Introduction to Accounting

A customer has been granted the following credit terms 3/15, n/40. How much is the discount for paying early?

3%

John bought goods for $ 390 on credit. John returned $ 30 worth of goods. Terms of the sale were 4/10, n/30. If John pays the amount owed within the discount​ period, what is the amount they should​ pay? (Round intermediary and final calculations to the nearest whole​ dollar.)

346 390-30=360 360x4%=14.4 360-14.4=345.6=346

The beginning capital balance is $4,000; there are no additional investments or withdrawals by the owner during the accounting period. The period's revenue is $600 and expenses total $550. What is the ending capital balance (after closing entries)?

4,050 $4,050 is the ending capital balance (after closing entries). $600-$550 = $50; $4,000 + $50 = $4,050

For the second quarter, the amount of federal income tax withheld for a period is $27,000 and FICA withheld is $7,500. Which of the following is the correct total deposit amount for payroll taxes for the quarter

42000 27000+7500(2)

On April 1, XYZ Inc. purchased $700 of merchandise on account from ABC Ltd., terms 2/10, n/30. The goods were shipped F.O.B. destination. The freight charge was $50. The amount to be recorded as a debit to inventory

700

On March 4, John purchased $700 of merchandise on account from Larsen's Accessories, terms 2/10, n/30. The goods were shipped F.O.B. destination. The freight charge was $50. The amount to be recorded in the Accounts Payable Subsidiary ledger is:

700

Home Restoration reports net sales of $ 60000. If sales returns and allowances are $ 18000 and sales discounts are $ 2000. what are gross​ sales?

80000 60000+18000+2000=80000

​Carl's earnings during the month of March were $ 6300. His earnings for the year prior to March were $ 5600. Carl's employer is subject to federal unemployment taxes of​ 0.8% and state unemployment taxes of​ 5.4% on the first​ $7,000. The​ employer's unemployment payroll tax expense for Carl in the month of March​ is: (Round any intermediate calculations to the nearest​ cent, and your final answer to the nearest whole​ dollar.)

87 5.4+0.8=6.2% 7000-5600=1400 1400x6.2%=86.8=87

An accountant is reviewing the work of a bookkeeper who just completed a bank reconciliation and sees that $15 was deducted from the balance per the books. Which of the following would explain that? Answer A $15 check that cleared since the last time a bank reconciliation was performed $15 fee collected by the bank and added to the account and shown on the bank statement A $15 interest amount credited to the checking account A $15 bank service charge disclosed in the bank statement

A $15 bank service charge disclosed in the bank statement

Which of the following best describes the accounts payable subsidiary ledger?

A book or file that contains, in alphabetical order, the name of the creditor and amount owed from purchases on account

A particular transation resulted in an expense being debited and a liability credited. Which of the following choices would have that effect?

A business received the utilities bill but did not pay it immediately Accounts payable (liability) is used as the bill wasn't paid immediately. Accounts Payable is increasing. Liabilities increase with a credit. The utilities expense is increasing. Expenses increase with a debit.

Which of the following would be an explanation for a transaction where Prepaid rent is debited and cash is credited?

A company paid for rent in advance of enjoying the benefits of the lease

An accountant comes upon a posting mistake in the general ledger that resulted in assets being understated and expenses being overstated. Which of the following mistakes would have that effect?

A company purchases a truck for $30,000 cash and debits Truck Expenses instead of the Truck Asset account By debiting an expense account instead of an asset, assets would be understated and expenses would be overstated.

If advertising expense is debited and accounts payable is credited, which of the following explanations of the transaction would be correct?

A company ran an advertisement in a newspaper and will pay for it next month Advertising is an expense of doing business and is recognized in the period in which the advertising benefits the company. Since the advertising has run but won't be paid for till next month, the advertising expense is recognized now and a payable is set up because the cost of the advertisement will be paid in the future.

ABC Retailing Inc. utilizes a perpetual inventory system. The company sold $400 of women's clothing that had a cost of $200. The entry to record the sale would include:

A credit to inventory for $200

Which of the following would require that a credit to cash be made?

