effect do payroll entries have on a firm's accounting system?

Accepted Answer

A)  They increase the firm's assets. 
B)  They reduce the firm's liabilities. 
C)  They increase the owners' equity. 
D)  They increase the firm's expenses.

Question 20

Which of the following payroll items is included on the Balance Sheet?

Accepted Answer

A)  Health insurance expense 
B)  Salaries and wages expense 
C)  Federal withholding tax payable 
D)  Payroll taxes expense

Exam 6: Payroll Register, Employee Earning Records, and Accounting System Entries

Company profitability decreases in direct proportion to the payroll expenses.Why?

The payroll register is annotated at the top with ______________________________________.

Besides containing the supporting data for periodic tax reports,the employee earnings record serves as a backup in the event of computer failure.

In the General Ledger,the left-hand debit/credit columns reflect the balance of the account.

Besides payroll information,the payroll register contains _________________________________.

Which of the following items would not appear as a column on a payroll register?

If a firm accrues the payroll due but not paid at the end of a financial period,what should it do on the first day of the next financial period?

A debit always decreases the balance of an account.

It is important that the payroll accountant understand the flow of the payroll transactions,especially when working with ______________.

Which of the following is an example of a liability account?

In which order are transactions listed in the General Journal?

How does a debit balance in the wages and salaries expense account affect a firm's income statement?

Which of these accounts is not increased by a credit?

In what order are accounts presented on the trial balance?

What is true about the trial balance?

What effect do payroll entries have on a firm's accounting system?

Which of the following payroll items is included on the Balance Sheet?