Question 1

Promissory notes are nonnegotiable meaning that they cannot be transferred from party to party.

Accepted Answer

A) True 
 B)False

Question 2

All of the following statements regarding FICA taxes are True except:

Accepted Answer

A)  FICA taxes are deducted from the employee. 
B)  Employers must pay withheld FICA taxes to the IRS. 
C)  The amount of FICA deducted from the employee is credited to a liability account. 
D)  A self-employed person is exempt from FICA taxes. 
E)  An employer must pay FICA taxes equal to the amount withheld from the employee. 
A)  FICA taxes are deducted from the employee. 
B)  Employers must pay withheld FICA taxes to the IRS. 
C)  The amount of FICA deducted from the employee is credited to a liability account. 
D)  A self-employed person is exempt from FICA taxes. 
E)  An employer must pay FICA taxes equal to the amount withheld from the employee.

Question 3

A _____________________ shows the pay period dates, hours worked, gross pay, deductions, and net pay of each employee for every pay period.

Accepted Answer

The answer of A _____________________ shows the pay period dates,...

Question 4

Phil Phoenix is paid monthly. For the month of January of the current year, he earned a total of $8,288. The FICA tax rate for social security is 6.2% and the FICA tax rate for Medicare is 1.45%. The FUTA tax rate is 0.8%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The amount of Federal Income Tax withheld from his earnings was $1,375.17. What is the total amount of taxes withheld from the Phoenix's earnings?

Accepted Answer

A)  $3,097.17 
B)  $2,443.21 
C)  $2,009.21 
D)  $1,722.00 
E)  $1,495.36 
A)  $3,097.17 
B)  $2,443.21 
C)  $2,009.21 
D)  $1,722.00 
E)  $1,495.36

Question 5

The amount of federal income tax withheld depends on the employee's annual earnings rate and the number of withholding allowances claimed by the employee.

Accepted Answer

A) True 
 B)False

Question 6

A bank that is authorized to accept deposits of amounts payable to the federal government is a:

Accepted Answer

A)  Credit union. 
B)  FDIC insured bank. 
C)  Federal depository bank. 
D)  National bank. 
E)  Federal Reserve Bank. 
A)  Credit union. 
B)  FDIC insured bank. 
C)  Federal depository bank. 
D)  National bank. 
E)  Federal Reserve Bank.

Question 7

Federal depository banks are authorized to accept deposits of amounts payable to the federal government.

Accepted Answer

A) True 
 B)False

Question 8

Amounts received in advance from customers for future products or services:

Accepted Answer

A)  Are revenues. 
B)  Increase income. 
C)  Are liabilities. 
D)  Are not allowed under GAAP. 
E)  Require an outlay of cash in the future. 
A)  Are revenues. 
B)  Increase income. 
C)  Are liabilities. 
D)  Are not allowed under GAAP. 
E)  Require an outlay of cash in the future.

Question 9

Employers must keep certain payroll records, including individual earnings reports for each employee.

Accepted Answer

A) True 
 B)False

Question 10

A potential lawsuit claim is recorded when the claim can be reasonably estimated and it is reasonably possible.

Accepted Answer

A) True 
 B)False

Question 11

An estimated liability is a known obligation of an uncertain amount that can at least be reasonably estimated.

Accepted Answer

A) True 
 B)False

Question 12

An employer has an employee benefit package that includes employer-paid health insurance and an employer-paid retirement program. During January, the employer paid $7,500 for health insurance, and contributed to the employee retirement program 10% of the employees' $150,000 gross salaries. Prepare the journal entry to record these employee benefits.

Accepted Answer

The answer of An employer has an employee benefit package...

Question 13

A company's income before interest expense and income taxes is $302,400, and its interest expense is $72,000. Calculate the company's times interest earned ratio.

Accepted Answer

The answer of A company's income before interest expense and...

Question 14

ZMart had income before interest expense and income taxes of $12,581 million and interest expense of $1,063 million. XMart had income before interest expense and income taxes of $3,596 million and interest expense of $1,143 million. Calculate the times interest earned for each company and comment on the results.

