Accounting 101-20 Test 2 Chapters 5-8

True

A banking day is any day that a bank is open to the general public for business

True

A signature card verifies authenticity of the signature on all checks written by the business

False

After posting adjusting entries, the temporary accounts will be set back to zero

Prepaid Insurance

After posting the closing entries, which of the following accounts is most likely not to have a zero balance?

False

All states use the same percent for the state tax rate

True

Businesses will make their payroll tax deposits based on payroll taxes collected

$622.50

Calculate an employee''s total earnings if the company pays time-and-a-half when Jill Smith works 41 hours at $15 per hour.

Canceled Checks

Checks that have been processed by the bank and are no longer negotiable are

True

Companies can choose different pay periods for hourly workers versus salary workers

True

Deposits in transit result because of a timing difference between the bank records and checkbook records

True

Depreciation Expense is closed to Income Summary, but Accumulated Depreciation is not closed

transfers the right to deposit or transfer cash

Endorsing a check:

True

FICA-Medicare provides for medical benefits after age 65

Payroll bank account

Firms with large number of employees generally use which of the following for disbursing payroll to employees?

False

Gross pay is equal to take-home pay:

Income from service 20,400 Income summary 20,400

If Income services had a $20,400 credit balance before closing entries, which of the following would be appropriate closing entry to close revenue?

$200

If an employee has $200 withheld from their check for FICA - Social Security, what is the amount that the employer would need to pay

False

If the ending balance in the Cash Short/Over account is a credit, it indicates that cash shortages have exceeded cash overages for the period

Payments are made by cash, duties of employees will be divided, and all cash receipts will be deposited into the bank the same day they arrive.

Internal control over a company's assets should include the following policy:

Gross pay less deductions

Net pay equals:

True

Premiums for worker's compensation insurance maybe adjusted based on actual payroll amounts at the end of the year

Asset

Prepaid Worker's Compensation insurance is what type of an account?

True

Revenues and expenses are closed to the Income Summary account

False

SUTA tax payable increases on the debit side of the account.

DR Cash Short Over account; Expense

The Cash Short and and Over Account covers both shortages and overages that occur in a business. What is the correct entry to record a shortage in the Cash Short and Over account? Where will the account appear on the income statement?

FICA

The Federal Insurance Contributions Act is better known as:

Employer

The Federal Unemployment Tax (FUTA) is paid by the

True

The Petty Cash account is used to pay for small items such as postage stamps and supplies

Asset

The Petty Cash fund is a(n)

True

The Withdrawals account is closed to the owner's capital account

Worker's Compensation Insurance Expense DR; Prepaid Insurance CR

The adjusting entry for expired workers' compensation premium is

True

The drawer writes the check

False

The employer pays the same amount as the employee for Federal Unemployment taxes

Debit to Change Fund

The entry to establish the change fund includes which of the following?

State Unemployment Tax Payable DR; Cash CR

The entry to record the payment of state unemployment tax is

the State Income Reporting Form

The form also know as the wage and tax statement is

True

The goal of closing is to clear all temporary accounts and update Capital

Cash is CR

The payment of employee's state income tax results in which of the following?

False

The payroll tax expense is not recorded at the same time the payroll is recorded

Payee

The person or company to whom a check is payable is called the

True

The two parts of the FICA are Medicare and Social Security

$49.60

Tracey Thrasher earned $800 for the week. If her cumulative earnings are $27,000 prior to this pay period, how much FICA-Social Security must her employer withhold from her earnings? FICA tax rates are Social Security 6.2% on a limit of $118,500.

the employee is paid time and a half.

Under the Fair Labor Standards Act, for any hours that an employee works over 40 during a work week:

Expenses are recorded when they are paid

Under the cash basis of accounting, which of the following statements is true?

Equal to gross pay

Wages and Salaries Expense is

Accounts Receivable $250 DR; Cash $250 CR

What is the journal entry to record NSF check from J. Smith for $250, that is returned with the bank statement?

Prepare a post-closing Trial balance

What is the third step in the accounting cycle?

liability

What type of an account is wages and salaries Payable?

Employee Identification Number

When a business starts, what must it obtain that identifies itself to the government?

Captial would increase

When closing the Income Summary account when there is a net income

Quarterly

When is Form 941 submitted?

Each payday

When is the payroll resister is updated?

Credit to cash

When the Petty Cash account is replenished at the end of the month, the journal entry includes which of the following?

Income Summary will be debited.

When the expenses are closed

R. McDonald, Capital

Which account would appear on the post closing trial balance?

Service Revenue

Which account would be closed during the closing process?

Endorsements

Which of the following does not affect the bank statement?

Canceled checks

Which of the following does not explain the difference between the bank statement balance and the customer's cash balance?

2.5 hours of overtime

Which of the following is not a deduction from total earnings?

Having only one person responsible for the payroll function, due to confidentiality concers

Which of the following is not an internal control for preventing or detecting payroll fraud?

Federal Income Tax

Which of the following is not considered a payroll tax expense?

Make weekly deposits

Which of the following is not example of an internal control system?

Wage-bracket taxtable

Which of the following is not included in the payroll register?

Salesperson

Which of the following is not usually considered an independent contractor?

Analyze transactions, journalize, post, adjust, prepare financial statements, close.

Which of the following sequence of actions describes the proper order in the accounting cycle?

Federal Unemployment (FUTU)

Which of the following taxes are not withheld from an employee?

Owners Capital

Which of the following would appear on the post-closing trial balance

Job risk

Worker's compensation insurance premiums are based on which of the following?

Interim Statements

are prepared during the fiscal year for periods of less than 12 months