Question 1

The total compensation earned by an employee is called

Accepted Answer

A)  take-home pay. 
B)  net pay. 
C)  net earnings. 
D)  gross earnings. 
A)  take-home pay. 
B)  net pay. 
C)  net earnings. 
D)  gross earnings.

Question 2

Which one of the following payroll taxes does not result in a payroll tax expense for the employer?

Accepted Answer

A)  FICA tax 
B)  Federal income tax 
C)  Federal unemployment tax 
D)  State unemployment tax 
A)  FICA tax 
B)  Federal income tax 
C)  Federal unemployment tax 
D)  State unemployment tax

Question 3

Koppernaes Company has total proceeds (before segregation of sales taxes) from sales of $9540. If the sales tax is 6% the amount to be credited to the account Sales Revenue is:

Accepted Answer

A)  $9540. 
B)  $8968. 
C)  $10112. 
D)  $9000. 
A)  $9540. 
B)  $8968. 
C)  $10112. 
D)  $9000.

Question 4

The interest charged on a $100000 note payable at the rate of 6% on a 2-month note would be

Accepted Answer

A)  $6000. 
B)  $3000. 
C)  $1500. 
D)  $1000. 
A)  $6000. 
B)  $3000. 
C)  $1500. 
D)  $1000.

Question 5

A note payable must always be paid before an account payable.

Accepted Answer

A) True 
 B)False

Question 6

Assume that the payroll records of Klein Oil Company provided the following information for the weekly payroll ended November 30 2017.
Additional information: All employees are paid overtime at time and a half for hours worked in excess of 40 per week. The FICA tax rate is 7.65% for the first $117000 of each employee's annual earnings. The employer pays unemployment taxes of 6.2% (5.4% for state and .8% for federal) on the first $7000 of each employee's annual earnings.
Instructions
(a) Prepare the payroll register for the pay period.
(b) Prepare general journal entries to record the payroll and payroll taxes.

Accepted Answer

The answer of Assume that the payroll records of Klein...

Question 7

Lulzbot.com sells 6000 units of its product for $500 each during the year ending December 31 2017. The selling price includes a one-year warranty on parts. It is expected that 3% of the units will be defective and that repair costs will average $50 per unit. In the year of sale warranty contracts are honored on 120 units for a total cost of $6000. What amount will be reported on Lulzbot.com's balance sheet as Warranty Liability on December 31 2017?

Accepted Answer

A)  $6000 
B)  $9000 
C)  $3000 
D)  It cannot be determined. 
A)  $6000 
B)  $9000 
C)  $3000 
D)  It cannot be determined.

Question 8

Post-retirement benefits consist of payments by employers to retired employees for health care life insurance and pensions.

Accepted Answer

A) True 
 B)False

Question 9

An employee's net pay consists of gross pay less mandatory and voluntary payroll deductions. Identify the mandatory payroll deductions and give two or three examples of common voluntary deductions. Are these deductions recognized as payroll expenses by the employer? What type of payroll expenses does the employer incur related to having a payroll?

Accepted Answer

Mandatory payroll deductions include bot

Question 10

On October 1 Eli's Carpet Service borrows $125000 from First National Bank on a 3-month $125000 8% note. The entry by Eli's Carpet Service to record payment of the note and accrued interest on January a. 
$\begin{array}{lrr}
  \text {Notes Payable  } &127,500\
 \text {  Cash } &&127,500\
\end{array}$

b. 
$\begin{array}{lrr}
  \text { Notes Payable } &125,000\
 \text {  Interest Payable} &2,500\
 \text {   Cash} &&127,500
\end{array}$

c.
$\begin{array}{lrr}
  \text {Notes Payable  } &125,000\
 \text {  Interest Payable} &10,000\
 \text { Cash  } &&135,000
\end{array}$

d.
$\begin{array}{lrr}
  \text {  Notes Payable} &125,000\
 \text { Interest Expense  } &2,500\
 \text {  Cash } &&127,500
\end{array}$

Accepted Answer

The answer of On October 1 Eli's Carpet Service borrows...

Question 11

An employer's estimated cost for post-retirement benefits for its employees should be

Accepted Answer

A)  recognized as an expense when paid. 
B)  recognized as an expense during the employees' work years. 
C)  recognized as an expense during the employees' retirement years. 
D)  charged to the goodwill account because providing employees with benefits generates employee goodwill. 
A)  recognized as an expense when paid. 
B)  recognized as an expense during the employees' work years. 
C)  recognized as an expense during the employees' retirement years. 
D)  charged to the goodwill account because providing employees with benefits generates employee goodwill.

Question 12

Sonoma Company has the following selected accounts after posting adjusting entries: $\begin{array}{lr}
\text { Accounts Payable } & \$ 6,000 \
\text { Notes Payable, 3-month } & 40,000 \
\text { Accumulated Depreciation-Equipment } & 14,000 \
\text { Notes Payable, 5-year, 6\% } & 80,000 \
\text { Payroll Tax Expense } & 4,000 \
\text { Interest Payable } & 3,000 \
\text { Mortgage Payable } & 120,000 \
\text { Sales Taxes Payable } & 38,000
\end{array}$ Instructions
Prepare the current liability section of Sonoma Company's balance sheet assuming $16000 of the mortgage is payable next year.

