Question 1

According to a summary of the payroll of Scotland Company, $450,000 was subject to the 7.0% social security tax and $500,000 was subject to the 1.5% Medicare tax. Federal income tax withheld was $98,000. Also, $15,000 was subject to state (4.2%)  and federal (0.8%)  unemployment taxes. The journal entry to record accrued salaries would include:

Accepted Answer

A)   a debit to Salary Payable of $450,000
B)   a credit to Salary Payable of $500,000
C)   a debit to Salary Expense of $500,000
D)   a credit to Salary Expense of $450,000E) C) and D)
F) A) and B)

Question 2

An unfunded pension liability is reported on the balance sheet as

Accepted Answer

A)   current liability
B)   owner's equity
C)   long-term liability
D)   current liability or long-term liability, depending upon when the pension liability is to be paidE) A) and B)
F) A) and C)

Question 3

An employee receives an hourly rate of $15, with time and a half for all hours worked in excess of 40 during the week. Payroll data for the current week are as follows: hours worked, 48; federal income tax withheld, $120; cumulative earnings for the year prior to this week, $24,500; Social security tax rate, 6% on maximum of $100,000; and Medicare tax rate, 1.5% on all earnings; state unemployment compensation tax, 3.4% on the first $7,000; federal unemployment compensation tax, .8% on the first $7,000. What is the net amount to be paid to the employee?

Accepted Answer

A)   $568.74
B)   $601.50
C)   $660.00
D)   $574.90E) A) and B)
F) None of the above

Question 4

Which of the following is not an internal control procedure for payroll?

Accepted Answer

A)   observe clocking in and out time for the employees
B)   payroll depends on a fired employee's supervisor to notify them when an employee has been fired
C)   payroll requires employees to show identification when picking up their paychecks
D)   changes in pay rates on a computerized system must be tested by someone independent of payrollE) All of the above
F) A) and C)

Question 5

The journal entry a company uses to record partially funded pension rights for its salaried employees, at the end of the year is

Accepted Answer

A)   debit Salary Expense; credit Cash
B)   debit Pension Expense; credit Unfunded Pension Liability
C)   debit Pension Expense; credit Unfunded Pension Liability and Cash
D)   debit Pension Expense; credit CashE) B) and C)
F) All of the above

Question 6

Darius Company has the following information for the pay period of January 15 - 31, 20xx.
  Assuming no employees are subject to ceilings for their earnings, calculate Salaries Payable and Employer Payroll Taxes Payable.

Accepted Answer

The answer of Darius Company has the following information for...

Question 7

Excel Products Inc. pays its employees semimonthly. The summary of the payroll for December 31, 2012 indicated the following:

Accepted Answer

The answer of Excel Products Inc. pays its employees semimonthly....

Question 8

The journal entry a company uses to record the estimated accrued product warranty liability is

Accepted Answer

A)   debit Product Warranty Expense; credit Product Warranty Payable
B)   debit Product Warranty Payable; credit Cash
C)   debit Product Warranty Expense; credit Cash
D)   debit Product Warranty Payable; credit Product Warranty ExpenseE) A) and B)
F) B) and D)

Question 9

Which of the following is an example of a variable component of a payroll system?

Accepted Answer

A)   hours worked
B)   medicare tax rate
C)   rate of pay
D)   social security numberE) B) and C)
F) B) and D)

Question 10

The following totals for the month of June were taken from the payroll register of Young Company:  The entry to record the accrual of employer's payroll taxes would include a

Accepted Answer

A)   debit to Payroll Taxes Expense for $2,498
B)   debit to Social Security and Medicare Tax Payable for $2,250
C)   debit to Payroll Taxes Expense for $1,373
D)   Debit to Payroll Tax Expense for $1,125E) B) and C)
F) A) and C)

Question 11

Zennia Company provides its employees with varying amount of vacation per year, depending on the length of employment. The estimated amount of the current year's vacation cost is $135,000. The journal entry to record the adjusting entry required on December 31, the end of the current year, to record the current month's accrued vacation pay is

Accepted Answer

A)   $135,000
B)   $67,500
C)   $0
D)   $11,250E) None of the above
F) A) and B)

Question 12

The total net pay for a period is determined from the payroll register.

Accepted Answer

A) True 
 B)False

Question 13

Assuming a 360-day year, proceeds of $48,750 were received from discounting a $50,000, 90-day note at a bank. The discount rate used by the bank in computing the proceeds was

Accepted Answer

A)   6.25%
B)   10.00%
C)   10.26%
D)   9.75%E) None of the above
F) A) and D)

Question 14

Payroll taxes levied against employees become liabilities

Accepted Answer

A)   the first of the following month
B)   when salary is accrued
C)   when data is entered in a payroll register
D)   at the end of an accounting periodE) B) and C)
F) A) and D)

Exam 10: Current Liabilities and Payroll

Darius Company has the following information for the pay period of January 15 - 31, 20xx. Assuming no employees are subject to ceilings for their earnings, calculate Salaries Payable and Employer Payroll Taxes Payable.

Correct Answer
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Correct Answer
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The journal entry a company uses to record the estimated accrued product warranty liability is

Correct Answer
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The following totals for the month of June were taken from the payroll register of Young Company: The entry to record the accrual of employer's payroll taxes would include a

Correct Answer
verified

Payroll taxes levied against employees become liabilities

Correct Answer
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An unfunded pension liability is reported on the balance sheet as

Correct Answer
verified

The total net pay for a period is determined from the payroll register.

Correct Answer
verified

Excel Products Inc. pays its employees semimonthly. The summary of the payroll for December 31, 2012 indicated the following:

Correct Answer
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Correct Answer
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Assuming a 360-day year, proceeds of $48,750 were received from discounting a $50,000, 90-day note at a bank. The discount rate used by the bank in computing the proceeds was

Correct Answer
verified

Which of the following is not an internal control procedure for payroll?

Correct Answer
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Correct Answer
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Which of the following is an example of a variable component of a payroll system?

Correct Answer
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The journal entry a company uses to record partially funded pension rights for its salaried employees, at the end of the year is

Correct Answer
verified

Exam 10: Current Liabilities and Payroll

Darius Company has the following information for the pay period of January 15 - 31, 20xx. Assuming no employees are subject to ceilings for their earnings, calculate Salaries Payable and Employer Payroll Taxes Payable.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The journal entry a company uses to record the estimated accrued product warranty liability is

Correct AnswerverifiedShow Answer

The following totals for the month of June were taken from the payroll register of Young Company: The entry to record the accrual of employer's payroll taxes would include a

Correct AnswerverifiedShow Answer

Payroll taxes levied against employees become liabilities

Correct AnswerverifiedShow Answer

An unfunded pension liability is reported on the balance sheet as

Correct AnswerverifiedShow Answer

The total net pay for a period is determined from the payroll register.

Correct AnswerverifiedShow Answer

Excel Products Inc. pays its employees semimonthly. The summary of the payroll for December 31, 2012 indicated the following:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Assuming a 360-day year, proceeds of $48,750 were received from discounting a $50,000, 90-day note at a bank. The discount rate used by the bank in computing the proceeds was

Correct AnswerverifiedShow Answer

Which of the following is not an internal control procedure for payroll?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is an example of a variable component of a payroll system?

Correct AnswerverifiedShow Answer

The journal entry a company uses to record partially funded pension rights for its salaried employees, at the end of the year is

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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