Accounting Final Prep

An employee whose regular hourly rate is $10.80 and whose overtime rate is 1.5 times the regular rate worked 43 hours in one week. In the payroll register, the employer should record an overtime premium of

16.20

On September 1, Jerry's Lighting purchased merchandise with a list price of $6,900 with credit terms of 2/10, n/30. On September 3, Jerry's returns $1,500 of the merchandise. If payment is made within the discount period, the total amount paid by Jerry's Lighting

5292

a debit to cash for 100

A check issued for $588 to pay a vendor on account was recorded in the firm's records as $688; the canceled check was properly listed on the bank statement at $588. The journal entry for this reconciling item would include:

17000

A company reported gross profit of $84,000, total operating expenses of $67,000 and interest expense of $5,100. What is the net income from operations?

an addition of $9 to the book balance

A firm appropriately wrote a check for $78 but entered the amount as payment of $87 in its records. On a bank reconciliation statement this error would be shown as

15400

A firm's bank reconciliation statement shows a book balance of $15,820, an non-sufficient funds check of $400, and a service charge of $20. Its adjusted book balance is

17570

A firm's bank reconciliation statement shows a book balance of $21,000, an non-sufficient funds check of $3,400, and a service charge of $30. Its adjusted book balanc

an expense account with a normal debit balance

A freight in account is

employee

A person who is hired by a company and who is under the control and direction of the employer is called a(n)__________.

True

A receiving report is prepared to show the quantity and condition of the goods received.

False

A sales allowance is when a firm negotiates a reduction in the sales price of merchandise for paying within a predetermined number of days.

independent contractor

A(n)__________ is paid by the company to carry out a specific task or job but is not under the direct supervision, control, and direction of the company.

1425

Abe & Anna Split Ice Cream Parlor paid $1,900 cash for a 4-month advertising contract on September 30, 20X1. The amount of advertising expense reported on the Income Statement for the year ending December 31, 20X1, for this advertising contract is

used in one period but not paid for until a later period.

Accrued expenses are

41000

After the two adjusting entries for merchandise inventory for Marley Motorcycles have been entered on the worksheet, the Income Summary account in the Adjusted Trial Balance section has a debit of $41,000 and a credit of $46,000. The amount of merchandise inventory at the beginning of the year is:

277.64

Alfred Spindle earned gross wages of $2,230 for the week ended January 18, 20X1. His gross wages year to date, prior to his January 18 paycheck, were $4,070. He had $130 withheld from his pay for federal income taxes, and $84 for health insurance. Social Security and is 6.2% and Medicare tax is 1.45%; the federal unemployment tax rate is 0.6% and the state unemployment tax rate is 4.2%, both on a maximum of $7,000 per each employee's annual earnings. What is the total employer payroll tax expense associated with Alfred's January 18, 20X1, paycheck?

the individual working record

All details related to an employee's earnings, deductions, and net pay throughout the year would be found in

1500

An adjusting entry was made for $600 of accrued salaries at the end of 20X1. The adjusting entry was then reversed. To record the first payroll of 20X2, which totaled $1,500, Salaries Expense should be debited for $___________________.

30

An employee whose regular hourly rate is $12 and whose overtime rate is 1.5 times the regular rate worked 45 hours in one week. The employer should record an overtime premium of__________ in the payroll register.

created for each employee

An individual earnings record is__________.

true

Assuming a periodic inventory system is used, Purchases Discounts are subtracted from Purchases when determining the net delivered cost of purchases

debit Accounts Payable and credit Purchases Returns and Allowances.

Assuming a periodic inventory system is used, the entry to record a return of merchandise purchased on credit would:

debit Purchases $6,100, debit Freight In $430; credit Accounts Payable $6,530

Assuming a periodic inventory system is used, the journal entry to record the purchase of merchandise on account for $6,100 with freight of $430 prepaid and added to the invoice is:

debit Purchases $900, debit Freight in $65; credit Accounts Payable $965.

Assuming a periodic inventory system, the journal entry to record the purchase on account of $900 of merchandise with freight of $65 prepaid and added to the invoice is:

exempt employees

Because salaried employees who hold supervisory or managerial positions generally are not subject to wage and hour laws, they are known as__________.

true

Cash Short or Over is an expense account when it has a debit balance.

