accounting chapter 7

Pataasin ang iyong marka sa homework at exams ngayon gamit ang Quizwiz!

To reconcile the bank statement which of the following amounts would be subtracted from the checkbook balance

Service charge

A self employment taxes it contribution to the

Social Security and Medicare programs

Outstanding checks are checks issued that have not yet been presented to the bank for payment.

True

Payments from the petty cash fund should not be made without obtaining some sort of receipt in return.

True

Person earning self employment income of $400 or more must pay self employment tax

True

Plastic cards or badges and coated with basic employee data are now being used in computer based timekeeping systems

True

Self-employed individuals can be viewed as both employer and employee

True

Self-employment taxes double to Social Security and Medicare rates

True

Deposits in transit

On a bank reconciliation deposits that were not entered by the bank before the bank statement was repaired are known as

Employees income tax payable is a liability account that is credited for the FICA tax withheld from an employee's earnings

False

If the cash short and over account has a credit balance at the end of the fiscal year, the balance represents an expense or loss.

False

If the cash short and over account has a debit balance at the end of the fiscal year, the balance represents a revenue.

False

If the depositor's book balance is not the same as the bank's book balance, an error has occurred.

False

In reconciling the bank statement, the outstanding checks are added to the balance shown on the bank statement.

False

Journalizing payroll taxes for the employer will require several debit entry is but only one credit entry

False

On a deposit ticket, checks should be listed in numerical order.

False

Payroll expert answers represent a relatively small part of the total exploiters of most companies

False

Posting must be done from the petty cash payments record.

False

Self-employment income is the gross income of a trade or business run by an individual

False

Self-employment tax is a contribution to the unemployment compensation program

False

The Medicare tax rate is subject to a maximum amount

False

The Social Security, Medicare, FUTA and SUTA tax accounts normally have debit balances.

False

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

False

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

False

Compensation for manager or administrative services usually has expressed in by weekly monthly or annual terms in is called wages

False

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

An independent contractor performs a service for a fee and works under the control and direction of the company paying for the service

False

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

$12.98

A petty cash fund of $200 has $17 in cash, $180 in petty cash vouchers. The proper journal entry to replenish the fund would include a credit to Cash for

$183

The payroll register for the week ended February 14 for lecture he homes construction company indicates gross or -$4000 and total deductions of $1200. The entry for the wages and salaries expense and then February 14 would be a

$4000 debit

The petty cash payments record indicates classified expenditures as follows: Automobile Expense $20; Supplies Expense $12; Postage Expense $6; and Miscellaneous Expense $5. The journal entry to replish the petty cash fund would include a credit to Cash for

$43

A petty cash fund of $200 has $17 in cash, $180 in petty cash vouchers, and $3 in miscellaneous receipts not included with the petty cash vouchers. The proper journal entry to replenish the fund would include a credit to Cash for a.$183. b.$3. c.$17. d.$180.

A

If, in the effort to prove cash, a shortage is found, the amount is treated as a(n) a.expense. b.petty cash transaction. c.cash receipts transaction. d.revenue earned transaction.

A

In reconciling a bank statement, the bank statement balance is $1,000 and the balance per books is $1,205. A bank service charge is $5; a deposit in transit totals $500; and outstanding checks total $300. The journal entry for a bank service charge would include a.debiting Miscellaneous Expense and crediting Cash. b.debiting Accounts Payable and crediting Cash. c.debiting Cash and crediting Owner's Capital. d.debiting Cash and crediting Miscellaneous Expense.

A

On a bank reconciliation, deposits that were not entered by the bank before the bank statement was prepared are known as a.deposits in transit. b.NSF deposits. c.unrecorded deposits. d.restrictive deposits.

A

The check written to establish the petty cash fund is entered in the journal by a.debiting Petty Cash and crediting Cash. b.debiting Owner's Capital and crediting Petty Cash. c.debiting Petty Cash and crediting Owner's Capital. d.debiting Cash and crediting Petty Cash.

A

The petty cash payments record indicates classified expenditures as follows: Automobile Expense, $20; Supplies Expense, $12; Postage Expense, $6; and Miscellaneous Expense, $5. The journal entry to replenish the petty cash fund would include a credit to Cash for a.$43. b.$11. c.$5. d.$38.