A customer who bought merchandise for cash returned the merchandise

New England Football Products Inc. sold 40 shoulder pads for $25 each to a credit customer. The cost per each unit of the shoulder pads is $10. The invoice included a 5% sales tax and payment terms of 2/10, n/30. In addition, 5 shoulder pads were returned prior to payment. The entry to record the return would include:

A debit to Sales Returns and Allowances for $125.00

Returned merchandise for credit on account. How will this be recorded under a perpetual inventory system?

A debit to a liability and a credit to an asset

The journal entry to record a particular transaction is debit accounts receivables and credit delivery fees earned. Which of the following would be the description of that transaction?

A delivery company billed a customer for services rendered and the customer will pay in the future When accounts receivable is debited, it is because a sale has been made or a service has been provided and the customer will pay sometime in the future. A debit to accounts receivable and a credit to fees earned means that services were rendered on a credit basis.

Which of the following best describes the standard account?

A formal account with columns for the date, an explanation, posting reference, debit and credit

What is a ledger?

A group of accounts that records data from business transactions

Which of the following best describes the trial balance?

A list of all the accounts from the ledger and their ending balances

Which of the following would be a reason for a debit memo appearing in a bank statement? Answer A nonsufficient funds check was returned to your company A deposit of checks received from customers Collection of dividend income Interest added to the account

A nonsufficient funds check was returned to your company

The accounts payable subsidiary ledger should be posted to when:

A purchase is made on credit or a payment is made to a vendor

Net pay is: Answer Equal to gross pay less FICA A payroll related expense A reduction in cash Wage and salary expense

A reduction in cash

What type of account is Payroll Tax​ Expense? A. Expense B. Asset C. Prepaid liability D. Contra-revenue

A. Expense

Form 941 is​ filed: A. quarterly. B. weekly. C. annually. D. monthly

A. quarterly.

An example of a service business would be:

Accountemps hiring agency

A company purchases computer equipment from a supplier for $10,000 and pays $3,000 cash with the remaining amount owed on account. The transaction is records with a debit to Equipment for $10,000, credit to cash for $3,000, and a credit to accounts receivable for $7,000. What is the correction that needs to be made?

Accounts receivable should be fixed by debiting the account $7,000 and properly recording accounts payable as a credit of $7,000

Which of the following would NOT appear on the income statement?.

Accumulated depreciation

An error, on the company's books, in recording a $92 deposit as $29 would be included on the bank reconciliation as a(n): Answer Subtraction of $92 from the balance per bank Addition of $63 to the balance per books Subtraction of $63 from the balance per bank Addition of $63 to the balance per bank

Addition of $63 to the balance per books

The accounting process performs which of the following functions? All of the listed answers are correct Analyzing transactions Recording transactions Summarizing results

All of the listed answers are correct

Closing entries are prepared: All of the listed answers are correct. to clear all temporary accounts to zero. to update the Capital balance. at the end of the accounting period.

All of the listed answers are correct.

The Trial Balance: All of the listed answers are correct. ensures that debits equal credits. includes all accounts with a ledger balance. includes assets, liabilities, capital, withdrawals, revenues and expenses.

All of the listed answers are correct.

why would a company use a separate payroll cash account? Answer Provides for better internal control Determine whether or not the employee has cashed their check Ease of account reconciliation All of the listed answers are correct.

All of the listed answers are correct.

A general ledger contains which of the following? All the balance sheet and income statement accounts Just the balance sheet accounts Just the income statement accounts The subsidiary ledgers

All the balance sheet and income statement accounts

The action that transfers the right to deposit or transfer a check by signing the back of the check is called: Answer A deposit An endorsement A wire A guarantee

An endorsement

Revenues were $60,000, expenses were $25,000 and withdrawals were $4,000, what would be the net change in capital as a result of closing entries?

An increase of $31,000

A sale for cash for $600 of merchandise with a 5% sales tax was debited to accounts receivable for $630 credited to sales for $630. This would result in:

An overstatement of sales and an understatement of sales tax payable

Assets are decreased when __________.

An owner withdraws money from the business

Recording business transactions involves a series of steps. These steps include analysis and creating an audit trail of information that ultimately results in correct account balances. Which of the following properly describes the sequence of steps of recording a business transaction?

