Account Payable

Which of the following is not an important step before approving a payment?

Refer to the Sales Order issued.

SFAS 109 establishes standards of financial accounting and reporting for income taxes that are currently payable and for

the tax consequences of revenues and expenses included in taxable income in a different year from the year in which they are recognized for financial reporting purposes.

Accrual Basis means

the most commonly used accounting method which reports income when earned and expenses when incurred,

Debit memos are required for

the payments made on Purchase Orders

If a prepaid expense is expiring (the final month is expensed), and the company has not received an invoice for the upcoming prepaid period, the accounting should:

Continue to book the monthly expense in the upcoming month and contact the company to find if an invoice will be issued for the coming year

On July 1, 2006, Ran County issued reality tax assessments for its fiscal year ended June 30, 2007. The assessments were to be paid in two equal installments. On September 1, 2006, Day & Co. purchased a warehouse in Ran County. The purchase price was reduced by a credit for accrued realty taxes. The company did not record the entire year's real estate tax obligations, but instead records tax expenses at the end of each month by adjusting prepaid real estate taxes payable, as appropriate. On November 1, 2006, it paid the first installment of $12000 for realty taxes. What amount of this payment should it record as a debit to real estate taxes payable?

$12,000

Barnel Corp. owns and manages 19 apartment complexes. On signing a lease, each tenant has to pay the first and the last month's rent and a $500 refundable security deposit. The security deposits are rarely refunded in total because cleaning costs of $150 per apartment are almost always deducted. About 30% of the time, the tenants are also charged for damages to the apartment, which typically costs $100 to repair. If a one year lease deed is signed on a $900 per month apartment, what amount would the company report as refundable security deposit?

$350

Hudson Hotels collects 15 % as city sales tax on room rentals, in addition to $2 per room, per night, as occupancy tax. Sales tax for each month is due at the end of the following month, and occupancy tax are due 15 days after the end of each calendar quarter. On January 3, 2008, Hudson paid its November 2007 sales tax and occupancy tax for the fourth quarter of 2007. Additional information pertaining to Hudson's operations is as follows: 2007 Room Rentals Room Nights October $100,000 $1,100 November $110,000 $1,200 December $150,000 $1,800 What amounts should Hudson report as sales tax payable and occupancy tax payable in its December 31, 2007 balance sheet? Sales Tax Occupancy Taxes

$54,000 $8,200

Ross & Co. pays all salaried employees on Monday for the 5-day work week ended the previous Friday. The last payroll recorded for the year ended December 31, 2004 was for the week ended December 25, 2004. The payroll for the week ended January 1, 2005 included regular weekly salaries of $80000 and vacation pay of $ 25000 for the vacation time earned in 2004 but not taken by December 31, 2004. Ross had an accrued liability of $20000 for vacation pay as on December 31, 2003. In its December 31, 2004 balance sheet, what amount should Ross report as accrued salary and vacation pay?

$89000

In its 2007 income statement, Cere & Co. has reported an income of $300,000 before income taxes. Cere estimated that, because of permanent differences, taxable income for 2007 would be $280,000. During 2007, Cere made estimated tax payments of $50,000, which were debited to income tax expense; Cere is subject to a 30% tax rate. What amount should Cere report as income tax expense?

280,000* 30%=$84,000

Tax Accounting Services pays off $200 on account. To record this transaction for Tax Accounting Services, the Cash account is credited and the __________ account is debited.

Accounts Payable

Which of the following accounts has a debit balance?

Accounts Payable account

Which of the following methods can be used to value inventory in QuickBooks?

Average cost

What is the difference between billable and non-billable expenses

Billable expenses are the expenses incurred by you on behalf of your customer in performing duties / rendering services and supplying goodsand Non-billable expenses are the expenses incurred by you in carrying out your own business / duties and performing your own responsibilities

What is Accounts Payable Turnover Ratio?

Cost of Goods Sold / Accounts Payable

Under which head does VAT reflect in the Balance Sheet?

Creditors

Receipts from cash sales of $7,500 were recorded incorrectly as $5,700. What entry is required in the depositor's accounts?

Debit Cash: Credit Cash Sales

When a deposit is used as payment, what is the journal entry from the customer's (the person who made the deposit) perspective?

Debit Service Expense, credit Other Advances

What does the acronym EFT stand for?

Electronic Funds Transfer

When are invoices treated as having been paid short?

If any discount for early payment is allowed

A good example of a typical prepaid expense is:

Insurance

From the Accounts Payable point of view, what are the main problems that arise between Accounts Payable and Purchasing?

Missing information on Purchase Orders Missing information about discounts Delays

What is the report generated to find the net purchases from each vendor regardless of how payments were recorded called?

Purchases by vendor summary

Streamlined Sales Tax is a national effort by which of the following?

The State Government

Of the following, which is a typical situation involving a deposit?

The business has leased a new location and is required to put a deposit for the last month's rent

How will you track the deposits that clients pay to the vendors?

Track deposits as negative balances in Accounts Payable

When clients have customers who are also vendors, what is the best way to offset Accounts Payable against Accounts Receivable?

Use multiple journal entries

Buck & Co. receives deposits from its customers to protect itself against non-payments for future services. These deposits should be classified by the company as

a liability

A bill is a form on which you record details of

a purchase made by a vendor to whom the Company owe money

Recording expenditure made, but not yet paid, to a vendor is an example of:

an accrued payable transaction

The correct journal entry to record a return of inventory purchased on credit basis using a perpetual inventory system includes:

debit Accounts Payable, credit Inventory

The correct journal entry to record a purchase of inventory on credit using a perpetual inventory system includes:

debit Inventory, credit Accounts Payable