A

To reconcile the bank statement, which of the following amounts would be subtracted from the checkbook balance? a.service charge b.amounts collected by the bank for the depositor's account c.outstanding checks d.deposits in transit

A

To use an ATM machine, the depositor must have a a.PIN number. b.BIN number. c.Bank number. d.TIN number.

A

Any federal reserve bank or other authorize commercial bank may issue and employer identification number (EIN)

False

Each check should be identified by its

ABA number.

Cash receipts of $719 and a cash account of a hot $715 would indicate a cash overage

False

A check involves three parties. The bank in which the drawer has money on deposit is called the a.payee. b.drawee. c.drawer. d.endorser.

B

A check involves three parties. The person directed to receive the money is called the a.endorser. b.payee. c.drawee. d.drawer.

B

A petty cash fund of $200 has $27 in cash, $170 in petty cash vouchers, and $3 in miscellaneous receipts not included with the petty cash vouchers. The debit to the Cash Short and Over would be a.$170. b.$0. c.$173. d.$27.

B

A special multi-column record that supplements the regular accounting records and from which no posting is done is called a a.journal. b.petty cash payment record. c.ledger. d.bank reconciliation form.

B

Cash Sales from the cash register tapes totaled $882. There is a change fund of $100. The cash count indicates that $984 is in the cash drawer. What journal entry would be required? a.debit Miscellaneous Expense for $2; credit Cash Short and Over for $2 b.debit Cash for $884; credit Revenues for $882, and Cash Short and Over for $2 c.debit Cash Short and Over for $2; credit Miscellaneous Expense $2 d.debit Cash for $982, Cash Short and Over for $2; credit Revenues for $984

B

If the person who is named as payee on a check transfers the right to receive the money by signing his/her name on the back of the check, the signature is called a a.dishonored endorsement. b.blank endorsement. c.restrictive endorsement. d.regular endorsement.

B

On a bank reconciliation, checks issued during the period that were not presented to the bank for payment before the bank statement was prepared are known as a.dishonored checks. b.outstanding checks. c.deposits in transit. d.NSF checks.

B

The bank statement for a checking account normally shows the a.checks written but not yet cashed. b.amount of deposits and other credits added during the period. c.amounts of deposits to be made. d.amounts to be collected by the bank for the depositor's account.

B

The process of bringing the book and the bank balance into agreement is called a.preparing a statement of payment. b.reconciling the bank statement. c.preparing a statement of disbursements. d.proving the cash.

B

To complete transactions with the bank, electronic funds transfer (EFT) systems use a.drafts or money orders. b.a computer. c.checks. d.currency.

B

To reconcile the bank statement, which of the following amounts would be subtracted from the bank statement balance? a.amounts collected by the bank for the depositor's account b.outstanding checks c.service charge d.deposits in transit

B

Cash receipts of $719 and a cash count of $715 would indicate a cash overage.

False

If the person who is named as payee on the check transfers the right to receive the money by signing his/her name on the back of the check the signature is called a

Blank endorsement

A debit to Accounts Receivable for $50 and a credit to Cash for $50 would be an accurate journal entry to record a.ATM deposits. b.petty cash. c.not sufficient funds (NSF) checks. d.electronic funds transfers (EFTs).

C

A journal entry that would result in a deduction from the cash balance is required for which of the following bank reconciliation items? a.An error where too much was deducted for a check b.Interest earned c.An unrecorded ATM withdrawal d.An unrecorded ATM deposit

C

A special form of receipt showing the name of the payee, the purpose of the payment, and the account to be charged for each petty cash payment is known as a a.petty cash check. b.petty cash document. c.petty cash voucher. d.petty cash register.

C

According to the monthly bank statement, bank service charges were deducted by the bank from the business checking account. However, $25 must be deducted from the checkbook balance and which of the following journal entries must be recorded? a.Debit Bank Service Fees for $25 and credit Miscellaneous Expense for $25 b.Debit Cash for $25 and credit Miscellaneous Expense for $25 c.Debit Miscellaneous Expense for $25 and credit Cash for $25 d.Debit Cash for $25 and credit Bank Service Fees for $25

C

On September 30, the register tapes for Colonial Gourmet Shop showed cash receipts of $2,175 and a change fund of $200 was maintained. However, $2,373 was in the register drawer. Is this cash register count indicative of cash short or over, and what does that represent? a.This cash register count shows a sales error of $198, resulting in the appearance of a shortage. A debit balance in the cash short and over account requires an adjustment. b.This cash register count shows an overage of $2. A credit balance in the cash short and over account (a net overage) is treated as an expense. c.This cash register count shows a shortage of $2. A debit balance in the cash short and over account (a net shortage) is treated as an expense. d.This cash register count shows an excess cash balance of $198. A credit balance in the cash short and over account (a net overage) is treated as revenue.