Analyze, journalize, post, record the account balance, and complete the reference column in the journal.

The employer records amounts withheld from the employee's paycheck: As debits to asset accounts until paid As credits to capital accounts As debits to expense accounts As credits to liability accounts until paid

As credits to liability accounts until paid

Which of the following would be true if a company purchases $500 of supplies on credit?

Assets and liabilities would increase by $500

Form SS-4 is A. submitted to summarize the W - 2forms to the Social Security Administration. B. completed to obtain an EIN. C. submitted annually to pay unemployment taxes. D. submitted quarterly to pay FIT and FICA taxes

B. completed to obtain an EIN.

Prepaid Insurance would be found on which of the following financial statements?

Balance Sheet

Which statement would reveal the amount of money that the company is waiting to collect from customers as a result of past transactions such as sales of products and services provided?

Balance sheet Accounts receivable -is a type of asset- which is money the company is waiting to collect from its customers.

ABC Inc. has a capital account with a balance of $100,000 which would most likely be found in which column of the worksheet?

Balance sheet credit column

Jim Rogers endorsed a check by signing his name on the back of the left side of the check. This kind of endorsement is called: Answer Restrictive endorsement Federal reserve endorsement Blank endorsement Full endorsement

Blank endorsement

J. Jones showed a net income of $15,000. The entry to close the income summary account would include:

Both credit to J. Jones, capital, $15,000 and debit to income summary, $15,000 are correct

Which of the following accounts would appear on the Income Statement?

Both depreciation expense and fees earned

How is a list of deposits in transit prepared? Answer By comparing the credits in the accounts receivable account to the debits in the cash account By comparing the deposits on the bank statement to their associated deposit slips By comparing the deposits in the checkbook register to the debits in the cash account in the general ledger By comparing the deposits on the bank statement to the deposits in the checkbook register

By comparing the deposits on the bank statement to the deposits in the checkbook register

​Gail's Bakery had the following information before the pay period ending June​ 30: P. Guerrero -Pay rate: 2000 -Hours worked: Salaried -Cumulative earnings: 12000 -Department: Kitchen Federal income tax withheld: 86 T. Bennitt -Pay rate: 14/hr -Hours worked: 50 -Cumulative earnings: 6500 -Department: Office -Federal income tax withheld: 25 Assume: Each hourly employee is paid 1​ ½ times pay rate for time worked in excess of 40 hours. FICA-OASDI applied to the first​ $128,400 at a rate of​ 6.2%. FICA-Medicare applied at a rate of​ 1.45%. FUTA applied to the first​ $7,000 at a rate of​ 0.8%. SUTA applied to the first​ $7,000 at a rate of​ 5.6%. A. Credit $ 700 B. Credit $ 770 C. Debit $ 770 D. Debit $ 700

C. Debit $ 770

What is the change in capital for a period if the company had beginning capital of $8,000, revenues of $10,000, expenses of $13,000, and withdrawals of $5,000?

Capital would have decreased by $8,000 The change in capital was a decrease of $8,000. The net loss of $3,000 and the $5,000 of withdrawals resulted in capital falling by $8,000 during the period.

Which of the following would appear on the balance sheet?

Cash Assets, liabilities, and equity appear on the balance sheet. Cash is an asset and would be disclosed on the balance sheet. All other accounts listed are income statement accounts.

What is the effect on accounts if a business provided consulting services to a customer for cash?

Cash would be debited and consulting fee revenue would be credited

Which of the following would be a correct order of accounts on a trial balance?

Cash, accounts receivable, land, accounts payable, sales, wages

A company utilizes two checking accounts - one for payroll (Cash - Payroll) and one for all other cash transactions (Cash - General Checking). The gross pay for a period was $15,000 while the net pay was $11,000. Which of the following would be a correct journal entry? Answer Cash - general checking, debit $15,000; Cash - payroll, $15,000 Cash-payroll, debit $11,000; Cash - General checking, credit $11,000 Cash - general checking, debit $11,000; Cash - payroll, $11,000 Cash-payroll, debit $15,000; Cash - General checking, credit $15,000

