Question 1

A company's payroll for the week ended May 15 included earned salaries of $20,000. All of that week's pay is subject to FICA social security taxes of 6.2% and Medicare taxes of 1.45%. In addition, the company withholds the following amounts for this weekly pay period: $900 for medical insurance, $3,400 for federal income taxes, and $180 for union dues.
a. Prepare the general journal entry to accrue the payroll.
b. The company is subject to state unemployment taxes at the rate of 2% and federal unemployment taxes at the rate of 0.6%.
By May 15, some employees had earned over $7,000, so only $11,000 of the $20,000 weekly gross pay was subject to unemployment tax. Prepare the general journal entry to accrue the employer's payroll tax expense.

Accepted Answer

The answer of A company's payroll for the week ended...

Question 2

Each employee records the number of withholding allowances claimed on the withholding allowance certificate that is filed with the employer, which is the form W-4.

Accepted Answer

A) True 
 B)False

Question 3

Companies may use a special bank account solely for the purpose of paying employees, by depositing an amount equal to the total employees' net pay into the account each pay period and drawing the employees' payroll checks on the account. This account is a(n) :

Accepted Answer

A)  Federal depository bank account.
B)  Employee's Individual Earnings account.
C)  Employees' bank account.
D)  Payroll register account.
E)  Payroll bank account.F) B) and E)
G) B) and D)

Question 4

On December 1, Watson Enterprises signed a $24,000, 60-day, 4% note payable as replacement of an account payable with Erikson Company. What amount of interest expense is accrued at December 31 on the note?

Accepted Answer

A)  $0
B)  $80
C)  $320
D)  $960
E)  $160F) A) and B)
G) None of the above

Question 5

A company sold $12,000 worth of bicycles with an extended warranty. It estimates that 2% of these sales will result in warranty work. The company should:

Accepted Answer

A)  Consider the warranty expense a remote liability since the rate is only 2%.
B)  Recognize warranty expense at the time the warranty work is performed.
C)  Recognize warranty expense and liability in the year of the sale.
D)  Consider the warranty expense a contingent liability.
E)  Recognize warranty liability when the company purchases the bicycles.F) A) and D)
G) C) and E)

Question 6

A table that shows the amount of federal income tax to be withheld from an employee's pay is the:

Accepted Answer

A)  Form 941.
B)  Tax table.
C)  Wage bracket withholding table.
D)  W-2.
E)  W-4.F) A) and B)
G) A) and C)

Question 7

If a company has advance ticket sales totaling $2,000,000 for the upcoming football season, the receipt of cash would be journalized as:

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.F) A) and E)
G) A) and B)

Question 8

Employers can use a wage bracket withholding table to compute federal income taxes withheld from each employee's gross pay.

Accepted Answer

A) True 
 B)False

Question 9

Debt guarantees are:

Accepted Answer

A)  Never disclosed in the financial statements.
B)  Considered to be contingent liabilities.
C)  A bad business practice.
D)  Recorded as liabilities even though it is highly unlikely that the original debtor will default.
E)  Considered to be current liabilities.F) A) and B)
G) C) and D)

Question 10

All of the following statements regarding long-term liabilities are true except?

Accepted Answer

A)  Liabilities not expected to be paid within the longer of one year or the company's operating cycle are reported as long-term liabilities.
B)  Long-term liabilities include long-term notes payable, warranty liabilities, lease liabilities, and bonds payable.
C)  Liabilities that do not have a fixed due date, but are payable on demand, are reported as long-term liabilities.
D)  Long-term liabilities can be reported on the balance sheet in a single total or in multiple categories.
E)  A single long-term liability can be divided between current and noncurrent sections on the balance sheet.F) B) and C)
G) B) and D)

Question 11

Portia Grant is an employee who is paid monthly. For the month of January of the current year, she earned a total of $8,260. The FICA tax for social security is 6.2% and the FICA tax rate for Medicare is 1.45%. The FUTA tax rate of .6% and the SUTA tax rate of 5.4% are applied to the first $7,000 of an employee's pay. The amount of federal income tax withheld from her earnings was $1,325.17. Her net pay for the month is:

Accepted Answer

A)  $6,422.71
B)  $6,246.94
C)  $6,302.94
D)  $5,868.94
E)  $7,194.F) A) and C)
G) C) and E)

Question 12

_________________ are probable future payments of assets or services that a company is presently obligated to make as a result of past transactions or events.