C

The form prepared for every payment from the petty cash fund is called a a.voucher form. b.petty cash check stub. c.petty cash voucher. d.payment stub.

C

The petty cash payments record indicates classified expenditures as follows: Automobile Expense, $20; Supplies Expense, $12; Postage Expense, $6; and Miscellaneous Expense, $5. The transaction would include a.debiting Cash. b.crediting Supplies Expense. c.debiting Automobile Expense. d.crediting Accounts Payable.

C

The register tapes for March 20 showed cash receipts of $872, and a change fund of $200 was maintained, but only $1,070 in cash was in the register drawer. Which of the following journal entries would be made for Cash, Service Fees, and Cash Short and Over on March 20? a.Debit Service Fees for $872, credit Cash for $870, and credit Cash Short and Over for $2 b.Debit Cash for $870, debit Change Fund for $200, and credit Service Fees for $1,070 c.Debit Cash for $870, debit Cash Short and Over for $2, and credit Service Fees for $872 d.Debit Cash Short and Over for $872, debit Change Fund for $200, and credit Service Fees for $1,072

C

The two times an entry would be made that affects the change fund would be when a.the net shortage or overage is determined and when establishing a change fund. b.establishing a change fund and when cash is deposited at the end of the day. c.establishing a change fund and if the amount of the fund is being changed. d.the amount of the fund is being changed and when cash is deposited at the end of the day.

C

To reconcile the bank statement, which of the following amounts would be subtracted from the checkbook balance? a.amounts collected by the bank for the depositor's account b.deposits in transit c.service charge d.outstanding checks

C

To sign the back of a check with the name of the company and "Pay to any bank" is an example of a a.signature card. b.blank endorsement. c.restrictive endorsement. d.canceled check.

C

Which of the following is an example of a journal entry to record the replenishment of the petty cash fund? a.Debit Cash for $44.30 and credit Petty Cash Replenishment for $44.30 b.Debit Postage Expense for $7.80, debit Vehicle Expense for $36.50, and credit Petty Cash for $44.30 c.Debit Postage Expense for $7.80, debit Vehicle Expense for $36.50, and credit Cash for $44.30 d.Debit Petty Cash for $44.30, credit Postage Expense for $7.80, and credit Vehicle Expense for $36.50

C

Which of the following is issued by a bank once a month to each depositor and shows items such as the balances at the beginning and ending of the period? a.Internal control b.Check stub c.Bank statement d.Deposit ticket

C

Which of the following is known as stamping or writing the payee's (the party to whom the check is payable) name on the back of a check to transfer ownership? a.A bank reconciliation b.A signature card c.An endorsement d.A deposit ticket

C

Which of the following is not a step in preparing a bank reconciliation? a.Identify additional reconciling items. b.Identify outstanding checks and any related errors. c.Identify ending balance of previous statement. d.Identify deposits in transit and any related errors.

C

Who should be able to access the petty cash fund at any given time? a.Accounting personnel b.All employees c.The custodian d.Only the owner

C

The rules by which employers must deposit Social Security and Medicare taxes can be found in the

Circular E - employers tax guide

A check involves three parties. The person who orders the bank to pay a certain amount of money is called the a.endorser. b.payee. c.drawee. d.drawer.

D

Check No. 450, a payment of $54 for the telephone bill, was incorrectly entered on the check stub as $45. Which of the following adjustments needs to be made? a.decrease the bank statement balance b.increase the bank statement balance c.increase the book balance d.decrease the book balance

D

Each check should be identified by its a.AAB number. b.CPA number. c.MBA number. d.ABA number.

D

In reconciling a bank statement, the bank statement balance is $1,000 and the balance per books is $1,205. A bank service charge is $15; a deposit in transit totals $500, and outstanding checks total $300. The adjusted book balance is a.$1,205. b.$1,490. c.$1,505. d.$1,190.