Cash-payroll, debit $11,000; Cash - General checking, credit $11,000

A company utilizes two checking accounts - one for payroll (Cash - Payroll) and one for all other cash transactions (Cash - General Checking). The gross pay for a period was $25,000 while the net pay was $13,500. Which of the following would be a correct journal entry? Answer Cash-payroll, debit $25,000; Cash - General checking, credit $25,000 Cash - general checking, debit $25,000; Cash - payroll, $25,000 Cash-payroll, debit $13,500; Cash - General checking, credit $13,500 Cash - general checking, debit $13,500; Cash - payroll, $13,500

Cash-payroll, debit $13,500; Cash - General checking, credit $13,500

The ABA code on a check tells you the: Answer The county in which the bank is located The account number that your bank will credit when you make a deposit The federal reserve bank district and the account number into which the deposit will be credited City or state of the bank

City or state of the bank

What does this entry accomplish: debit capital; credit withdrawals?

Closing of the withdrawal account

For which of the following would owner's capital be debited?

Closing of withdrawals

The entry to record the payment of federal taxes withheld of $10,000 from employees and total FICA taxes of $6,000 ($3,000 from withholding of which $500 is for Medicare) would be Answer Debit Cash $16,000; credit FICA-OASDI Payable $5,500, FICA-Medicare Payable $500, and Federal Income Tax Payable $10,000 None of the answers are correct. Credit Cash $16,000; debit FICA-OASDI Payable $5,500, FICA-Medicare Payable $500, and $10,000 Federal Income Tax Payable Credit Cash $16,000; credit FICA-OASDI Payable $6,000, FICA-Medicare Payable $500, and Federal Income Tax Payable $10,000

Credit Cash $16,000; debit FICA-OASDI Payable $5,500, FICA-Medicare Payable $500, and $10,000 Federal Income Tax Payable

The entry to record the payment of federal taxes withheld of $12,000 from employees and total FICA taxes of $6,000 ($3,000 from withholding of which $500 is for Medicare) would be

Credit Cash $18,000; debit FICA-OASDI Payable $5,500, FICA-Medicare Payable $500, and $12,000 Federal Income Tax Payable

The document indicating to the customer that the seller is reducing the amount owed as the result of a return of goods is called:

Credit memorandum

A $200 petty cash fund has cash of $50 and valid receipts for $150. The entry to replenish the fund would include a: Answer Debit to petty cash for $200 Credit to cash for $150 Credit to cash for $200 Credit to petty cash for $50

Credit to cash for $150

If the balance of prepaid rent at the start of the month was $1,200 and rent is $400 a month, the adjustment for Prepaid Rent would be:

Credit to prepaid rent of $400

A characteristic of Sales Returns and Allowances is​ that: A. it has a credit balance. B. it tracks returns from customers. C. it is a contra-revenue account. D. B and C are correct.

D

F.O.B. shipping point​ means: A. the buyer pays for the freight. B. the seller pays for the freight. C. the title passes at time of shipment. D. Both A and C are correct.

D

The law that governs overtime earnings is​ called: A. State Wage Control Act. B. Federal Wage and Hour Law. C. Fair Labor Standards Act. D. Both B and C are correct.

D

When using a perpetual inventory​ method, what​ account(s) must be updated when a sale is​ recognized? A. Cost of Goods Sold B. Supplies C. Merchandise Inventory D. Both A and C are correct.

D

Which report would an employer review if they wanted to check how much an employee has earned to​ date? A. Payroll register B. Individual employee earnings record C. Accounts payable ledger D. A and B.

D. A and B.

A debit memo is issued as a result of a buyer returning $500 of merchandise. Which of the following would be the correct journal entry in a perpetual inventory system?

Debit Accounts Payable $500 Credit Inventory $500

Which document would trigger the following entry for a company that returned $600 of goods that it had purchased on credit?

Debit Accounts Payable $600 Credit Inventory $600

The adjusting entry to record depreciation for the company automobile would be to:

Debit Depreciation Expense, Automobile; credit Accumulated Depreciation, Automobile

he correct journal entry to record the payment of $10,000 of FUTA is to:

Debit FUTA Payable $10,000; credit Cash $10,000

A company purchases property insurance coverage for the next 12 months and pays a $24,000 premium. Cash is credited for $24,000 in the general journal. Which of the following entries would also be entered into the general journal?

