Question 1

Which of the following will have no effect on an employee's take-home pay?

Accepted Answer

A)  Social security tax 
B)  Unemployment tax 
C)  Marital status 
D)  Number of exemptions claimed 
A)  Social security tax 
B)  Unemployment tax 
C)  Marital status 
D)  Number of exemptions claimed

Question 2

The following totals for the month of February were taken from the payroll register of Arcon Company:
   How much is the total payroll expense for Arcon Company for this payroll?
Assume that the monthly salaries expense remains the same for the entire year and no employees are hired or fired during that time. Based on what you learned in Chapter 11 about payroll taxes, do you expect the total payroll expense to stay the same every month? Explain.

Accepted Answer

Total payroll expense: $13,000 salaries

Question 3

The Core Company had the following assets and liabilities as of December 31, 2012:
   Calculate: Current Ratio, Working Capital and Quick Ratio

Accepted Answer

Current Ratio: ($58,000 + $25,

Question 4

Chang Co. issued a $50,000, 120-day, discounted note to Guarantee Bank. The discount rate is 6%. Assuming a 360-day year, the cash proceeds to Chang Co. are

Accepted Answer

A)  $49,750 
B)  $47,000 
C)  $49,000 
D)  $51,000 
A)  $49,750 
B)  $47,000 
C)  $49,000 
D)  $51,000

Question 5

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 6

The cost of a product warranty should be included as an expense in the

Accepted Answer

A)  period the cash is collected for a product sold on account 
B)  future period when the cost of repairing the product is paid 
C)  period of the sale of the product 
D)  future period when the product is repaired or replaced 
A)  period the cash is collected for a product sold on account 
B)  future period when the cost of repairing the product is paid 
C)  period of the sale of the product 
D)  future period when the product is repaired or replaced

Question 7

An employee receives an hourly rate of $15, 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, 46; federal income tax withheld, $110; cumulative earnings for the year prior to this week, $24,500; Social security tax rate, 6% 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. What is the net amount to be paid to the employee?

Accepted Answer

A)  $569.87 
B)  $539.00 
C)  $625.00 
D)  $544.88 
A)  $569.87 
B)  $539.00 
C)  $625.00 
D)  $544.88

Question 8

Estimating and recording product warranty expense in the period of the sale best follows which of the following accounting concepts?

Accepted Answer

A)  cost concept 
B)  business entity concept 
C)  matching concept 
D)  materiality concept 
A)  cost concept 
B)  business entity concept 
C)  matching concept 
D)  materiality concept

Question 9

The following totals for the month of June were taken from the payroll register of Young Company:   The entry to record the accrual of employer's payroll taxes would include a

Accepted Answer

A)  debit to Payroll Taxes Expense for $2,498 
B)  debit to Social Security and Medicare Tax Payable for $2,250 
C)  debit to Payroll Taxes Expense for $1,373 
D)  Debit to Payroll Tax Expense for $1,125 
A)  debit to Payroll Taxes Expense for $2,498 
B)  debit to Social Security and Medicare Tax Payable for $2,250 
C)  debit to Payroll Taxes Expense for $1,373 
D)  Debit to Payroll Tax Expense for $1,125

Question 10

An aid in internal control over payrolls that indicates employee attendance is

Accepted Answer

A)  time card 
B)  voucher system 
C)  payroll register 
D)  employee's earnings record 
A)  time card 
B)  voucher system 
C)  payroll register 
D)  employee's earnings record

Question 11

According to a summary of the payroll of Scotland Company, $450,000 was subject to the 7.0% social security tax and $500,000 was subject to the 1.5% Medicare tax. Federal income tax withheld was $98,000. Also, $15,000 was subject to state (4.2%) and federal (0.8%) unemployment taxes. The journal entry to record accrued payroll taxes would include:

Accepted Answer

A)  a debit to SUTA Payable of $630 
B)  a debit to SUTA Payable of $18,900 
C)  a credit to SUTA Payable of $630 
D)  a credit to SUTA Payable of $18,900 
A)  a debit to SUTA Payable of $630 
B)  a debit to SUTA Payable of $18,900 
C)  a credit to SUTA Payable of $630 
D)  a credit to SUTA Payable of $18,900

Question 12

Payroll taxes only include social security taxes and federal unemployment and state unemployment taxes.

