Question 1

Proper payroll accounting methods are important for a business for all the reasons below except

Accepted Answer

A)  good employee morale requires timely and accurate payroll payments. 
B)  payroll is subject to various federal and state regulations. 
C)  to help a business with cash flow problems by delayed payments of payroll taxes to federal and state agencies. 
D)  payroll and related payroll taxes have a significant effect on the net income of most businesses. 
A)  good employee morale requires timely and accurate payroll payments. 
B)  payroll is subject to various federal and state regulations. 
C)  to help a business with cash flow problems by delayed payments of payroll taxes to federal and state agencies. 
D)  payroll and related payroll taxes have a significant effect on the net income of most businesses.

Question 2

Payroll entries are made with data from the

Accepted Answer

A)  wage and tax statement 
B)  employee's earning record 
C)  employer's quarterly federal tax return 
D)  payroll register 
A)  wage and tax statement 
B)  employee's earning record 
C)  employer's quarterly federal tax return 
D)  payroll register

Question 3

Which statement below is not a determinate in calculating the amount of federal income taxes withheld from an individuals pay?

Accepted Answer

A)  filing status 
B)  types of earnings 
C)  gross pay 
D)  number of exemptions 
A)  filing status 
B)  types of earnings 
C)  gross pay 
D)  number of exemptions

Question 4

An employee receives an hourly rate of $45, with time and a half for all hours worked in excess of 40 during the week. Payroll data for the current week are as follows: hours worked, 48; federal income tax withheld, $950; Social security tax rate, 6.5% on maximum of $100,000; and Medicare tax rate, 1.5% on all earnings; state unemployment compensation tax, 3.4% on the first $7,000; federal unemployment compensation tax, .8% on the first $7,000.
Calculate the employer's payroll tax expense if:
a. this is the first payroll of the year and the employee has no cumulative earnings for the year to date.
b. the employee's cumulative earnings for the year prior to this week equal $6,200.
c. the employee's cumulative earnings for the year prior to this week equal $98,700.
Employee wages = (40 x $45 + 8 x $67.50) $2,340

Accepted Answer

The answer of An employee receives an hourly rate of...

Question 5

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

Question 6

The journal entry a company uses to record accrued vacation privileges for its employees at the end of the year is

Accepted Answer

A)  debit Vacation Pay Expense; credit Vacation Pay Payable 
B)  debit Vacation Pay Payable; credit Vacation Pay Expense 
C)  debit Salary Expense; credit Cash 
D)  debit Salary Expense; credit Salaries Payable 
A)  debit Vacation Pay Expense; credit Vacation Pay Payable 
B)  debit Vacation Pay Payable; credit Vacation Pay Expense 
C)  debit Salary Expense; credit Cash 
D)  debit Salary Expense; credit Salaries Payable

Question 7

The payroll summary for December 31 for Waters Co. revealed total earnings of $80,000. Earnings subject to 6% social security tax were $60,000; earnings subject to 1.5% Medicare tax were $80,000; and earnings of $3,000 were subject to 4.3% state and 0.8% federal unemployment compensation tax. Journalize the entry to record the accrual of payroll taxes.

Accepted Answer

The answer of The payroll summary for December 31 for...

Question 8

Depending upon when an unfunded pension liability is to be paid, it will be classified on the balance sheet as either a long-term or a current liability.

Accepted Answer

A) True 
 B)False

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

The following information is for employee Ella Dodd for the week ended March 15.
Total hours worked: 48
Rate: $15 per hour, with double time for all hours in excess of 40
Federal income tax withheld: $200
United Fund deduction: $50
Cumulative earnings prior to current week: $6,400
Tax rates:
Social security: 6% on maximum earnings of $100,000. Medicare tax:
1.5% on all earnings.
State unemployment: 3.4% on maximum earnings of $7,000; on employer
Federal unemployment: 0.8% on maximum earnings of $7,000; on employer

Accepted Answer

The answer of The following information is for employee Ella...

Question 11

Interest expense is reported in the operating expense section of the income statement.

Accepted Answer

A) True 
 B)False

Question 12

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 13

Journalize the following transactions for Riley Corporation:

Accepted Answer

The answer of Journalize the following transactions for Riley Corporation:
...

Question 14

On June 8, Alton Co. issued an $95,000, 6%, 120-day note payable to Seller Co. What is the due date of the note?

Accepted Answer

A)  October 8 
B)  October 7 
C)  October 6 
D)  October 5 
A)  October 8 
B)  October 7 
C)  October 6 
D)  October 5

Question 15

Medicare taxes are withheld from an employee's pay only until the employee has earned a specific amount each year.

Accepted Answer

A) True 
 B)False

Question 16

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 17

The amount of money a borrower receives from the lender is called discount rate.

Accepted Answer

A) True 
 B)False

Question 18

Elgin Company sells merchandise with a one year warranty. Sales consisted of 2,500 units in 2012 and 2,000 units in 2013. It is estimated that warranty repairs will average $10 per unit sold, and 30% of the repairs will be made in 2012 and 70% in 2013 for the 2012 sales. Similarly, 30% of repairs will be made in 2013 and 70% in 2014 for the 2013 sales. In the 2013 income statement, how much of the warranty expense shown will be due to 2012 sales?

Accepted Answer

A)  $7,500 
B)  $17,500 
C)  $25,000 
D)  $0 
A)  $7,500 
B)  $17,500 
C)  $25,000 
D)  $0

Question 19

The payroll register is a multicolumn form used to assemble the data related for all employees.

Accepted Answer

A) True 
 B)False

Question 20

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)  
  
B)  
  
C) 
  
D)  
  
A)  
  
B)  
  
C) 
  
D)

Exam 10: Current Liabilities and Payroll

Proper payroll accounting methods are important for a business for all the reasons below except

Payroll entries are made with data from the

Which statement below is not a determinate in calculating the amount of federal income taxes withheld from an individuals pay?

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

The journal entry a company uses to record accrued vacation privileges for its employees at the end of the year is

Depending upon when an unfunded pension liability is to be paid, it will be classified on the balance sheet as either a long-term or a current liability.

Interest expense is reported in the operating expense section of the income statement.

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

Journalize the following transactions for Riley Corporation:

On June 8, Alton Co. issued an $95,000, 6%, 120-day note payable to Seller Co. What is the due date of the note?

Medicare taxes are withheld from an employee's pay only until the employee has earned a specific amount each year.

Which of the following is the most desirable quick ratio?

The amount of money a borrower receives from the lender is called discount rate.

The payroll register is a multicolumn form used to assemble the data related for all employees.

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:

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

Managerial Accounting Concepts and Principles

Job Order Costing

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Cost Management for Just-In-Time Environments

Filters