Debit Prepaid Insurance $24,000

Which of the following entries would record a company paying its state unemployment tax? Answer Credit SUTA payable, credit cash Debit payroll tax expense; credit SUTA payable Debit SUTA expense; credit payroll tax payable Debit SUTA payable; credit cash

Debit SUTA payable; credit cash

The adjusting entry for accrued salaries is to:

Debit Salaries Expense; credit Salaries Payable

A manufacturer receives a $1,500 order of paper goods, pencils, file folders, and envelops from ABC OfficeWorld with terms 2/10, net 30. Which of the following journal entries would be correct, assuming the manufacturer maintains subsidiary records?

Debit Supplies Credit Accounts Payable, ABC OfficeWorld

When a company pays its vendor for fuel reviously purchased on account, what is the journal entry?

Debit accounts payable, credit cash When paying on account, a debit is made to accounts payable (liability) to lower its balance. Debits to a liability account are decreases. Since cash is used, cash (an asset) is also decrease however, assets are decreased with a credit.

Which of the following would be the accounting entry for a bank service charge that is disclosed on the bank statement? Answer Debit bank service charges; credit cash Debit cash, credit bank service charges Debit accounts payable; credit cash Debit interest expense; credit cash

Debit bank service charges; credit cash

A customer buys $3,000 on credit terms of 3/15, n/30 and pays 11 days later taking the discount. Which of the following seller entries would be correct?

Debit cash $2,910

A customer pays with a credit card upon the purchase of a $500 item. The credit card company charges a 1.5% service charge. Which of the following entries would record properly the sale? Answer Debit cash $500; credit sales $500 Debit cash $492; debit service charge $7.50; credit sales $500 Debit accounts receivable $492; credit sales $492 Debit accounts receivable $492; credit cash $492

Debit cash $492; debit service charge $7.50; credit sales $500

Upon completing form 940, the balance due is $300 and is immediately paid. What is the correct entry? Assume the liability for this amount had not been previously recorded. Answer Debit payroll tax expense; credit FUTA payable Debit wages and salary expense; credit cash Debit payroll tax expense; credit cash Debit FUTA payable; credit cash

Debit payroll tax expense; credit cash

The prepaid rent account has a balance of $10,000 representing 10 months of rent. Two months of time has transpired since the rent was prepaid. The adjusting entry to record the expired rent would be to:

Debit rent expense for $2,000; credit prepaid rent for $2,000

The return of merchandise to the supplier for credit using the perpetual inventory system would include a:

Debit to Accounts Payable and a credit to Merchandise Inventory.

The entry to record a payment on a $850 account within the 2% discount period would include a:

Debit to Accounts Payable for $850.

The journal entry to record the payment of FUTA would include and a credit to cash and a: Answer Debit to payroll tax expense Debit to accounts payable Debit to FUTA Expense Debit to FUTA Payable

Debit to FUTA Payable

he balance in the J. Jones, withdrawals account was $5,000. The entry to close the account would include a:

Debit to J. Jones, capital, $5,000

When the petty cash expense receipts plus the coin and currency in the petty cash lockbox are less than the amount that established the fund, which account entry would be made: Answer Credit to cash Debit to interest expense Debit to cash short and over Credit to cash short and over

Debit to cash short and over

Giant Sports Inc.'s $500 petty cash fund has a shortage of $16. The facts are: $180 in valid receipts for expenses; $304 in coins and currency. The journal entry to replenish the petty cash fund would include a: Answer Credit to Cash for $180 Credit to Petty Cash for $180 Debit to cash short and over for $16 Credit to Cash Short and Over for $16

Debit to cash short and over for $16

The entry establishing a $300 petty cash fund would include a: Answer Credit to petty cash for $300 Debit to petty cash for $300 Debit to miscellaneous expense for $300 Debit to cash for $300

Debit to petty cash for $300

Jim's Coffee Ltd. accrued Wages are $2,800. Which of the following is the required adjusting entry?

