Question 1

State unemployment compensation tax (SUTA)is paid by the employer and is not deducted from an employee's gross earnings.

Accepted Answer

A) True 
 B)False

Question 2

Unearned revenue arises because the business receives goods or services before payment has been made.

Accepted Answer

A) True 
 B)False

Question 3

Estimated Warranty Payable is included in the liability section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 4

If the likelihood of a future event is probable and the amount of the expense can be estimated,how should the company report the contingency?

Accepted Answer

Record as expense an

Question 5

Jack,an employee of Desert Sky,Inc.,has gross salary for May of $9000.The entire amount is under the OASDI limit of $118,500 and thus subject to FICA.He is also subject to federal income tax at a rate of 21%.Which of the following is a part of the journal entry for accrual of the employer payroll taxes? (Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%.)Jack's income to date exceeds the FUTA and SUTA tax income limits.

Accepted Answer

A)  credit to Salaries Payable for $9000 
B)  debit to Cash for $6601.50 
C)  debit to Employee Income Taxes payable of $1890.00 
D)  credit to FICA-Medicare Taxes Payable of $130.50 
A)  credit to Salaries Payable for $9000 
B)  debit to Cash for $6601.50 
C)  debit to Employee Income Taxes payable of $1890.00 
D)  credit to FICA-Medicare Taxes Payable of $130.50

Question 6

Stone's gross pay for the week is $1600.Stone's year-to-date pay is under the limit for OASDI.Assume that the rate for state and federal unemployment compensation taxes is 6% and that Stone's year-to-date pay has not yet exceeded the $7000 cap.What is the amount of state and federal unemployment tax that his employer must record as payroll tax expense and pay to the federal and state governments?

Accepted Answer

A)  $225.84 
B)  $215.20 
C)  $119.20 
D)  $96.00 
A)  $225.84 
B)  $215.20 
C)  $119.20 
D)  $96.00

Question 7

Retirement compensation is a benefit because the employer sets aside money for the employee's future retirement.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following columns is typically included in a payroll register?

Accepted Answer

A)  Direct Labor Hours Worked 
B)  Warranties Payable 
C)  Current Period Earnings 
D)  Sales Tax 
A)  Direct Labor Hours Worked 
B)  Warranties Payable 
C)  Current Period Earnings 
D)  Sales Tax

Question 9

Which of the following is paid by the employer only?

Accepted Answer

A)  OASDI tax 
B)  Medicare tax 
C)  employee income tax 
D)  federal unemployment tax 
A)  OASDI tax 
B)  Medicare tax 
C)  employee income tax 
D)  federal unemployment tax

Question 10

Classic Sales Company offers warranties on all their electronic goods.Warranty expense is estimated at 3% of sales revenue.In 2018,the company had $602,000 of sales.In the same year,it paid out $12,000 of warranty payments.Which of the following is the entry needed to record the estimated warranty expense?

Accepted Answer

A)  $$\begin{array} { | c | r | r | } 
\hline \text { Estimated Warranty Payable } & 12,000 & \
\hline \text { Cash } & & 12,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | r | r | r | } 
\hline \text { Warranty Expense } & 12,000 & \
\hline \text { Estimated Warranty Payable } & & 12,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | r | r | r | } 
\hline \text { Warranty Expense } & 18,060 & \
\hline \text { Estimated Warranty Payable } & & 18,060 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | c | r | r | } 
\hline \text { Warranty Expense } & 18,060 & \
\hline \text { Sales Revenue } & & 18,060 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | c | r | r | } 
\hline \text { Estimated Warranty Payable } & 12,000 & \
\hline \text { Cash } & & 12,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | r | r | r | } 
\hline \text { Warranty Expense } & 12,000 & \
\hline \text { Estimated Warranty Payable } & & 12,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | r | r | r | } 
\hline \text { Warranty Expense } & 18,060 & \
\hline \text { Estimated Warranty Payable } & & 18,060 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | c | r | r | } 
\hline \text { Warranty Expense } & 18,060 & \
\hline \text { Sales Revenue } & & 18,060 \
\hline
\end{array}$$

Question 11

The expense for warranty costs is recorded in the period ________.

Accepted Answer

A)  when the product is sold 
B)  when the product is repaired or replaced 
C)  when cash is paid to repair or replace the product 
D)  when cash is collected from the sale of the product 
A)  when the product is sold 
B)  when the product is repaired or replaced 
C)  when cash is paid to repair or replace the product 
D)  when cash is collected from the sale of the product

Question 12

Income taxes are withheld from the employee's paycheck.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following accounts is debited when employees take their paid vacations?