474100

For the current fiscal year, Purchases were $340,000, Purchases Returns and Allowances were $4,900 and Freight In was $28,000. If the beginning merchandise inventory was $205,000 and the ending merchandise inventory was $94,000, the Cost of Goods Sold is:

Medicare tax

For which of the following is there no limit to the amount of wages subject to the tax?

1200

George's Gameroom had two employees with the following earnings information: EmployeeCumulative Earnings as of 11/30/20X1Gross Earnings for Week Ending 12/15/20X1Barbara Brown$ 5,300$ 2,700Hillary Adams$ 131,700$ 2,900 Use the table above and calculate how much of Hillary's December 15 paycheck is still subject to Social Security tax given that the tax is levied on the first $132,900 of annual wages and the Medicare tax rate is 1.45% on all earnings.

separation

Good internal control requires a(n) __________ of duties.

2728.50

Hour Place Clock Shop sold a grandfather clock for $2,550 subject to a 7% sales tax. The entry in the general journal will include a debit to Accounts Receivable for

Correct answer: debit Wages Expense $5,200; credit Wages Payable $5,200

Hugh Morris Company pays weekly wages of $13,000 every Friday for a five day week ending on that day. If the last day of the year is on Tuesday, the adjusting entry to record the accrued wages is:

The account has a normal credit balance and is reported on the balance sheet.

Identify the statement below that is true regarding the Allowance for Doubtful Accounts account.

decrease to accounts payable.

If a business pays $1,100 on account to a creditor, the effect of the payment is a decrease to cash and a:

false

If a business uses pre-numbered purchase orders, it is not necessary to account for every purchase order.

consider this check as outstanding when preparing the bank reconciliation.

If a check written by a firm is not canceled by the bank and returned with the month's bank statement, the firm should

312000

If a firm had sales of $340,000 during a period and sales returns and allowances of $28,000, its net sales were

14045

If a firm's bank reconciliation statement shows a bank statement balance of $13,625, total deposits in transit of $1,570, and total outstanding checks of $1,150, the adjusted bank balance is ____________________.

full

If a payee indicates, as part of the endorsement, the name of the person, firm, or bank to whom the check is to be payable, the payee has made a(n) ____________________ endorsement.

9100 credit

If an account has a credit balance of $8,400 in the Trial Balance section of a worksheet and there is a credit of $700 in the Adjustments section, the account balance in the Adjusted Trial Balance section of the worksheet is

1400 debit

If an account has a debit balance of $2,000 in the Trial Balance section of a worksheet and there is a credit of $600 in the Adjustments section, the account balance in the Adjusted Trial Balance section of the worksheet is a

1110 debit

If an account has a debit balance of $770 in the Trial Balance section of a worksheet and there is a debit of $340 in the Adjustments section, the account balance in the Adjusted Trial Balance section of the worksheet is a

a debit to Workers' Compensation Insurance Expense and a credit to Workers' Compensation Insurance Payable.

If at the end of the year the firm owes a balance for workers' compensation insurance, the adjusting entry includes a

trie

If the Income Summary account has a credit balance after revenues and expenses are closed, the firm had a net income for the fiscal period.

true

If the Income Summary account has a credit balance after revenues and expenses are closed, the firm had a net income for the fiscal period.

306

Jerry Little's gross wages as of October 31 were $120,200. He earned gross wages of $4,000 for the pay period ended November 15, 20X1. Deducted from his paycheck this period, were federal income taxes of $400, state income taxes of $150, social security of 6.2% on the first $132,900 and Medicare tax of 1.45%. State Unemployment Tax is 4%, and Federal Unemployment tax is 0.6% on the first $7,000 of annual earnings. Calculate the employer payroll income taxes associated with Jerry's November 15 paycheck.

557.13

Lacy Crawford has a regular hourly rate of $17.50. In a week when she worked 38 hours and had deductions of $57 for federal income tax, $41.23 for social security tax, and $9.64 for Medicare tax, her net pay was

A debit to sales discount for $35

Lamps Unlimited, a wholesaler, sold several crates of lighting for $3,500 on account, to a customer with credit terms of 1/20, n/60. If the customer pays within the discount period, the journal entry to record the receipt of payment would include:

a debit to Salaries Expense for $400.00

Lila Harrison is the sole employee of ABC Grocers. Her gross pay for the week was $400. She had deductions of $50 for federal income tax, $24.80 for social security tax, and $5.80 for Medicare tax. The journal entry to record her gross pay would include:

a debit to salaries expense for 400

Lila Harrison is the sole employee of ABC Grocers. Her gross pay for the week was $400. She had deductions of $50 for federal income tax, $24.80 for social security tax, and $5.80 for Medicare tax. The journal entry to record her gross pay would include:

