accounting c100

Assume the gross amount of an invoice is $100 and a discount of 20% is allowed. The net amount is

$80

Merchandise is sold on account for $90, and the sale is subject to a retail sales tax of $5.40. The sales account should be credited for

$84.60.

Which of the following credit terms allows a discount of 3% if payment is made within 15 days from the date of the invoice; otherwise, the total amount of the invoice must be paid within 30 days from its date?

3/15, n/30

According to the assumption used in this text, employers are required to withhold Social Security taxes on the first ____ of each employee's earnings.

$110,100

Assume the gross amount of an invoice is $100 and a discount of 20% is allowed. The amount of the trade discount totals

$20

An invoice of $237.50 dated April 2 is subject to credit terms of 2/10, n/30. The amount to be paid if the invoice is paid on or before April 12 is

$232.75.

Melissa Taylor has gross earnings of $425 and withholdings of $26.35 for Social Security tax, $6.16 for Medicare tax, and $35 for federal income tax. Her employer pays $26.35 for Social Security tax, $6.16 for Medicare tax, $3 for FUTA tax, and $9 for SUTA tax. The total cost of Melissa to her employer is

$469.51.

(Appendix) When the net-price method of recording purchases is used, the debit to Purchases is for the

amount of the invoice less available cash discounts.

After estimating its payroll for the year, an employer usually pays workers' compensation insurance

at the beginning of the year.

Total sales less the sales price of any goods returned by customers, less any reduction in price given to customers, less cash discounts allowed by the seller, is called

cost of goods sold

If the seller permits merchandise to be returned or an allowance to be made, it is customary for the seller to issue a(n)

credit memorandum.

(Appendix) A purchase was made for $200 on account with credit terms of 2/10, n/30. The purchase was recorded using the net-price method. If payment is made 25 days later, the entry to record the payment will be to

debit Accounts Payable for $196, debit Purchases Discounts Lost for $4, and credit Cash for $200.

To journalize the payment of Social Security taxes to the IRS, the correct entry would be

debit Social Security Tax Payable and credit Cash.

When a single-check for payroll is prepared and deposited into a special payroll bank account, which of the following entries is made to record the deposit?

debit Wages and Salaries Expense; credit Cash Hide Feedback

An employee's total earnings is referred to as net pay.

false

Special discounts from list prices, granted by manufacturers to different classes of customers, are known as

manufacturers' discount.

The needs of management and the requirements of various federal and state laws make it necessary for employers to keep records that will provide all of the following information for each employee EXCEPT

number of hours the employee works as a volunteer for the community.

Employers usually prepare which of the following types of payroll records?

payroll register, employee earnings record, and payroll check

Examples of employees include all of the following EXCEPT

public accountants.

A written order by a buyer for merchandise or other property specified in a purchase requisition is known as a

purchase order

A form used to request the responsible person or department to purchase merchandise or other property is known as a

purchase requisition.

Merchandise returned by the customer for a refund is called a

sales return

The source document of a sales transaction is called a

sales ticket

The employer pays which of the following to the Internal Revenue Service?

the employer's Social Security and Medicare taxes

The cost of workers' compensation insurance for the employer depends on all of the following EXCEPT

the number of employees.

A schedule of accounts receivable is prepared to

verify that the sum of the accounts receivable ledger balances equals the Accounts Receivable balance.

An amount of an employee's gross pay which is exempt from federal income tax withholding is a(n)

withholding allowance.

A list showing the amount due from each customer as of a specified date is known as a

work sheet.

Which of the following accounts is NOT used to account for merchandise sales transactions?

Accounts Payable

The account that should be credited for the total income tax withheld from employee's earnings is

Employee Income Tax Expense.

Form 941 is a(n)

Employer's Quarterly Federal Tax Return.

Which of the following indicates that a shipment is free on board at the destination of the shipment and the seller will pay the transportation costs?

FOB destination

Compensation expressed in terms of hours, weeks, or units produced for skilled or unskilled labor is usually referred to as salary.

False

Employers may deposit Social Security and Medicare taxes at a Federal Reserve Bank or other authorized commercial bank using

Form-8109

A credit memorandum for $156 (sale price of merchandise $150; sales tax of $6) was issued to a customer for goods returned that had been purchased on account. To enter this transaction properly,

Sales would not be debited

An independent contractor performs a service for a fee and does not work under the control and direction of the company paying for the service.

True

FICA taxes include amounts for both Social Security and Medicare programs.