Debit wages expense, $2,800; credit wages payable, $2,800

If the owner of Office Coffee Services forgot to deduct a withdrawal from the balance per books, what entry would be necessary? Answer Debit cash; credit revenue Debit accounts receivable, credit cash Debit withdrawals; credit cash Debit cash; credit withdrawals

Debit withdrawals; credit cash

If the owner of business withdrawals money for personal use but in performing a bank reconciliation determines that she had neglected to record the withdrawal what accounting entry would be necessary? Answer Debit accounts receivable, credit cash Debit withdrawals; credit cash Debit cash; credit revenue Debit cash; credit withdrawals

Debit withdrawals; credit cash

A retailer that utilized a perpetual inventory system returns merchandise purchased on account. What is the impact on the accounting equation of such a transaction?

Decrease in a liability and a decrease in an asset

A business pays $500 for last month's rent on it's office. Which of the following would be the correct affect on the balance sheet equation?

Decrease in assets (cash) and decrease in owner's equity (rent expense)

A voucher would be used for: Answer Documentation to verify that a bank reconciliation has been performed and approved Documentation to support a petty cash expenditure Documentation to support a bank deposit Documentation to support the receipt of cash

Documentation to support a petty cash expenditure

A requirement that all checks written have proper authorization and ______ is an example of an internal control _______. Answer Documentation; procedure Trail; policy Purpose; procedure Purpose; trail

Documentation; procedure

The name of the bank on the face of the check is referred to as the: Answer Drawer Payor Payee Drawee

Drawee

S. Hughes is an employee of ABC Corp. At year end, the accountants for ABC prepare the W-2 for S. Hughes by referring to which of the following documents? Answer Employee earnings record W-4 Payroll register Trial balance

Employee earnings record

A company purchases $500 of equipment on account. Which of the following is the correct journal entry?

Equipment Debit $500 Accounts payable Credit $500

An owner of a landscaping business contributes three lawn mowers worth $3,000 to her business. What is the correct recording of this transaction?

Equipment $3,000 debit, capital $3,000 credit

The replenishment of the petty cash fund was recorded twice with the following expenses involved: postage $50, delivery expense $100, and cleaning expense $75. This would cause: Answer Expenses to be understated by $225 Petty cash to be unchanged Expenses to be overstated by $225 Petty cash to be underfunded by $225

Expenses to be overstated by $225

Sports "R" Us bought some new equipment for its sports line and is required to pay the freight costs. The freight terms are:

F.O.B. shipping point.

Which tax does not have a wage base​ limit?

FICA-Medicare

Which of the following would be credited if payroll tax expense is debited? Answer FUTA payable Cash Federal Income Tax withheld payable Wage and salary expense

FUTA payable

Which of the following is true about FUTA Taxes? Answer FUTA taxes are paid by the end of January of the following year if the amount owed is less than $500 FUTA taxes are paid both by the end of January of the following year if the amount owed is less than $500 AND by the end of the month following the end of the calendar quarter if the amount owed is more than $500 FUTA taxes are paid by the end of the month following the end of the calendar quarter if the amount owed is more than $500 FUTA taxes are paid at the same time as the Form 941 taxes

FUTA taxes are paid both by the end of January of the following year if the amount owed is less than $500 AND by the end of the month following the end of the calendar quarter if the amount owed is more than $500

On a bank​ reconciliation, outstanding checks are deducted from the balance per the books. True False

False

An accountant prepared an annual federal tax return and makes the following entry: debit payroll tax expense; credit FUTA payable. What form was prepared? Answer Form 1040 Form 940 Form 941 Form 1099

Form 940

The employer's annual Federal Unemployment Tax Return is: Answer Form W-6 Form 8109 Form 940 Form 941

Form 940

Which form is used to report FICA taxes for the employer and​ employee, and also federal income taxes for the​ employee?

Form 941

Which form contains information about gross earnings and is given to the employee by January 31 of the following year? Answer Form W-2 Form W-3 Form 940 Form 941

Form W-2

Which form contains information about gross earnings and is given to the employee by January​ 31?

Form W-2

Which form is sent to the Social Security Administration along with the W-2s? (It reports total wages, FICA tax withheld, etc., for the previous year.) Answer Form W-2 Form 940 Form W-3 Form SS-4

Form W-3

Which of the following accounting records is considered the "Book of Original Entry"?

