HRIM 335 Exam #3
Workers Compensation Insurance
A benefit plan required by federal regulations in which employers must purchase insurance to protect their employees against losses they may incur due to work caused injury or death while on the job. Usually paid by the employer
D
An employee has gross earnings of $1,000 with witholdings of 6.2% FICA-OASDI, 1.45% FICA-Medicare, $50 for federal income tax, and $10 for state income tax. Home much is net pay? A) $900 B) $781.15 C) $791.15 D) $863.50
B
Brian Temple's cumulative earnings are $107,000 and his gross pay for the week is $5,300. If the FICA rates are: OASDI 6.2% ina limit of $106,800 and Medicare is 1.45%, what are his FICA-OASDI and FICA-Medicare taxes for the week? A) $328.60; $76.85 B) $0; $76.85 C) $0; $0 D) $328.60; $0
D
Capital expenditures would include A) betterments B) additions C) extraordinary repairs D) all of these answers are correct
c
Chocolate Supreme purchased new baking equipment for $15,000 subject to terms of the 4/10, n/45/ The discount was taken. Additional costs inclide sales tax $900 and installation $300. The total cost to be added to the machinery account is: A) $15,000 B) $15,900 C)$15,600 D)$15,300
D
Company policy for internal control should include all of the following except: A) employees will be rotated B) the owner (or responsible employer) signs all checks after receiving authroization to pay from the departments concerned. C) At time of payment, all supporting invoices or documents will be stamped "paid" D) Monthly bank statements should be sent to and reconciled by the same employees who authorize payments and write checks
debit, credit
Entries to transportation, assembly, installation, etc. for new equipment would be made as a ___ to the Machinery account and as a ___ to Cash
D
FUTA taxes are paid: A) by the end of January of the following year if the amount owed is less that $500 B) by the end of the month following the end of the calendar quarter if the amount owed is more that $500 C) at the same time as the Form 941 taxes D) Both A and B are correct
B
Greetings Online disposed of a van that costs $22,000 with accumulated depreciation of $15,000. The journal entry would be: A) debit Accumulated Depreciation $15,000; credit Van $15,000 B) debit Loss Disposal of Plant Asset $7,000; debit Accumulated Depreciation $15,000; credit Van $22,000 C) debit Accumulated Depreciation $15,000; debit Depreciation Expense $7,000; credit Van $22,000 D) none of these are correct
asset, limited (ex. driveways, fences, shrubbery, paving parking lots, sprinkler systems, etc)
Land improvements is an ___ account that records improvements to land that have a(n) ____useful life
B
Mount Company purchased a machine at an invoice cost of $21,000 subject to terms of 3/10, n/30. The discount was taken. Additional costs were installation, $1200; insurance on the machine after it was in operation, $370. The total cost to be added to the machinery account is: A) $21,940 B) $21,570 C) $21,000 D) $20,740
W-4
The Employee's Withholding Allowance Certificate (___) is used to determine the amount of federal income tax withholdings for every employee
employers, employees, benefits
The Federal Unemployment Tax Act (FUTA) is paid by ___based on wages paid to ___. FUTA pays the cost of administering the federal and state programs but does not pay ___to employees
A
The Wages and Salaries Expense account would be used to record: A) gross earnings for office workers B) a debit for the amount of net pay owed to the office workers C) a credit to the amount of net pay owed to the office workers D) net earnings for the office workers
State
The ___ Unemployment Tax Act taxes pay benefits to unemployed persons
SUTA, lower, higher
The ___ tax rate motivates employers to stabilize their work force by charging a ___ tax rate to employers who rarely lay off their workers and a ___ tax rate to employers who frequently lay off their workers.
D
The account for payroll tax expense includes all of the following except: A) state unemployment taxes B) federal unemployment taxes C) FICA taxes (OASDI and Medicare) paid by the employer for the latest payroll period D) federal income taxes
B
The cost of an asset less its accumulated depreciation is called: A) Salvage value B) book value C) market value D) residual value
C
The credit recorded in the journal entry to establish the petty cash fund is to: A) Withdrawals B) Petty Cash C) Cash D) Postage Expense
A
The drawee is the: A) Person who writes/pays the checks B) the person to whom the check is payable C) the person who reconciles the account D) bank that drawer has an account with
A
The information needed to make the journal entires to record the wages and salaries expense comes from: A) the payroll register B) form W-2 C) form 941 D) the look-back period
D
The law that governs overtime earnings is called: A) Federal Insurance Contribution Act B) Federal Wage and Hour Law C) Fair Labor Standards Act D) Both B and C are correct
A
The look-back period is used to determine whether: A) A business should make its Form 941 tax deposits on a monthly or semi-weekly basis B) an employer has sent the W-2s to their employer on a timely basis C) an employer must pay unemployment taxes D) an employer will use form 940
True
True or false? Employers pay exactly the same amount of Social Security taxes (OASDI and Medicare) for each employee as the employee pays in addition to unemployment taxes that the employee does not pay.