Accepted Answer

A) True 
 B)False

Question 13

Garrett Company sells merchandise with a one year warranty. In 2012, sales consisted of 3,500 units. It is estimated that warranty repairs will average $15 per unit sold, and 30% of the repairs will be made in 2012 and 70% in 2013. In the 2012 income statement, Garrett should show warranty expense of

Accepted Answer

A)  $36,750 
B)  $15,750 
C)  $52,500 
D)  $0 
A)  $36,750 
B)  $15,750 
C)  $52,500 
D)  $0

Question 14

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 15

The Crafter Company had the following assets and liabilities as of December 31, 2012:   Determine the quick ratio for the end of the year (rounded to one decimal point).

Accepted Answer

A)  5.3 
B)  3.6 
C)  3.3 
D)  2.3 
A)  5.3 
B)  3.6 
C)  3.3 
D)  2.3

Question 16

Amounts withheld from each employee for Social Security and Medicare varies by state.

Accepted Answer

A) True 
 B)False

Question 17

While separation of duties may play a strong role in the internal control of inventory, it is significant in controlling payroll.

Accepted Answer

A) True 
 B)False

Question 18

The journal entry a company uses to record the issuance of an interest-bearing note for the purpose of borrowing funds for the business is

Accepted Answer

A)  debit Accounts Payable; credit Notes Payable 
B)  debit Cash; credit Notes Payable 
C)  debit Notes Payable; credit Cash 
D)  debit Cash and Interest Expense; credit Notes Payable 
A)  debit Accounts Payable; credit Notes Payable 
B)  debit Cash; credit Notes Payable 
C)  debit Notes Payable; credit Cash 
D)  debit Cash and Interest Expense; credit Notes Payable

Question 19

Carmen Flores' weekly gross earnings for the week ending Dec. 7th were $2,500, and her federal income tax withholding was $525. Prior to this week Flores had earned $98,000 for the year. Assuming the social security rate is 6% on the first $100,000 of annual earnings and Medicare is 1.5% of all earnings, what is Flores' net pay?

Accepted Answer

The answer of Carmen Flores' weekly gross earnings for the...

Question 20

The journal entry a company uses to record the issuance of a note for the purpose of converting an existing account payable would be

Accepted Answer

A)  debit Cash; credit Accounts Payable 
B)  debit Accounts, Payable; credit Cash 
C)  debit Cash; credit Notes Payable 
D)  debit Accounts Payable; credit Notes Payable 
A)  debit Cash; credit Accounts Payable 
B)  debit Accounts, Payable; credit Cash 
C)  debit Cash; credit Notes Payable 
D)  debit Accounts Payable; credit Notes Payable

Exam 11: Current Liabilities and Payroll

Which of the following will have no effect on an employee's take-home pay?

The Core Company had the following assets and liabilities as of December 31, 2012: Calculate: Current Ratio, Working Capital and Quick Ratio

Chang Co. issued a $50,000, 120-day, discounted note to Guarantee Bank. The discount rate is 6%. Assuming a 360-day year, the cash proceeds to Chang Co. are

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

The cost of a product warranty should be included as an expense in the

Estimating and recording product warranty expense in the period of the sale best follows which of the following accounting concepts?

The following totals for the month of June were taken from the payroll register of Young Company: The entry to record the accrual of employer's payroll taxes would include a

An aid in internal control over payrolls that indicates employee attendance is

Payroll taxes only include social security taxes and federal unemployment and state unemployment taxes.

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

The Crafter Company had the following assets and liabilities as of December 31, 2012: Determine the quick ratio for the end of the year (rounded to one decimal point).

Amounts withheld from each employee for Social Security and Medicare varies by state.

While separation of duties may play a strong role in the internal control of inventory, it is significant in controlling payroll.

The journal entry a company uses to record the issuance of an interest-bearing note for the purpose of borrowing funds for the business is

The journal entry a company uses to record the issuance of a note for the purpose of converting an existing account payable would be

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Accounting for Partnerships and Limited Liability Companies

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

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Filters