Exam 11: Current Liabilities and Payroll Accounting

The objectives of internal accounting control for payrolls are (a) to safeguard company assets from unauthorized payments of payrolls and (b) to assure accuracy and reliability of the accounting records pertaining to payroll.

A cash register tape shows cash sales of $1,500 and sales taxes of $120. The journal entry to record this information is

Ed's Bookstore has collected $750 in sales taxes during April. If sales taxes must be remitted to the state government monthly, what entry will Ed's Bookstore make to show the April remittance?

Cindy Morrow's regular hourly wage rate is $12, and she receives a wage of 1 1/2 times her regular rate for work in excess of 40 hours. During a June pay period, Cindy worked 46 hours. Cindy's federal income tax withholding is $58, and her only voluntary deduction is $25 for group hospitalization insurance. Instructions Compute Cindy's (a) gross earnings and (b) net pay for the pay period.

The total compensation earned by an employee is called

On October 1, Steve's Carpet Service borrows $250,000 from First National Bank on a 3-month, $250,000, 8% note. The entry by Steve's Carpet Service to record payment of the note and accrued interest on January 1 is

A company whose current liabilities exceed its current assets may have a liquidity problem.

On October 1, 2010, Pennington Company issued a $40,000, 10%, nine-month interest-bearing note. Assuming interest was accrued in June 30, 2011, the entry to record the payment of the note on July 1, 2011, will include a:

The current portion of long-term debt should

Employer payroll taxes include all of the following except

Kingery Sales Company has the following selected accounts after posting adjusting entries: Instructions Prepare the current liability section of Kingery Sales Company's balance sheet, assuming $20,000 of the mortgage is payable next year.

Which one of the following payroll taxes is not withheld from an employee's wages because it is not levied on the employee?

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

On September 1, Joe's Painting Service borrows $50,000 from National Bank on a 4-month, $50,000, 6% note. What entry must Joe's Painting Service make on December 31 before financial statements are prepared?

From a liquidity standpoint, it is more desirable for a company to have current

The following totals for the month of June were taken from the payroll register of Ford Company. The journal entry to record the monthly payroll on June 30 would include a

On March 1, Jordan Company borrows $90,000 from Ottawa State Bank by signing a 6-month, 8%, interest-bearing note. Instructions Prepare the necessary entries below associated with the note payable on the books of Jordan Company. (a) Prepare the entry on March 1 when the note was issued. (b) Prepare any adjusting entries necessary on June 30 in order to prepare the semi-annual financial statements. Assume no other interest accrual entries have been made. (c) Prepare the adjusting entry at August 31 to accrue interest. (d) Prepare the entry to record payment of the note at maturity.

Payroll activities involve three functions: hiring employees, preparing the payroll, and paying the payroll.

Putman Company had cash sales of $54,250 (including taxes) for the month of June. Sales are subject to 8.5% sales tax. Prepare the entry to record the sale.

The interest charged on a $100,000 note payable, at the rate of 6%, on a 60-day note would be