Question 1

Identify and discuss the factors involved in computing federal income taxes for employees.

Accepted Answer

The amount of federal income tax withhel

Question 2

Companies with many employees often use a special ____________________ account to pay employees.

Accepted Answer

The answer of Companies with many employees often use a...

Question 3

A ________________________ is a potential obligation that depends on a future event arising from a past transaction or event.

Accepted Answer

Contingent

Question 4

An employee earned $62,500 during the year working for an employer. The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%. The current 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. What is the amount of total unemployment taxes the employee must pay?

Accepted Answer

A)  $101.50 
B)  $56.00 
C)  $378.00 
D)  $434.00 
E)  $0.00 
A)  $101.50 
B)  $56.00 
C)  $378.00 
D)  $434.00 
E)  $0.00

Question 5

An employee earns $5,500 per month working for an employer. The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%. The current FUTA tax rate is 0.8%, and the SUTA tax rate is 4.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The employee has $182 in federal income taxes withheld. The employee has voluntary deductions for health insurance of $150 and contributes $75 to a retirement plan each month. What is the amount of net pay for the employee for the month of January?

Accepted Answer

A)  $4,827.00 
B)  $4,672.25 
C)  $4,628.25 
D)  $4,386.25 
E)  $4,430.25 
A)  $4,827.00 
B)  $4,672.25 
C)  $4,628.25 
D)  $4,386.25 
E)  $4,430.25

Question 6

During August, Arena Company sells $356,000 in product that has a one year warranty. Experience shows that warranty expenses average about 5% of the selling price. The warranty liability account has a balance of $12,800 before adjustment. Customers returned product for warranty repairs during the month that used $9,400 in parts for repairs. The entry to record the customer warranty repairs is:

Accepted Answer

A)  Debit Warranty Expense $17,800; credit Estimated Warranty Liability $17,800. 
B)  Debit Warranty Expense $9,400; credit Estimated Warranty Liability $9,400. 
C)  Debit Warranty Expense $14,400; credit Estimated Warranty Liability $14,400. 
D)  Debit Estimated Warranty Liability $9,400; credit Parts Inventory $9,400. 
E)  Debit Estimated Warranty Liability $17,800; credit Parts Inventory $17,800. 
A)  Debit Warranty Expense $17,800; credit Estimated Warranty Liability $17,800. 
B)  Debit Warranty Expense $9,400; credit Estimated Warranty Liability $9,400. 
C)  Debit Warranty Expense $14,400; credit Estimated Warranty Liability $14,400. 
D)  Debit Estimated Warranty Liability $9,400; credit Parts Inventory $9,400. 
E)  Debit Estimated Warranty Liability $17,800; credit Parts Inventory $17,800.

Question 7

An employer's federal unemployment taxes (FUTA) are reported:

Accepted Answer

A)  Annually. 
B)  Semiannually. 
C)  Quarterly. 
D)  Monthly. 
E)  Weekly. 
A)  Annually. 
B)  Semiannually. 
C)  Quarterly. 
D)  Monthly. 
E)  Weekly.

Question 8

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 9

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 10

A company sells computers at a selling price of $1,800 each. Each computer has a 2 year warranty that covers replacement of defective parts. It is estimated that 2% of all computers sold will be returned under the warranty at an average cost of $150 each. During November, the company sold 30,000 computers, and 400 computers were serviced under the warranty at a total cost of $55,000. The balance in the Estimated Warranty Liability account at November 1 was $29,000. What is the company's warranty expense for the month of November?

Accepted Answer

A)  $26,000 
B)  $45,000 
C)  $55,000 
D)  $60,000 
E)  $90,000 
A)  $26,000 
B)  $45,000 
C)  $55,000 
D)  $60,000 
E)  $90,000

Question 11

Obligations not expected to be paid within the longer of one year or the company's operating cycle are reported as:

Accepted Answer

A)  Current assets. 
B)  Current liabilities. 
C)  Long-term liabilities. 
D)  Operating cycle liabilities. 
E)  Bills. 
A)  Current assets. 
B)  Current liabilities. 
C)  Long-term liabilities. 
D)  Operating cycle liabilities. 
E)  Bills.

Question 12

Times interest earned is calculated by:

Accepted Answer

A)  Multiplying interest expense times income. 
B)  Dividing interest expense by income before interest expense. 
C)  Dividing income before interest expense and income taxes by interest expense. 
D)  Multiplying interest expense by income before interest expense. 
E)  Dividing income before interest expense by interest expense and income taxes. 
A)  Multiplying interest expense times income. 
B)  Dividing interest expense by income before interest expense. 
C)  Dividing income before interest expense and income taxes by interest expense. 
D)  Multiplying interest expense by income before interest expense. 
E)  Dividing income before interest expense by interest expense and income taxes.