Accepted Answer

The answer of ZMart had income before interest expense and...

Question 15

Gross pay is:

Accepted Answer

A)  Take-home pay. 
B)  Total compensation earned by an employee before any deductions. 
C)  Salaries after taxes are deducted. 
D)  Deductions withheld by an employer. 
E)  The amount of the paycheck. 
A)  Take-home pay. 
B)  Total compensation earned by an employee before any deductions. 
C)  Salaries after taxes are deducted. 
D)  Deductions withheld by an employer. 
E)  The amount of the paycheck.

Question 16

Advance ticket sales totaling $6,000,000 cash would be recognized as follows:

Accepted Answer

A)  Debit Sales, credit Unearned Revenue. 
B)  Debit Unearned Revenue, credit Sales. 
C)  Debit Cash, credit Unearned Revenue. 
D)  Debit Unearned Revenue, credit Cash. 
E)  Debit Cash, credit Revenue. 
A)  Debit Sales, credit Unearned Revenue. 
B)  Debit Unearned Revenue, credit Sales. 
C)  Debit Cash, credit Unearned Revenue. 
D)  Debit Unearned Revenue, credit Cash. 
E)  Debit Cash, credit Revenue.

Question 17

Known liabilities:

Accepted Answer

A)  Include accounts payable, notes payable, and payroll. 
B)  Are obligations set by agreements, contracts, or laws. 
C)  Are measurable. 
D)  Are definitely determinable. 
E)  All of these. 
A)  Include accounts payable, notes payable, and payroll. 
B)  Are obligations set by agreements, contracts, or laws. 
C)  Are measurable. 
D)  Are definitely determinable. 
E)  All of these.

Question 18

A high merit rating means that an employer has high employee turnover or seasonal hiring.

Accepted Answer

A) True 
 B)False

Question 19

______________________ is the total compensation an employee earns including wages, salaries, commissions, bonuses, and any compensation earned before deductions such as taxes.

Accepted Answer

The answer of ______________________ is the total compensation an employee...

Question 20

The wage bracket withholding table is used to:

Accepted Answer

A)  Compute social security withholding. 
B)  Compute Medicare withholding. 
C)  Compute federal income tax withholding. 
D)  Prepare the W-4. 
E)  All of these. 
A)  Compute social security withholding. 
B)  Compute Medicare withholding. 
C)  Compute federal income tax withholding. 
D)  Prepare the W-4. 
E)  All of these.

Exam 11: Current Liabilities and Payroll Accounting

Promissory notes are nonnegotiable meaning that they cannot be transferred from party to party.

All of the following statements regarding FICA taxes are True except:

A _____________________ shows the pay period dates, hours worked, gross pay, deductions, and net pay of each employee for every pay period.

The amount of federal income tax withheld depends on the employee's annual earnings rate and the number of withholding allowances claimed by the employee.

A bank that is authorized to accept deposits of amounts payable to the federal government is a:

Federal depository banks are authorized to accept deposits of amounts payable to the federal government.

Amounts received in advance from customers for future products or services:

Employers must keep certain payroll records, including individual earnings reports for each employee.

A potential lawsuit claim is recorded when the claim can be reasonably estimated and it is reasonably possible.

An estimated liability is a known obligation of an uncertain amount that can at least be reasonably estimated.

A company's income before interest expense and income taxes is $302,400, and its interest expense is $72,000. Calculate the company's times interest earned ratio.

Gross pay is:

Advance ticket sales totaling $6,000,000 cash would be recognized as follows:

Known liabilities:

A high merit rating means that an employer has high employee turnover or seasonal hiring.

______________________ is the total compensation an employee earns including wages, salaries, commissions, bonuses, and any compensation earned before deductions such as taxes.

The wage bracket withholding table is used to:

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resources, and Intangibles

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Cost Accounting

Process Cost Accounting

Cost Allocation and Performance Measurement

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Capital Budgeting and Managerial Decisions

Time Value of Money

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