B
Vanessa's Gymnastics' cash register tapes do not agree with cash receipts. The facts are: total cash register tapes $400; total coins and currency $404. The summary journal entry to record the day's transactions would include a: A) $404 debit to cash and $404 credit to sales B) $400 debit to cash; $4 debit to cash short/over; $404 credit to sales C)$400 debit to cash and $400 credit to sales D)$404 debit to cash, $4 credit to cash short/over; $400 credit to sales
B
What occurs on the banking side of the bank reconciliation process? A) + deposits, - service charges, -NSF B) + deposits in transit, -outstanding checks
A
What occurs on the checkbook side of the bank reconciliation process? A) + deposits, - service charges, -NSF B) + deposits in transit, -outstanding checks
A
What would be the depreciation expense in year 1, using units-of-production, for a molding machine that cost $18,000, had a useful life of 3 years, no residual value, and an estimated total machine hours of 36,000? Production in year 1 was 10,000 hours A) $5,000 B) $4,000 C) $2,667 D) $6,000
B
What would be the depreciation expense using double-declining-balance to compute the expense for year 2 of a machine costing $15,000 when residual value is $5,000 and useful life is 5 years? A) $6,000 B) $3,600 C) $3,000 D) $5,000
B
When a business starts, what must it obtain that identifies itself to the government? A) A look-back period B) employer identification number C) state employer number D) federal unemployment number
revenue, expense, net
When an expenditure is treated as a ___ expenditure, it is recorded on the income statement as an ___and this reduces __ income in the period in which it occurred
debit, credit
When recording the payment of payroll in the general journal, you __ wages and salaries payable and ___ payroll cash
credit, debit
When recording the payroll tax expense you ___ FICA, SUTA, and FUTA and these taxes are added together and recorded as a ___ to the payroll tax expense account
Gross earnings
___ ____ are calculated by adding the regular earnings for an employee for the period to any overtime earnings the employee has earned for the period
intangible
___ assets are long-lived assets that have no physical existence but do represent legal rights and monetary relationships that benefit a company. Ex) patents, copyrights, franchises, and good-will
betterments, extend
___ do not ___ the life of the asset: the cost of a betterment is debited to the asset account
revenue, expenses (ex. changing oil, replacing window panes, changing tires, repainting a car, adding a sun roof, etc)
___ expenditures are payments made for ordinary maintenance of an asset or unnecessary or unreasonable situations. These occur on a regular basis and are recorded as ___
extraordinary, do
___ repairs __ extend the life of assets. The result of the extraordinary repair is to cancel some of the accumulated depreciation
intangible
____ assets have no physical substance, such as patents or franchises. They are also considered long term assets
Incidental
____ costs of land including surveying, commissions to attorneys and real estate brokers, title searchers, and grading, draining, and clearing the property
units-of-production method, passage of time
cost-residual value/estimated units of production This method assumes that ___ __ ___ does not determine the amount of depreciation taken
straight-line method
cost-residual value/useful life in years
OASDI
old-age, survivor's, and disability insurance
debit, credit
situation 1: to record no gain or loss on the disposal of an asset that has been fully depreciated, you ___the accumulated depreciation and ___the asset
debit, debit, credit
situation 2: to record a loss on the disposal of a partially depreciated asset, you ___ the loss for the remaining book value, ___accumulated depreciation, and ___the truck
debit, debit, debit, credit
situation 5: to record a loss on the sale of an asset you ___ cash for the amount received, ___ accumulated depreciation, ___ loss on sale of plant asset, and ___ the original cost of the truck.
cost (ex. all reasonable and necessary payments for labor, insurance, building permits, architect's fees, legal fees, and interest paid for financing the time of construction, etc.)
the ___ of buying a building includes the purchase price and all the cost of repairs and other expenses to get the building ready for use.
B
A gain on the sale of an asset occurs when: A) the cash received is less than the book value of the asset B) the cash received is greater than the book value of the asset C) the book value is equal to the cost of the asset, and the cash received is less than the cost of the asset D) None of these answers is correct
amortization
the process of allocating the cost of an intangible asset over all the periods it provides benefits is called ___
Fair Labor Standards Act (AKA Federal Wage and Hour Law)
this law states that an hourly employee must be paid at least one and a half times his or her regular pay rate for any hours worked over 40 in one workweek
net pay
Gross earnings - deductions = __ ___
separated
If a building and land are purchased for one lump-sum payment, the cost must be ___ because land will not depreciate but buildings will.
C
Josh Kindel purchased equipment for $60,000 on January 1st. Its residual value is $4,000 with a useful life of 8 years. The amount of depreciation expense in the first year under the double-declining-balance method is: A)$7,000 B) $14,000 C) $15,000 D) $7,500
unlimited
Land has ____ useful life
depreciation
Land improvements are subject to ___
cost, assembly
The __ of a machine includes freight, ___ , and all other costs that are needed to get the machine up and ready to run.
B
The debit recorded in the journal entry to establish the petty cash fund is to: A) Withdrawals B) Petty Cash C) Cash D) Postage Expense
true
The employer withholds FIT, SIT, FICA OASDI,and FICA Medicare taxes from the employee's paychecks
other expense
The loss on disposal account is categorized as ___ ___ on the income statement
bank reconciliation
The process of reconciling the checkbook balance with the bank balance given on the bank statement.
True
True or False? All wages earned are subject to the Medicare Tax; i.e. there is no price ceiling
True
True or False? The petty cash fund is used to pay small day-to-day expenses
B
Wages and salaries payable would be used to record: A) the paid portion of the earnings B) net earnings of the employees not paid C) cumulative earnings of the employees D) gross earnings of the employees
B
Which taxes are considered 941 taxes? A) FICA, FITA, and SUTA B) FICA and FIT C) FICA and SIT D) None of these are correct
book value
__ ___ equals cost of asset less accumulated depreciation
intangible, cost
___ assets are recorded as ___ on the balance sheet and usually have no contra-assets
operating
amortization expense is an ___ expense on the income statement
debit, debit, credit, credit
situation 4: to record a gain on the sale of an asset you ___ cash for the amount received, ___ accumulated depreciation, ___ the origional cost of the truck, and ___ gain on sale of plant asset
cash
the asset that is most easily stolen, lost
Double declining-balance method/ accelerated depreciation method
((100%/useful life) x 2) x book value of the asset at the beginning of the year This is an accelerated method in which a larger depreciation expense is taken in earlier years and smaller amounts in later years