General journal

he amount of FICA-OASDI and FICA-Medicare withheld from the employee's check is determined by the employee's: Answer W-4. W-2. net pay. Gross Earnings for the period and cumulative gross earnings.

Gross Earnings for the period and cumulative gross earnings

Which of the following is true of tax deposit exemptions? Answer If the deposit date falls on a Saturday, the deposit date is extended to the next business day If the deposit date falls on a Sunday, the deposit date is the previous Saturday The deposit date falls on a legal holiday, the payment is due on the following Friday If the deposit date falls on a Saturday, the deposit date is the day before (Friday)

If the deposit date falls on a Saturday, the deposit date is extended to the next business day

Which of the following is true of tax deposit exemptions? Answer If the deposit date falls on a Sunday, the deposit date is the previous Saturday If the deposit date falls on a Saturday, the deposit date is the day before (Friday) If the deposit date falls on a legal holiday, the deposit date is extended to the next business day The deposit date falls on a legal holiday, the payment is due on the following Friday

If the deposit date falls on a legal holiday, the deposit date is extended to the next business day

The financial statement that shows revenue and expenses for a period of time is the

Income Statement.

Depreciation expense and fees earned would both appear on which financial statement?

Income statement

Expenses are reported on which of the following financial statements?

Income statement

Net income (loss) is calculated on the:

Income statement

There is a proper order to preparing the financial statements. Which of the following is true regarding that order?

Income statement is prepared first

Which of the following describes the W-2? Answer It is a transmittal form of wage and tax statements. It contains information about gross earnings and is given to the employee by January 31 of the following year. It shows the FUTA and SUTA expenses of each employee. It shows the FICA and the amount of FIT withheld for the latest quarter.

It contains information about gross earnings and is given to the employee by January 31 of the following year.

A nonsufficient funds check was returned to your company. How does the bank treat this on your bank statement? Answer It is added to the bank balance. It is shown as a credit memo. It is shown as a debit memo. None of the listed answers are correct.

It is shown as a debit memo.

Which of the following explains this accounting entry: debit SUTA payable, credit cash? Answer It is the recognition of SUTA expense as a result of recording a payroll It is the payment of SUTA which was recorded as a payroll expense and a liability when the payroll was recorded It is the recognition of SUTA liability as a result of the preparation of a payroll It is the payment of SUTA that was previously withheld from employee pay

It is the payment of SUTA which was recorded as a payroll expense and a liability when the payroll was recorded

Which of the following statements is true regarding the account named notes payable?

It normally has a credit balance Notes payable is a liability account. Liabilities normally have a credit balance

Adjusting entries are:

Journal entries that are required to update specific ledger accounts to reflect correct balances at the end of an accounting period

Quarterly payroll reports are required by the IRS for FIT and FICA. Which of following would be the second quarterly report date of a calendar year? Answer July 15 March 1 June 30 April 15

June 30

An account that would be increased by a debit is:

Land ssets such as land carry a debit balance.

A credit to the capital account was posted to notes payable in error. This would cause:

Liabilities to be overstated A credit to a liability account increases the account. With this error, capital (an equity account) should have been increased.

A schedule of accounts payable is a:

List of creditors with balances owed

Quarterly payroll reports are required by the IRS for FIT and FICA. The reporting periods are quarters ending: Answer March 1, June 1, September 1, and December 1 January 15, April 15, June 15, September 15 March 31, June 30, September 30, and December 31 April 15, July 15, September 15, and December 15

March 31, June 30, September 30, and December 31

A company that uses a perpetual inventory system and sells lawn equipment purchases a garden tractor for $750 that it will place on its showroom floor for customers to consider for a purchase. Which of the following is the correct journal entry to record the purchase?

Merchandise Inventory Debit $750 Accounts payable Credit $750

A credit to a liability account would happen upon the sale of a product because:

Merchandise was sold subject to state sales tax

A retailer is a:

Merchant who buys goods from wholesalers for resale to customers

The income summary account shows debits of $19,000 and credits of $20,000. This results in a:

Net income of $1,000 The income summary account shows debits of $19,000 and credits of $20,000. This results in a net income of $1,000. $20,000-$19,000 = $1,000 (Net income)

Mandy's Nail Spa had beginning capital of $120,000, ending capital of $95,000, and owner's withdrawals of $50,000. What was Mandy's amount of net income or net loss?