1696

Merchandise is sold on credit for $1,600 plus 6 percent sales tax. The journal entry to record the sale will include a debit to Accounts Receivable for

651

Merchandise is sold on credit for $620 plus 5 percent sales tax. The journal entry to record the sale will include a debit to Accounts Receivable for

Michael will pay $87.00 and his employer will also pay $87.00.

Michael Miller is paid twice a month and had total gross earnings as of 10/15 of $127,000. His gross earnings for the period ending 10/31 were $6,000. If social security taxes are 6.2% on a maximum earnings threshold of $132,900 per year and Medicare tax is 1.45% on all earnings, how much Medicare tax will be paid by Michael and how much will be paid by his employer for the period ending 10/31?

1007.69

Mr. Zee worked 46 hours during the week ended January 18, 20X1. He is paid $25 per hour, and is paid time and a half for all hours over 40 in a week. He had $103 withheld from his pay for federal income taxes, and $20.60 withheld for health insurance. The combined social security and Medicare tax rate is 7.65%, and the federal and state unemployment tax rates are 0.6% and 3.8%, respectively. All earnings are taxable. What is the net pay for Mr. Zee's current paycheck?

18000

Nadal, Incorporated owes Wozniaki Company $13,060 as of April 1. During April, Nadal, Incorporated purchased $14,300 of merchandise from Wozniaki Company and made payments on account to Wozniaki Company totaling $9,360. The amount Nadal, Incorporated owes Wozniaki Company on April 30 is:

false

Net income can be found on the worksheet in an income statement column but cannot be found in a balance sheet column.

105

On April 1, 20X1, a firm accepted a 3-month, 7 percent note for $6,000 from a customer with an overdue balance. The interest income on this note for the year ended June 30, 20X1, is

Accounts Payable debit 200Purchase Returns and Allowances credit 200

On April 5, Fair Coffee, Incorporated purchased merchandise with a list price of $1,000 and credit terms 2/10, n/30. On April 6, Fair Coffee returns $200 of the merchandise. Assuming Fair Coffee uses a perpetual inventory system, the journal entry on April 6, to record the return, would be:

federal income taxes withheld and social security and Medicare taxes.

On Form 941, the Employer's Quarterly Federal Tax Return, a firm calculates its liability for the quarter for

Sales Returns and Allowances debit 2,000 Accounts Receivable/J.Hines credit 2,000Merchandise Inventory debit 500 Cost of Goods Sold credit 500

On January 3, Gourmet Cakes sold $15,000 of merchandise on account to Jerry Hines. On January 10, Jerry returned $2,000 of the merchandise because they bought too much. Assuming the cost of the returned merchandise to Gourmet Cakes was $500 and they use a perpetual inventory system, the journal entry on January 10, to record the return of the merchandise from Jerry Hines, would be:

5250

On June 1, 20X1, a firm purchased a 1-year insurance policy for $9,000 and paid the full premium in advance. The insurance expense associated with this policy for the year ending December 31, 20X1, is

Debit Unearned Subscriptions $1,350; credit Subscriptions Income $1,350.

On October 1, 20X1, Paige Turner Publishing received $5,400 in cash for monthly subscriptions covering one year, recording the entry as a debit to Cash and a credit to Unearned Subscriptions. The correct adjusting entry at December 31, 20X1, is

320

On September 1, 20X1, a firm accepted a 6-month, 8% note for $12,000 from a customer with an overdue account balance. The accrued interest recorded for this note on December 31, 20X1, is

11446

On September 1, Jerry's Lighting purchased merchandise with a list price of $13,500 with credit terms of 3/10, n/30. On September 3, Jerry's returns $1,700 of the merchandise. If payment is made within the discount period, the total amount paid by Jerry's Lighting is:

5292

On September 1, Jerry's Lighting purchased merchandise with a list price of $6,900 with credit terms of 2/10, n/30. On September 3, Jerry's returns $1,500 of the merchandise. If payment is made within the discount period, the total amount paid by Jerry's Lighting is:

1800 debit

Prepaid Insurance has a debit balance in the Trial Balance section of the worksheet of $3,100 and a credit entry of $1,300 in the adjustments section of the worksheet. The balance of Prepaid Insurance in the Adjusted Trial Balance section of the worksheet is a

depreciation

Property, plant, and equipment are long-term, tangible assets that require end-of-period adjustments for__________.