True

The employer usually pays the entire cost of

Workers' Compensation Insurance.

A separate record of each employee's earnings is called a(n)

employee earning record

The federal unemployment tax is levied on

employers and is deducted from employees' earnings.

Any person who agrees to perform a service for a fee and is not subject to the control of those for whom the service is performed is called a(n)

independent contractor.

A business that purchases clothing, furniture, computers, or other products to sell to customers is a

not-for-profit business.

Compensation normally expressed in biweekly, monthly, or annual terms for managerial or administrative services is called

salary

A source document prepared by the seller that lists the items shipped, their cost, and the method of shipment is commonly referred to by the seller as the

sales invoice.

The act that requires most employers to withhold certain amounts from employees' earnings for contributions to the Social Security and Medicare programs is called the

Federal Insurance Contributions Act.

The date on which an employer must pay Social Security and Medicare taxes is

dependent on the amount of the taxes.

An Employer Identification Number (EIN) is obtained by the employer from the

Internal Revenue Service.

The cost of merchandise purchased during the period less any discounts granted by suppliers and amounts returned to suppliers and amounts of any allowances made by suppliers is called

Net purchases

The account that is credited with amounts withheld from an employee's earnings for any pension plan contribution is

Pension Plan Taxes Payable.

Employers who have $100,000 or more due in federal income tax withholding and Social Security and Medicare taxes on any day during the current quarter should journalize the debt and pay at the end of the

Quarter

The payroll register for the week ended May 28 for J & D United indicates gross earnings of $4,000 and total deductions of $1,200. The total of all the credit entries for the payroll for the week ending May 28 would be

$,4000

For this text, it is assumed that the maximum amount of earnings subject to FICA taxes is

$110,500.

Jillian Diaz receives a regular salary of $1,500 a month and is entitled to overtime pay at the rate of one and one-half times the regular hourly rate for any time worked in excess of 40 hours per week. Diaz's overtime pay rate is

$12.98

The payroll register for the week ended April 15 for Ultimate Tanning Spa indicates gross earnings of $4,000 and total deductions of $1,200. The journal entry for the payroll for this week would include which of the following credit amounts to Cash?

$2,800

The payroll register for the week ended February 14 for Luxury Homes Construction Company indicates gross earnings of $4,000 and total deductions of $1,200. The entry for the Wages and Salaries Expense ending February 14 would be a

$4,000 debit.

A self-employment tax is required of an individual who owns his or her own business and makes

$400 or more

Joel Trump is paid one and one-half times the regular hourly rate for all hours worked in excess of 40 hours per week and double time for work on Sunday. Trump's regular rate is $8 per hour. During the week ended October 10, he worked 9 hours each day from Monday through Friday, 6 hours on Saturday, and 4 hours on Sunday. Trump's total earnings for the week ended October 10 are

$516

Denise Cruz receives a regular salary of $900 a month and is entitled to overtime pay at the rate of one and one-half times the regular hourly rate for any time worked in excess of 40 hours per week. Cruz's overtime rate of pay is

$7.79

Merchandise is sold on account for $90, and the sale is subject to a retail sales tax of $5.40. The amount that should be added to Accounts Receivable would be

$95.40

Which of the following indicates that the shipment is free on board at the point of origin of shipment and the buyer must pay all transportation costs?

4/10, EOM

Which of the following is a payroll tax normally paid by both the employee and the employer?

FICA tax

A self-employment tax is a contribution to the

Social Security and Medicare programs.

Each employee is required to furnish the employer with which of the following forms?

W-4

The account that is debited for the total amount of the gross earnings of all employees for each pay period is

Wages and Salaries Expense.

After the posting of the accounts payable ledger is completed, the total of the accounts payable ledger balances should equal the balance of which of the following general ledger accounts?

accounts payable

A discount offered as an inducement for prompt payment of an invoice is called a(n)

cash discount.

For the merchant, bank credit card sales are treated in a manner similar to

cash sales

A summary accounts receivable account is called a(n)

controlling account

Merchandise inventory available at the beginning of the period plus cost of goods purchased minus merchandise inventory at the end of the period equals

cost of goods sold

A schedule of accounts receivable is normally prepared

daily

A key source of information for computing employer payroll taxes is the

payroll register.

Copies of a sales invoice are used to do all of the following EXCEPT

record the sale.

Employers who have less than $2,500 due in federal income tax withholding and Social Security and Medicare taxes at the end of the quarter should journalize the debt and pay at the end of the

year