Question 13

An employee earns $5,500 per month working for an employer. The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%. The current FUTA tax rate is 0.8%, and the SUTA tax rate is 4.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The employee has $182 in federal income taxes withheld. The employee has voluntary deductions for health insurance of $150 and contributes $75 to a retirement plan each month. What is the amount the employer should record as payroll taxes expense for the employee for the month of January?

Accepted Answer

A)  $420.75 
B)  $464.75 
C)  $662.75 
D)  $888.75 
E)  $706.75 
A)  $420.75 
B)  $464.75 
C)  $662.75 
D)  $888.75 
E)  $706.75

Question 14

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 15

On June 1, Martin Company signed a $25,000, 120-day, 6% note payable to cover a past due account payable.
a. What is the total amount of interest to be paid on this note?
b. Prepare Martin Company's general journal entry to record the issuance of the note payable.
c. Prepare Martin Company's general journal entry to record the payment of the note on September 29.

Accepted Answer

The answer of On June 1, Martin Company signed a...

Question 16

Metro Express has 5 sales employees, each of whom earns $4,000 per month and is paid on the last working day of the month. Each employee's wages are subject to FICA social security taxes of 6.2% and Medicare taxes of 1.45% on all wages. Withholding for each employee also includes federal income tax of 16% and monthly medical insurance premiums of $110 for each employee.
a. Prepare the general journal entry to accrue the monthly sales salaries expense at January 31.
b. The employer payroll taxes for Metro Express include FICA taxes, federal unemployment taxes of 0.8% of the first $7,000 paid each employee, and state unemployment taxes of 4.0% of the first $7,000 paid to each employee. Prepare the journal entry to record the employer's payroll taxes at January 31 for Metro Express. (Assume that none of the employees has reached the unemployment limit of $7,000.)

Accepted Answer

The answer of Metro Express has 5 sales employees, each...

Question 17

Vacation benefits are a type of _______________ liability.

Accepted Answer

The answer of Vacation benefits are a type of _______________...

Question 18

Uncertainties such as natural disasters:

Accepted Answer

A)  Are not contingent liabilities because they are future events not arising from past transactions or events. 
B)  Are contingent liabilities because they are future events arising from past transactions or events. 
C)  Should be disclosed because of their usefulness to financial statements. 
D)  Are estimated liabilities because the amounts are uncertain. 
E)  Arise out of transactions such as debt guarantees. 
A)  Are not contingent liabilities because they are future events not arising from past transactions or events. 
B)  Are contingent liabilities because they are future events arising from past transactions or events. 
C)  Should be disclosed because of their usefulness to financial statements. 
D)  Are estimated liabilities because the amounts are uncertain. 
E)  Arise out of transactions such as debt guarantees.

Question 19

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 20

The tax rate for FICA-social security is 6.2% and the tax rate for FICA-Medicare is 1.45%. Calculate the total amount of FICA withholding for an employee whose pay is $2,400 and is entirely subject to these FICA taxes.

Accepted Answer

The answer of The tax rate for FICA-social security is...

Identify and discuss the factors involved in computing federal income taxes for employees.

Companies with many employees often use a special ____________________ account to pay employees.

A ________________________ is a potential obligation that depends on a future event arising from a past transaction or event.

An employer's federal unemployment taxes (FUTA) are reported:

Gross pay is:

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

Obligations not expected to be paid within the longer of one year or the company's operating cycle are reported as:

Times interest earned is calculated by:

Vacation benefits are a type of _______________ liability.

Uncertainties such as natural disasters:

Known liabilities:

The tax rate for FICA-social security is 6.2% and the tax rate for FICA-Medicare is 1.45%. Calculate the total amount of FICA withholding for an employee whose pay is $2,400 and is entirely subject to these FICA taxes.

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

Long-Term Assets

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

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

Filters

Exam 11: Current Liabilities and Payroll Accounting

Identify and discuss the factors involved in computing federal income taxes for employees.

Companies with many employees often use a special ____________________ account to pay employees.

A ________________________ is a potential obligation that depends on a future event arising from a past transaction or event.

An employer's federal unemployment taxes (FUTA) are reported:

Gross pay is:

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

Obligations not expected to be paid within the longer of one year or the company's operating cycle are reported as:

Times interest earned is calculated by:

Vacation benefits are a type of _______________ liability.

Uncertainties such as natural disasters:

Known liabilities:

The tax rate for FICA-social security is 6.2% and the tax rate for FICA-Medicare is 1.45%. Calculate the total amount of FICA withholding for an employee whose pay is $2,400 and is entirely subject to these FICA taxes.

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

Long-Term Assets

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

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

Filters