Question 1

Which of these accounts is increased by a credit? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)

Accepted Answer

A) Owners' capital 
B) Revenue 
C) Assets 
D) Expenses

Question 2

On December 1, 20XX, Riley Sanders invested $250,000 to open Sanders Enterprises. What is the General Journal entry to record this transaction?

Accepted Answer

A) Debit R. Sanders Capital, $250,000; Credit Cash, $250,000 
B) Debit Cash, $250,000; Credit Revenue, $250,000 
C) Debit Revenue, $250,000; Credit Cash, $250,000 
D) Debit Cash, $250,000; Credit R. Sanders Capital, $250,000

Question 3

In general, how are the expenses associated with the payroll accountant's labor allocated in a ﬁrm?

Accepted Answer

A) They are allocated to one department. 
B) They are billed directly to a customer. 
C) They are reported as part of the ﬁrm's overhead. 
D) They are billed directly to each department manager.

Question 4

Besides payroll information, the payroll register contains _____.

Accepted Answer

A) the ﬁrm's payroll checking account information 
B) tax remittance information 
C) proof of payroll deposits 
D) information about the ﬁrm's liabilities

Question 5

Why does company proﬁtability decrease in direct proportion to the payroll expenses?

Accepted Answer

A) Because payroll represents an asset and an income of the business. The higher payroll incomes are, the higher the proﬁtability will be. 
B) Because payroll represents an asset and an income of the business. The lower the payroll expenses are, the higher the proﬁtability will be. 
C) Because payroll represents a liability and an expense of the business. The higher payroll expenses are, the lower the proﬁtability will be. 
D) Because payroll represents a liability and an expense of the business. The lower payroll expenses are, the lower the proﬁtability will be.

Question 6

What is the primary purpose of a labor report?

Accepted Answer

A) It communicates departmental proﬁtability. 
B) It depicts the ideal distribution of labor in a ﬁrm. 
C) It designates where labor is used in a ﬁrm. 
D) It is a report designed to be read by parties external to the ﬁrm.

Question 7

Which of the following is an example of a liability account?

Accepted Answer

A) Cash 
B) Owners' Capital 
C) Salaries Payable 
D) Wages Expense

Question 8

Besides containing the supporting data for periodic tax reports, the employee earnings record serves as a backup in the event of computer failure.

Accepted Answer

A) True 
 B)False

Question 9

Two complete payroll-related General Journal entries are recorded each pay period: one for the employees' payroll, one for the employer's share of the taxes.

Accepted Answer

A) True 
 B)False

Question 10

How does a payroll accountant keep track of employee's year-to-date earnings for wage bases on taxes like
FICA, FUTA, and SUTA?

Accepted Answer

A) Form W-2 
B) Employee earnings record 
C) Form W-4 
D) Payroll register

Question 11

The following data is for the January 19 pay date for Waryzbok Inc.:

Which of the following represents the missing Social Security and Medicare taxes, assuming that the health insurance is qualiﬁed under Section 125?

Accepted Answer

A) Social Security tax, $204.15; Medicare tax, $792.35 
B) Social Security tax, $792.35; Medicare tax, $204.15 
C) Social Security tax, $746.66; Medicare tax, $174.62 
D) Social Security tax, $188.31; Medicare tax, $805.19

Question 12

Which of the following is an example of a liability account?

Accepted Answer

A) Payroll Taxes Expense 
B) FUTA Payable 
C) Salaries and Wages Expense 
D) Cash

Question 13

How does the payroll register connect with the employees' earnings records?

Accepted Answer

A) Both documents contain year-to-date totals of taxes. 
B) Both documents contain information about the employee's address and job title. 
C) Both documents contain information from multiple pay periods. 
D) Both documents contain details of employee earnings, deductions, and disbursement for a pay period.

Question 14

Mandatory employer-paid payroll taxes are known as statutory deductions.

Accepted Answer

A) True 
 B)False

Question 15

What is true about the trial balance?

Accepted Answer

A) The total of the debits must equal the total of the credits. 
B) It contains a detailed listing of every transaction during a period. 
C) Payroll accounts do not appear on the trial balance because of their changeable nature. 
D) It may contain whatever accounts the accountant wishes to include.

Question 16

In what order are accounts presented on the trial balance?

Accepted Answer

A) By order of importance 
B) By dollar amount 
C) Alphabetically 
D) The same as the chart of accounts

Question 17

As of the June 11 pay date, the General Ledger account for Burling Mills has a balance of $14,289 in its Federal withholding tax payable account. A credit of $16,250 is recorded on the June 25 pay date. What is the balance in the account?

Accepted Answer

A) Debit $1,961 
B) Debit $30,539 
C) Credit $1,961 
D) Credit $30,539

Question 18

To which items is information from the payroll register transferred? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)

Accepted Answer

A) Employee earnings record 
B) General Journal 
C) Labor reports 
D) Company website

Question 19

The information in the payroll register forms the basis for entries in the Employee Earnings Records and the
General Journal.

Accepted Answer

A) True 
 B)False

Question 20

If a ﬁrm accrues the payroll due but not paid at the end of a ﬁnancial period, what should it do on the ﬁrst day of the next ﬁnancial period?

Accepted Answer

A) It should create a reminder about the accrual to ensure accuracy of computations on the next pay date. 
B) It should make a note to create the reversing entry at the end of the next ﬁnancial period. 
C) It should disburse the accrued pay to the employees. 
D) It should create a reversing entry in the General Journal.

Exam 7: Payroll Project

On December 1, 20XX, Riley Sanders invested $250,000 to open Sanders Enterprises. What is the General Journal entry to record this transaction?

In general, how are the expenses associated with the payroll accountant's labor allocated in a ﬁrm?

Besides payroll information, the payroll register contains _____.

Why does company proﬁtability decrease in direct proportion to the payroll expenses?

What is the primary purpose of a labor report?

Which of the following is an example of a liability account?

Besides containing the supporting data for periodic tax reports, the employee earnings record serves as a backup in the event of computer failure.

Two complete payroll-related General Journal entries are recorded each pay period: one for the employees' payroll, one for the employer's share of the taxes.

How does a payroll accountant keep track of employee's year-to-date earnings for wage bases on taxes like FICA, FUTA, and SUTA?

The following data is for the January 19 pay date for Waryzbok Inc.: Which of the following represents the missing Social Security and Medicare taxes, assuming that the health insurance is qualiﬁed under Section 125?

Which of the following is an example of a liability account?

How does the payroll register connect with the employees' earnings records?

Mandatory employer-paid payroll taxes are known as statutory deductions.

What is true about the trial balance?

In what order are accounts presented on the trial balance?

As of the June 11 pay date, the General Ledger account for Burling Mills has a balance of $14,289 in its Federal withholding tax payable account. A credit of $16,250 is recorded on the June 25 pay date. What is the balance in the account?

The information in the payroll register forms the basis for entries in the Employee Earnings Records and the General Journal.

If a ﬁrm accrues the payroll due but not paid at the end of a ﬁnancial period, what should it do on the ﬁrst day of the next ﬁnancial period?