Accepted Answer

None

Question 13

Blalock Company sells products with a 2-year warranty. Past experience indicates that 2% of the units sold will be returned during the warranty period for repairs. The average cost of repairs under warranty is estimated to be $75 per unit. During 2014 7000 units were sold at an average price of $400. During the year repairs were made on 55 units at a cost of $3600.
Instructions
Prepare journal entries to record the repairs made under warranty and estimated warranty expense for the year.

Accepted Answer

None

Question 14

A contingent liability is a liability that may occur if some future event takes place.

Accepted Answer

A) True 
 B)False

Question 15

Prepare the necessary journal entries for the following transactions:
(a) On September 1 Draper Company borrowed $180000 from Dixion County Bank on a 6-month 8% note.
(b) On December 31 Draper Company accrued interest (assume adjusting entries are only made at the end of the year).

Accepted Answer

None

Question 16

The journal entry to record the payroll for a period will include a credit to Salaries and Wages Payable for the gross

Accepted Answer

A)  amount less all payroll deductions. 
B)  amount of all paychecks issued. 
C)  pay less taxes payable. 
D)  pay less voluntary deductions. 
A)  amount less all payroll deductions. 
B)  amount of all paychecks issued. 
C)  pay less taxes payable. 
D)  pay less voluntary deductions.

Question 17

By January 31 following the end of a calendar year an employer is required to provide each employee with a(n)

Accepted Answer

A)  state unemployment tax form. 
B)  federal unemployment tax form 940. 
C)  wage and tax statement form W-2. 
D)  employee's withholding allowance certificate form W-4. 
A)  state unemployment tax form. 
B)  federal unemployment tax form 940. 
C)  wage and tax statement form W-2. 
D)  employee's withholding allowance certificate form W-4.

Question 18

Back Cove Yacht Company billed its customers a total of $1575000 for the month of November. The total includes a 5% state sales tax.
Instructions
(a) Determine the proper amount of revenue to report for the month.
(b) Prepare the general journal entry to record the revenue and related liabilities for the month.

Accepted Answer

(a) $1575000 ÷ 1.05 = $1500000 is the to

Question 19

The current ratio is

Accepted Answer

A)  current assets plus current liabilities. 
B)  current assets minus current liabilities. 
C)  current assets divided by current liabilities. 
D)  current assets multiplied by current liabilities. 
A)  current assets plus current liabilities. 
B)  current assets minus current liabilities. 
C)  current assets divided by current liabilities. 
D)  current assets multiplied by current liabilities.

Question 20

The treasurer's department is responsible for

Accepted Answer

A)  approving the payroll. 
B)  maintaining payroll records. 
C)  preparing payroll tax returns. 
D)  signing payroll checks. 
A)  approving the payroll. 
B)  maintaining payroll records. 
C)  preparing payroll tax returns. 
D)  signing payroll checks.

The total compensation earned by an employee is called

Which one of the following payroll taxes does not result in a payroll tax expense for the employer?

Koppernaes Company has total proceeds (before segregation of sales taxes) from sales of $9540. If the sales tax is 6% the amount to be credited to the account Sales Revenue is:

The interest charged on a $100000 note payable at the rate of 6% on a 2-month note would be

A note payable must always be paid before an account payable.

Post-retirement benefits consist of payments by employers to retired employees for health care life insurance and pensions.

An employer's estimated cost for post-retirement benefits for its employees should be

A contingent liability is a liability that may occur if some future event takes place.

Prepare the necessary journal entries for the following transactions: (a) On September 1 Draper Company borrowed $180000 from Dixion County Bank on a 6-month 8% note. (b) On December 31 Draper Company accrued interest (assume adjusting entries are only made at the end of the year).

The journal entry to record the payroll for a period will include a credit to Salaries and Wages Payable for the gross

By January 31 following the end of a calendar year an employer is required to provide each employee with a(n)

The current ratio is

The treasurer's department is responsible for

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting Information Systems

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Accounting for Partnerships

Corporations: Organization and Capital Stock Transactions

Corporations: Dividends, Retained Earnings, and Income Reporting

Long-Term Liabilities

Investments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Incremental Analysis and Capital Budgeting

Time Value of Money

Filters

Exam 11: Current Liabilities and Payroll Accounting

The total compensation earned by an employee is called

Which one of the following payroll taxes does not result in a payroll tax expense for the employer?

Koppernaes Company has total proceeds (before segregation of sales taxes) from sales of $9540. If the sales tax is 6% the amount to be credited to the account Sales Revenue is:

The interest charged on a $100000 note payable at the rate of 6% on a 2-month note would be

A note payable must always be paid before an account payable.

Post-retirement benefits consist of payments by employers to retired employees for health care life insurance and pensions.

An employer's estimated cost for post-retirement benefits for its employees should be

A contingent liability is a liability that may occur if some future event takes place.

Prepare the necessary journal entries for the following transactions: (a) On September 1 Draper Company borrowed $180000 from Dixion County Bank on a 6-month 8% note. (b) On December 31 Draper Company accrued interest (assume adjusting entries are only made at the end of the year).

The journal entry to record the payroll for a period will include a credit to Salaries and Wages Payable for the gross

By January 31 following the end of a calendar year an employer is required to provide each employee with a(n)

The current ratio is

The treasurer's department is responsible for

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting Information Systems

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Accounting for Partnerships

Corporations: Organization and Capital Stock Transactions

Corporations: Dividends, Retained Earnings, and Income Reporting

Long-Term Liabilities

Investments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Incremental Analysis and Capital Budgeting

Time Value of Money

Filters