Question 1

Which of the following deductions must be matched by the employer,resulting in both a deduction from gross pay and an expense to the employer?

Accepted Answer

A)  Federal income taxes 
B)  Federal unemployment taxes 
C)  FICA taxes 
D)  Charitable deductions

Question 2

FICA tax is a tax which is paid by the employee only.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is a control procedure to prevent fictitious persons cashing paychecks?

Accepted Answer

A)  Having employees clock in and out of work 
B)  Keeping computerized records of payroll data 
C)  Serial numbering of paychecks 
D)  Requiring photo IDs for employees picking up their paychecks

Question 4

Southwest Company's records indicate that February sales on account were $111,000.The company's management estimates the liability for warranties to be 4.0% of sales.Please provide the journal entry to record warranty expense.
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Accepted Answer

The answer of Southwest Company's records indicate that February sales...

Question 5

On October 1,2012,Archer Sales borrows $100,000 by signing a note payable.The note is for 6 months and bears interest at a rate of 9%.Archer properly accrued interest at the end of 2012.Please provide the journal entry made at the end of March,2013 when Archer settles the note.
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Accepted Answer

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Question 6

Which of the following is included in the entry to record the employer's payroll taxes?

Accepted Answer

A)  A debit to State unemployment tax payable 
B)  A credit to Payroll tax expense 
C)  A credit to FICA tax payable 
D)  A credit to Salary payable to employees

Question 7

Warranty expense would be included in the liability section of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 8

FICA tax is paid by the employer only and is not deducted from gross pay.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is paid by the employee only?

Accepted Answer

A)  FICA 
B)  FUTA 
C)  Employee income tax 
D)  State unemployment tax

Question 10

Art Parrish,the sole employee of Parrish Sales,has gross salary for March of $4,000.The entire amount is under the OASDI limit of $106,800,and thus subject to FICA.He is also subject to federal income tax at a rate of 18%.His year-to-date pay has already exceeded the $7,000 cap for FUTA and SUTA.The fifth journal entry in the payroll cycle to record the payment by the company of payroll taxes to the government includes which of the following?

Accepted Answer

A)  Credit to Cash 
B)  Credit to Employee income tax payable 
C)  Credit to FICA tax payable 
D)  Debit to Salary payable

Question 11

Joe signs a $5,000,8%,6-month note dated September 1,2012.What is Joe's 2013 interest expense for this note?

Accepted Answer

A)  $133 
B)  $200 
C)  $400 
D)  $67

Question 12

Which of the following is included in the entry to record warranty expense?

Accepted Answer

A)  A debit to Warranty expense 
B)  A credit to Inventory 
C)  A credit to Warranty expense 
D)  A debit to Estimated warranty payable

Question 13

Mary's gross pay for the week is $1,000.Mary's deduction for federal income tax is based on a rate of 20%.Mary has voluntary deductions of $150.Her yearly pay is under the limit for OASDI.What is the amount of her net pay?

Accepted Answer

A)  $594.80 
B)  $773.50 
C)  $650.00 
D)  $573.50

Question 14

Amounts owed for products or services purchased on account are contingent liabilities.

Accepted Answer

A) True 
 B)False

Question 15

A certain contingent liability was evaluated at year-end,and considered to have a remote possibility of becoming an actual liability.If the accountant decided NOT to report it on the balance sheet or in the notes to the financial statement,this could be considered unethical behavior.

Accepted Answer

A) True 
 B)False

Question 16

RGF Manufacturing recently signed a $200,000,4-month note on June 22.The interest rate is 5%.How much total interest will be due on the note?

Accepted Answer

A)  $10,000 
B)  $3,833 
C)  $3,333 
D)  $203,780

Question 17

Gross pay is the total amount of salary,wages,commissions,and bonuses earned by an employee during a pay period.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is included in the entry to record estimated warranty payable?

Accepted Answer

A)  A credit to Estimated warranty payable 
B)  A credit to Inventory 
C)  A credit to Warranty expense 
D)  A debit to Estimated warranty payable

Question 19

Art Parrish,the sole employee of Parrish Sales,has gross salary for March of $4,000.The entire amount is under the OASDI limit of $106,800,and thus subject to FICA.He is also subject to federal income tax at a rate of 18%.Art has a deduction of $320 for health insurance and $80 for United Way.The second entry in the payroll cycle to record the disbursement of his net pay should include which of the following?

Accepted Answer

A)  Credit to Salary payable 
B)  Debit to Payable to the United Way 
C)  Debit FICA tax payable 
D)  Credit Cash

Question 20

Franconia Sales offers warranties on all their electronic goods.Warranty expense is estimated at 2% of sales revenue.In 2014,Franconia had $500,000 of sales.In the same year,Franconia paid out $7,500 of warranty payments.Please provide the journal entry to record the disbursement of warranty payments.
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Accepted Answer

The answer of Franconia Sales offers warranties on all their...

Exam 10: Current Liabilities and Payroll

Which of the following deductions must be matched by the employer,resulting in both a deduction from gross pay and an expense to the employer?

FICA tax is a tax which is paid by the employee only.

Which of the following is a control procedure to prevent fictitious persons cashing paychecks?

Which of the following is included in the entry to record the employer's payroll taxes?

Warranty expense would be included in the liability section of the balance sheet.

FICA tax is paid by the employer only and is not deducted from gross pay.

Which of the following is paid by the employee only?

Joe signs a $5,000,8%,6-month note dated September 1,2012.What is Joe's 2013 interest expense for this note?

Which of the following is included in the entry to record warranty expense?

Mary's gross pay for the week is $1,000.Mary's deduction for federal income tax is based on a rate of 20%.Mary has voluntary deductions of $150.Her yearly pay is under the limit for OASDI.What is the amount of her net pay?

Amounts owed for products or services purchased on account are contingent liabilities.

A certain contingent liability was evaluated at year-end,and considered to have a remote possibility of becoming an actual liability.If the accountant decided NOT to report it on the balance sheet or in the notes to the financial statement,this could be considered unethical behavior.

RGF Manufacturing recently signed a $200,000,4-month note on June 22.The interest rate is 5%.How much total interest will be due on the note?

Gross pay is the total amount of salary,wages,commissions,and bonuses earned by an employee during a pay period.

Which of the following is included in the entry to record estimated warranty payable?