2091.75

Rick O'Shea, the only employee of Hunter Furniture Company, makes $30,000 per year and is paid once a month. For the month of July, his federal income taxes withheld are $180, state income taxes withheld are $37, social security tax is 6.2%, Medicare tax is 1.45%, State Unemployment Tax is 4%, and Federal Unemployment tax is 0.6%. What is Rick's net pay for July?

3694

Rick O'Shea, the only employee of Hunter Furniture Company, makes $48,000 per year and is paid once a month. For the month of July, his federal income taxes withheld are $330, state income taxes withheld are $52, social security taxis 6.2%, Medicare tax is 1.45%, State Unemployment Tax is 5.4%, and Federal Unemployment tax is 0.8%. What is Rick's net pay for July?

28000

Robin Banks, incorporated owns an armored truck which was purchased for $88,000. The Accumulated Depreciation on the truck is $60,000. The book value of the armored truck is

103.09

Roy DeSoto earns a regular hourly salary of $24.50. He is paid time-and-a-half for all hours in excess of 40 in the week. For the week ended March 8, 20X1, he worked a total of 50 hours. His gross wages year to date, prior to his March 8 paycheck, are $11,980. Social Security Tax is 6.2% on a maximum of $132,900 of gross wages per year, Medicare Tax is 1.45%, federal unemployment tax is 0.6% and state unemployment tax is 4.2%, both on a maximum of $7,000 of gross wages per year. What is the employer's payroll tax expense for Roy for the week ended March 8, 20X1?

358.67

Sabrina Duncan had gross earnings for the pay period ending 10/15/20X1 of $5,785. Her total gross earnings as of 9/30/20X1 were $126,600. If Social Security taxes are 6.2% on a maximum earnings threshold of $132,900 per year, Sabrina's Social Security withheld from her 10/15/20X1 paycheck would be:

3750

Stan Still Stationery Store's employees are paid every Friday for a five day work week and are paid a total of $1,250 per day. If December 31, 20X1, is on a Wednesday, the amount of the adjusting entry for accrued wages is:

Correct answer: Wise Tools will report a $1,000 net loss for the period ending 12/31

The Income Summary account, for Wise Tools appears below. Based on the data contained in the account, determine which of the statements below is correct. Income SummaryDebitCredit12/31 beginning inventory4,00012/31 ending inventory9,00012/31 expenses51,00012/31 revenues45,000

contra expense

The Purchases Returns and Allowances account is a(n) __________ account.

debit balance and is a contra revenue account

The Sales Returns and Allowances account has a normal __________.

debit supplies expense 3300, credit supplies 3300

The Supplies account has a balance of $4,700. A year-end inventory shows $1,400 worth of supplies left at the end of the year. The correct adjusting entry is:

false

The account "allowance for doubtful accounts" is a contra-revenue account.

a debit to Uncollectible Accounts Expense and a credit to Allowance for Doubtful Accounts.

The adjusting entry for uncollectible accounts requires a

true

The balance of the Merchandise Inventory account that appears in the Trial Balance section of the worksheet represents the stock of goods on hand at the beginning of the current period.

17000

The beginning capital balance shown on a statement of owner's equity is $49,000. Net income for the period is $34,000. The owner made no additional investments during the period. The owner's capital balance at the end of the period is $62,000. The amount the owner withdrew for personal use during the period is

21000

The beginning capital balance shown on a statement of owner's equity is $49,000. Net income for the period is $34,000. The owner made no additional investments during the period. The owner's capital balance at the end of the period is $62,000. The amount the owner withdrew for personal use during the period is

$18,000.

The beginning capital balance shown on a statement of owner's equity is $54,000. Net loss for the period is $16,000 and the owner withdrew $20,000 cash from the business and made no additional investments during the period. The owner's capital balance at the end of the period is

18000

The beginning capital balance shown on a statement of owner's equity is $54,000. Net loss for the period is $16,000 and the owner withdrew $20,000 cash from the business and made no additional investments during the period. The owner's capital balance at the end of the period is

98000

The beginning capital balance shown on a statement of owner's equity is $81,000. Net income for the period is $32,000. The owner withdrew $15,000 cash from the business and made no additional investments during the period. The owner's capital balance at the end of the period is

a liability

The employer records the amount of federal income tax withheld as:

Matching

The employer's share of social security and Medicare taxes is commonly referred to as what?