Accepted Answer

A)  Vacation Benefits Expense 
B)  Vacation Benefits Payable 
C)  Salaries Expense 
D)  No entry is needed. 
A)  Vacation Benefits Expense 
B)  Vacation Benefits Payable 
C)  Salaries Expense 
D)  No entry is needed.

Question 14

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 15

Randall,an employee of Ramsay's,Inc.,has gross salary for March of $4,000.The entire amount is under the OASDI limit of $118,500 and thus subject to FICA.He is also subject to federal income tax at a rate of 18%.Randall has a deduction of $320 for health insurance and $80 for United Way.Which of the following is included in the entry to record the liabilities for payroll withholding deductions?

Accepted Answer

A)  debit to Salaries Payable 
B)  credit to United Way Payable 
C)  debit to FICA Taxes Payable 
D)  debit to Cash 
A)  debit to Salaries Payable 
B)  credit to United Way Payable 
C)  debit to FICA Taxes Payable 
D)  debit to Cash

Question 16

Dallas Company 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

Amy's gross pay for the week is $870.00.Her deduction for federal income tax is based on a rate of 25%.She has voluntary deductions of $245.00.Her year-to-date pay is under the limit for OASDI.What is her net pay? (Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%.(Round all calculations to the nearest cent.)

Accepted Answer

A)  $407.50 
B)  $652.50 
C)  $585.94 
D)  $340.94 
A)  $407.50 
B)  $652.50 
C)  $585.94 
D)  $340.94

Question 18

Warranties pose an accounting challenge because a company does not know which or how many products will have to be repaired.

Accepted Answer

A) True 
 B)False

Question 19

Short-term notes payable represent a written promise by the business to pay a debt,without the addition of interest,within one year or less.

Accepted Answer

A) True 
 B)False

Question 20

Sean's gross pay for this month is $8750.His gross year-to-date pay,prior to this month,totaled $112,000.Sean's rate for federal income tax is 25%.His voluntary deductions total $950.What is Sean's net pay? (Assume an OASDI rate of 6.2%,applicable on the first $118,500 earnings,and a Medicare rate of 1.45%,applicable on all earnings.Round any intermediate calculations to two decimal places,and your final answer to the nearest dollar.)

Accepted Answer

A)  $6032.62 
B)  $5612.50 
C)  $6562.50 
D)  $5082.62 
A)  $6032.62 
B)  $5612.50 
C)  $6562.50 
D)  $5082.62

State unemployment compensation tax (SUTA)is paid by the employer and is not deducted from an employee's gross earnings.

Unearned revenue arises because the business receives goods or services before payment has been made.

Estimated Warranty Payable is included in the liability section of the balance sheet.

If the likelihood of a future event is probable and the amount of the expense can be estimated,how should the company report the contingency?

Retirement compensation is a benefit because the employer sets aside money for the employee's future retirement.

Which of the following columns is typically included in a payroll register?

Which of the following is paid by the employer only?

The expense for warranty costs is recorded in the period ________.

Income taxes are withheld from the employee's paycheck.

Which of the following accounts is debited when employees take their paid vacations?

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

Dallas Company 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.

Warranties pose an accounting challenge because a company does not know which or how many products will have to be repaired.

Short-term notes payable represent a written promise by the business to pay a debt,without the addition of interest,within one year or less.

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

State unemployment compensation tax (SUTA)is paid by the employer and is not deducted from an employee's gross earnings.

Unearned revenue arises because the business receives goods or services before payment has been made.

Estimated Warranty Payable is included in the liability section of the balance sheet.

If the likelihood of a future event is probable and the amount of the expense can be estimated,how should the company report the contingency?

Retirement compensation is a benefit because the employer sets aside money for the employee's future retirement.

Which of the following columns is typically included in a payroll register?

Which of the following is paid by the employer only?

The expense for warranty costs is recorded in the period ________.

Income taxes are withheld from the employee's paycheck.

Which of the following accounts is debited when employees take their paid vacations?

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

Dallas Company 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.

Warranties pose an accounting challenge because a company does not know which or how many products will have to be repaired.

Short-term notes payable represent a written promise by the business to pay a debt,without the addition of interest,within one year or less.

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