D

To reconcile the bank statement, which of the following amounts would be added to the bank statement balance? a.amounts collected by the bank for the depositor's account b.outstanding checks c.service charge d.deposits in transit

D

Whenever the bank mails a credit memo to the depositor indicating the amount of interest credited to the account, the transaction that would be entered in the accounting records of the depositor would include a.debiting Cash and crediting Interest Expense. b.debiting Interest Earned and crediting Cash. c.debiting Interest Expense and crediting Cash. d.debiting Cash and crediting Interest Earned.

D

To journalize the payment of Medicare taxes to the IRS the correct entry would be

Debit Medicare tax payable and credit cash

Cash usually means only currency and coins. T/F

False

On a bank reconciliation, deposits that were not entered by the bank before the bank statement was prepared are known as

Deposits in transit

To reconcile the bank statement which of the following amounts would be added to the bank statement balance?

Deposits in transit

A check involves three parties. The bank in which the drawer has money on deposit is called the

Drawee

A separate record of each employees earnings is called

Employee earnings record

The account that should be credited for the total income tax withheld from an employees earnings is

Employee income tax payable

Form W-4 is a(n)

Employee's Withholding Allowance Certificate

The federal unemployment taxes levied on

Employers and is not deducted from the employees earnings

A check is a document ordering the depositor to pay cash from the bank account

False

A check is a document ordering the depositor to pay cash from the bank's account.

False

A deposit or is not responsible or liable to the bank for items deposited that are not honored and presented for payment

False

A depositor is not responsible or liable to the bank for items deposited that are not honored when presented for payment. T/F

False

A restrictive endorsement makes a check payable to any bearer.

False

A restrictive endorsement means that the check is payable to any bearer

False

A restrictive endorsement means that the check is payable to any bearer.

False

A restrictive endorsement means that the check is payable to any bearer. T/F

False

A special ledger account entitled "Change Fund" is used to keep track of day-to-day shortages and overages of cash

False

A special ledger account entitled "Change Fund" is used to keep track of day-to-day shortages and overages of cash.

False

The bank in which the depositor has money on deposit is known as the drawer

False

The bank in which the depositor has money on deposit is known as the drawer.

False

The depositor who orders the bank to pay a certain amount of money is known as the drawee.

False

The difference between the balance in the cash account on the depositor's books and the bank's books is usually due to errors.

False

The due date for payroll taxes is the last day of each fiscal quarter: March 31, June 30, September 30 and December 31.

False

The fair labor standards act requires employers to pay double the regular hourly rate for the time worked on Saturday

False

The payroll register as a summary of the annual earnings of each employee

False

The payroll register is a summary of the annual earning of each employee

False

The petty cash fund should be replenished only at the end of each accounting period so that the accounts are brought up-to-date.

False

The petty cash payments record is a special journal that takes the place of entering these transactions in the two-column journal.

False

Under federal law employers are required to withhold a percentage of the employees wages for pensions

False

When a check is written to replenish the petty cash fund, it is entered in the journal by debiting the proper accounts indicated in the Distributions columns of the petty cash record and by crediting Cash Over and Short.

False

When it is necessary to replenish the petty cash fund, the petty cashier prepares a statement of payments.

False

Check No. 450, a payment of $45 for the telephone bill, was incorrectly entered on the check stub as $54. Which of the following adjustments needs to be made?

Increase the book balance.

And employer identification number (EIN) is obtained by the employer from the

Internal Revenue Service (IRS)

The account that is credited for the Medicare tax withheld from employees earnings in the Medicare tax imposed on the employer is

Medicare tax payable

On a bank reconciliation, checks issues during the period that were not presented to the bank for payment before the bank statement was prepared are known as

Outstanding checks.

To use an ATM machine the depositor must have a

PIN number

To journalize the employer's payroll taxes, we need to credit all of the following accounts EXCEPT

Payroll Taxes Expense.

A multi column form used to assemble compute and summarize data for all employees at the end of the payroll period Is

Payroll register

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

Payroll register, Employee earning record, and payroll check.