Accepted Answer

The answer of _________________ are probable future payments of assets...

Question 13

The rate that a state assigns reflecting a company's stability or instability in employing workers is the:

Accepted Answer

A)  FICA rate.
B)  Tax withholding rate.
C)  Pay rate.
D)  Credit rating.
E)  Merit rating.F) B) and C)
G) D) and E)

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

A company's employer payroll tax rates are 0.6% for federal unemployment taxes, 5.4% for state unemployment taxes, 6.2% for FICA social security taxes on earnings up to $117,000, and 1.45% for FICA Medicare taxes on all earnings. Compute the W-2 Wage and Tax Statement information required below for the following employees: $$\begin{array} { | l | r | r | } 
\hline \text { Employee } & \text { Gross Earnings } & \text { Federal Inoome Taxes Withheld } \
\hline \text { A. Baylor } & \$ 14,000 & \$ 17,600 \
\hline \text { C. Jasmine } & 52,000 & 8,200 \
\hline
\end{array}$$ $\begin{array}{|l|r|r|} 
\hline& \text { A. Baylor } & \text { C. Jasmine } \
\hline \text { W-2 Information:}&\_\_\_\_&\_\_\_\_\
\hline \text {Feder al Inoome Tax Withheld }&\_\_\_\_&\_\_\_\_\
\hline \text { Wages, Tips, Other Compensation}&\_\_\_\_&\_\_\_\_\
\hline \text { social Security Tax Withheld}&\_\_\_\_&\_\_\_\_\
\hline \text { social Security Wages}&\_\_\_\_&\_\_\_\_\
\hline \text {Medicare Tax withheld }&\_\_\_\_&\_\_\_\_\
\hline \text { Medicare Wages}&\_\_\_\_&\_\_\_\_\
\hline
\end{array}$

Accepted Answer

The answer of A company's employer payroll tax rates are...

Question 16

Obligations to be paid within one year or the company's operating cycle, whichever is longer, are:

Accepted Answer

A)  Current assets.
B)  Current liabilities.
C)  Earned revenues.
D)  Operating cycle liabilities.
E)  Bills.F) A) and B)
G) A) and C)

Question 17

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.F) A) and C)
G) A) and E)

Question 18

Deposits of amounts payable to the federal government may be paid through federal depository banks.

Accepted Answer

A) True 
 B)False

Question 19

To compute the amount of tax withheld from an employee's pay, employers can use a __________________________ table.

Accepted Answer

wage brack...

Question 20

On April 12, Hong Company agrees to accept a 60-day, 10%, $4,500 note from Indigo Company to extend the due date on an overdue account. What is the journal entry needed to record the transaction by Indigo Company?

Accepted Answer

A)  Debit Notes Payable $4,500; credit Accounts Payable $4,500.
B)  Debit Accounts Payable $4,500; credit Notes Payable $4,500.
C)  Debit Accounts Receivable $4,500; credit Notes Payable $4,500.
D)  Debit Cash $4,500; credit Notes Payable $4,500.
E)  Debit Sales $4,500; credit Notes Payable $4,500.F) A) and E)
G) B) and D)

Exam 9: Accounting for Current Liabilities

The rate that a state assigns reflecting a company's stability or instability in employing workers is the:

Correct Answer
verified

Employers can use a wage bracket withholding table to compute federal income taxes withheld from each employee's gross pay.