Income Statement Credit and the Balance Sheet Debit columns.

The ending merchandise inventory is recorded on the worksheet in the

Interest Income

The entry to record the receipt of a check in settlement of an interest-bearing promissory note includes a debit to Cash, a credit to Notes Receivable, and a credit to ____________________.

true

The journal entry to record interest that has been earned but not yet received includes a debit to Interest Receivable and a credit to Interest Income.

true

The list price is also known as the established retail price.

false

The lookback period for determining an employer's deposit schedule is a four-year period ending on June 30 of the preceding year.

false

The maximum base for the social security tax is the same as that for the Medicare tax.

create written proof that purchases and payments are authorized.

The objective of internal control of purchases is to:

false

The objective of matching revenues and expenses to specific fiscal periods is most nearly attained when revenues and expenses are recognized in the period during which cash related to the transactions is received or paid.

merchandise inventory

Which of the following accounts is not closed at the end of the accounting period?

Disability benefits for the worker and the worker's dependents are provided by the Federal Insurance Contributions Act.

Which of the following statements is correct? All employees must be paid no more than the minimum wage rate set by the Fair Labor Standards Act. A company is required to withhold various employee taxes from amounts paid independent contractors.: Disability benefits for the worker and the worker's dependents are provided by the Federal Insurance Contributions Act. The accountant who performs the independent audit for a company is an employee of the company.

A list of cancelled checks

You would find all of the following on a bank reconciliation statement, except:

Retailer

___________ are required to collect sales tax from customers, make periodic payments to the taxing authority, and pay the taxes due when reports are filed.

61165

During the year, a firm purchased $57,070 of merchandise and paid freight charges of $12,700. If the total purchases returns and allowances were $6,545 and purchases discounts were $2,060 for the year, what is the net delivered cost of purchases?

witholding allowances claimed

Each wage-bracket table in Publication 15, Circular E contains columns that differ based on what piece of information?

Merchandise Inventory

The stock of goods on hand to sell to consumers is called __________.

a debit to Income Summary of $35,000 and a credit to Merchandise Inventory for $35,000.

The trial balance of Premier Lighting Company shows Merchandise Inventory of $35,000. Based on a count taken on December 31, merchandise inventory at the end of the year actually totaled $28,000. The adjusting entry to record the new merchandise inventory balance assuming the company uses the periodic inventory system would be:

expense

Uncollectible Accounts Expense is a(n) __________ account.

two

Under a periodic inventory system, the adjustment for merchandise inventory is made in __________ step(s).

false

Under a periodic inventory system, to remove the beginning inventory from the books, the Income Summary account is credited for the amount of the beginning inventory

false

Under a periodic inventory system, to remove the beginning inventory from the books, the Income Summary account is credited for the amount of the beginning inventory.

debit Income Summary $9,000 and credit Salary Expense $4,000; credit Rent Expense $3,000; credit Purchases $2,000

Use the following account balances from the adjusted trial balance columns of RB Auto's worksheet to answer below question. AccountDebit BalanceCredit BalanceCash20,500Merchandise Inventory1,000Accounts Payable2,800R. Holloway, Drawing500R. Holloway, Capital13,000Sales15,000Purchases2,000Purchase Returns and Allowances200Rent Expense3,000Salaries Expense4,000 Select the correct closing entry that RB Auto would make to close their expense account(s) at the end of the accounting period.Correct answer: Wise Tools will report a $1,000 net loss for the period ending 12/31Correct answer: Wise Tools will report a $1,000 net loss for the period ending 12/31

control

When an accounts payable subsidiary ledger is used, the Accounts Payable account in the general ledger becomes a(n) __________ account.

true

When an accounts payable subsidiary ledger is used, the entry to Accounts Payable requires two posting references in the general journal.

year-to-date federal income tax withholding (prior to the current period)

When determining an employee's proper amount of federal income tax withholding using the wage-bracket table method, the employer does not need which of the following pieces of information? The employer records the amount of federal income tax withheld from employees as