A special form a receipt showing the name of the payee the purpose of the payment and they count to be charge for each petty cash payment is known as a

Petty cash voucher

The process of bringing the book and bank balance into agreement is called

Reconciling the bank statement

To sign the back of a check with the name of the company and pay to any bank is an example of a

Restrictive endorsement

Which tax program often has a merit rating system to encourage employers to provide regular employment for workers

SUTA

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

Salary

The employer pays _______ to the internal revenue service (IRS)

The employer Social Security and Medicare taxes

Once an entry is made to establish a change fund, no other entries are made to this account.

True

A cash shortage is entered as a debit to Cash Short and Over and a credit to Cash.

True

A cash shortage is entered as a debit to cash short and over and a credit to cash

True

A check deposited that is not paid because the drawer did not have sufficient funds is called an NSF check.

True

A debit journal entry to the cash short and over account is used to record a cash shortage.

True

A depositor may endorse checks with a rubber stamp

True

A depositor may endorse checks with a rubber stamp.

True

A receipt called a petty cash voucher should be prepared for every payment from the petty cash fund

True

A receipt called a petty cash voucher should be prepared for every payment from the petty cash fund.

True

A special form of receipt showing the name of the payee, the purpose of the payment, and the account to be charged for each petty cash payment is known as a petty cash voucher.

True

And electronic payroll system is one in which data is processed using computers equipped with payroll software

True

And employees total earnings is referred to as gross pay

True

Both manual and electronic payroll systems require the same payroll input and output

True

Businesses commonly use cash registers with tapes that accumulate a record of the day's cash receipts.

True

Employer's payroll taxes include FICA, FUTA and SUTA taxes

True

Employers payroll taxes include FICA FUTA and SUTA taxes

True

Employers primarily use the wage bracket method to determine the amount of tax to be withheld from an employees pay

True

Every person authorized to sign checks for a business must complete and sign a signature card for the bank

True

Every person authorized to sign checks for a business must complete and sign a signature card for the bank.

True

In general the larger the amount of Social Security and Medicare taxes due from an employer the more frequently payments must be made

True

In most states the state unemployment taxes levied only on employers

True

It is good business policy that all cash and cash items received be deposited daily in a bank.

True

Most employers have to pay FICA and FUTA taxes

True

On any given day it is unlikely that the balance in the cash account on the depositors journal ledger or books will be the same as the bank balance

True

On any given day, it is unlikely that the balance in the cash account on the depositor's general ledger (or books) will be the same as the bank balance. T/F

True

Since there is no maximum earnings on the Medicare component of the Social Security tax the Medicare tax rate of 1.45% is applied to total earnings

True

Social Security Medicare FUTA and SUTA taxes have separate liability accounts

True

The EFTPS is an electronic funds transfer system for making federal tax deposits

True

The check written to establish the petty cash fund is recorded in the journal by crediting Cash and debiting Petty Cash.

True

The due date for payroll taxes it's not the same date for all employers

True

The employer FICA taxes levied on employers at the same rate and on the same earning bases as the employee FICA tax

True

The federal insurance contributions actual cards and flyers to withhold FICA taxes from employees earnings

True

The key documents and forms required in opening and using a checking account are the signature card, deposit tickets, checks, and bank statements.

True

The length of pay period affects the amount to be withheld from an employee's gross pay each pay period

True

The person directed to receive the money indicated by a check is known as the payee.

True

The person directed to receive the money indicated by check it soon as the payee

True

The term "cash" has several different meanings. T/F

True

The term cash has several different meanings

True

To a business, cash includes currency, coins, checks, money in the checking accounts, money orders, and bank cashier's checks.

True

To establish a change fund, Cash should be credited and Change Fund should be debited.

True

When a check is written to replenish the petty cash fund, it is entered in the journal by debiting the proper accounts indicated in the Distributions columns of the petty cash record and by crediting Cash.

True

Worker's Compensation provides insurance for employees who suffer a job related illness or injury

True

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

debit Social security Tax Payable and credit Cash.

Federal income tax that is withheld each pay period from the employee's earning is NOT based on the

number of vacation days


Kaugnay na mga set ng pag-aaral

Plant Responses to the Environment Test 2

View Set

El Burlador de Sevilla y convidado de piedra

View Set

Chapter 4-Life Policy Provisions and Options

View Set

EMT Chapter 18 Gastrointestinal Emergencies

View Set