Correct Answer
verified

A company sold $12,000 worth of bicycles with an extended warranty. It estimates that 2% of these sales will result in warranty work. The company should:

Correct Answer
verified

If a company has advance ticket sales totaling $2,000,000 for the upcoming football season, the receipt of cash would be journalized as:

Correct Answer
verified

A table that shows the amount of federal income tax to be withheld from an employee's pay is the:

Correct Answer
verified

All of the following statements regarding long-term liabilities are true except?

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Debt guarantees are:

Correct Answer
verified

On April 12, Hong Company agrees to accept a 60-day, 10%, $4,500 note from Indigo Company to extend the due date on an overdue account. What is the journal entry needed to record the transaction by Indigo Company?

Correct Answer
verified

Obligations to be paid within one year or the company's operating cycle, whichever is longer, are:

Correct Answer
verified

Companies may use a special bank account solely for the purpose of paying employees, by depositing an amount equal to the total employees' net pay into the account each pay period and drawing the employees' payroll checks on the account. This account is a(n) :

Correct Answer
verified

_________________ are probable future payments of assets or services that a company is presently obligated to make as a result of past transactions or events.

Correct Answer
verified

Correct Answer
verified

Each employee records the number of withholding allowances claimed on the withholding allowance certificate that is filed with the employer, which is the form W-4.

Correct Answer
verified

On December 1, Watson Enterprises signed a $24,000, 60-day, 4% note payable as replacement of an account payable with Erikson Company. What amount of interest expense is accrued at December 31 on the note?

Correct Answer
verified

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

Correct Answer
verified

Deposits of amounts payable to the federal government may be paid through federal depository banks.

Correct Answer
verified

Correct Answer
verified

To compute the amount of tax withheld from an employee's pay, employers can use a __________________________ table.

Correct Answer
verified
wage brack...
View Answer

Exam 9: Accounting for Current Liabilities

The rate that a state assigns reflecting a company's stability or instability in employing workers is the:

Correct AnswerverifiedShow Answer

Employers can use a wage bracket withholding table to compute federal income taxes withheld from each employee's gross pay.

Correct AnswerverifiedShow Answer

A company sold $12,000 worth of bicycles with an extended warranty. It estimates that 2% of these sales will result in warranty work. The company should:

Correct AnswerverifiedShow Answer

If a company has advance ticket sales totaling $2,000,000 for the upcoming football season, the receipt of cash would be journalized as:

Correct AnswerverifiedShow Answer

A table that shows the amount of federal income tax to be withheld from an employee's pay is the:

Correct AnswerverifiedShow Answer

All of the following statements regarding long-term liabilities are true except?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Debt guarantees are:

Correct AnswerverifiedShow Answer

On April 12, Hong Company agrees to accept a 60-day, 10%, $4,500 note from Indigo Company to extend the due date on an overdue account. What is the journal entry needed to record the transaction by Indigo Company?

Correct AnswerverifiedShow Answer

Obligations to be paid within one year or the company's operating cycle, whichever is longer, are:

Correct AnswerverifiedShow Answer

Companies may use a special bank account solely for the purpose of paying employees, by depositing an amount equal to the total employees' net pay into the account each pay period and drawing the employees' payroll checks on the account. This account is a(n) :

Correct AnswerverifiedShow Answer

_________________ are probable future payments of assets or services that a company is presently obligated to make as a result of past transactions or events.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Each employee records the number of withholding allowances claimed on the withholding allowance certificate that is filed with the employer, which is the form W-4.

Correct AnswerverifiedShow Answer

On December 1, Watson Enterprises signed a $24,000, 60-day, 4% note payable as replacement of an account payable with Erikson Company. What amount of interest expense is accrued at December 31 on the note?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Deposits of amounts payable to the federal government may be paid through federal depository banks.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

To compute the amount of tax withheld from an employee's pay, employers can use a __________________________ table.

Correct Answerverifiedwage brack...View AnswerShow Answer

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wage brack...
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