Net income of $25,000

Mandy's Nail Spa had beginning capital of $130,000, ending capital of $85,000, and owner's withdrawals of $50,000. What was Mandy's amount of net income or net loss?

Net income of $5,000

Which of the following financial concepts is revealed on the Income statement?

Net income or net loss

The following amounts are also an expense to the company except: Answer FICA-OASDI SUTA payable FUTA payable Net pay

Net pay

Which of the following would be subtracted from the balance per the bank? Answer Deposits on route to the bank Interest earned on the account Bank fees deducted from the account Outstanding checks

Outstanding checks

Which of the following is an advantage of a corporation?

Owner's loss is limited to investment

Which of the following is most likely to result in an adjusting entry at the end of the period?

Payment of six months' insurance in advance

What is the worksheet used to record payroll data? Answer Employee earnings record General journal Payroll register W-4

Payroll register

An employee who is responsible for managing the petty cash completes a form that contains the following information: date, amount, who was paid, purpose, and an authorization signature. What is the name of that form? Answer Credit memo Purchase order Invoice Petty Cash Voucher

Petty Cash Voucher

The debit recorded in the journal entry to establish the petty cash fund is to: Answer Cash Withdrawals Office expense Petty cash

Petty cash

The entry to replenish the petty cash fund debited delivery expense for $50 and postage for $75 however, both expenditures were for delivery. This would cause: Answer Total operating expenses to be overstated Petty cash to be overfunded Cash to be overstated Postage expense to be overstated

Postage expense to be overstated

"PR" in the general journal and general ledger stands for:

Posting Reference.

The balance sheet would reveal the account balance of which of the following?

Prepaid expenses

The last step in the accounting cycle is:

Preparation of the post-closing trial balance

In the accounting cycle, which step comes just prior to preparing the financial statements and which steps come immediately after preparing the statements?

Preparation of the worksheet immediately precedes the preparation of the financial statements and journalizing and posting the adjusting entries comes immediately after the preparation of the financial statements

Which of the following best presents the order of tasks of the worksheet

Prepare the trial balance, adjusting entries, adjusted trial balance, financial statement columns

The order of the steps to prepare the worksheet are:

Prepare the trial balance, complete adjustments, prepare the adjusted trial balance, extend the respective totals to the Income Statement and Balance Sheet columns.

Which of the following properly describes the accounting cycle in proper sequence, beginning after an unadjusted trial balance has been prepared?

Prepare the worksheet, prepare the financial statements, journalize and post the adjustments, journalize and post the closing entries, and prepare the post-closing trial balance

Which of the following transaction descriptions would result in the following? Debit Supplies Credit Accounts Payable, Gray's Office Supply

Purchase of office supplies from a company named Gray's Office Supplies

Which of the following transactions will cause one asset to be debited and another to be credited when the perpetual inventory system is in​ use?

Purchased merchandise inventory for cash

Which of the following tasks are performed by a bookkeeper?

Recording of business transactions into a software program such as QuickBooks

Form 940 is used by employers and the end of the calendar year to: Answer None of the above Transmit W-2 forms Report the amount of unemployment tax due for the year Report the amount of FIT and FICA withheld during the year

Report the amount of unemployment tax due for the year

Jim Rodgers is the treasurer of ABC Inc. He receives a check from a customer and endorses it as follows: Pay to the order of Giant Bank for deposit only. ABC Inc. What type of endorsement has Jim executed? Answer Full Blank Restrictive Federal

Restrictive

Owner's equity has which of the following as subdivisions?

Revenues, expenses, and withdrawals

The credit side of the any account is always the:

Right-hand side of the account The right-hand side of any account is the credit side, while the left-hand side is the debit side.

Which of the following would be credited if payroll tax expense is debited? Answer SUTA payable Wage and salary expense Federal Income Tax withheld payable Cash

SUTA payable

For the month of July, credit sales were $30,000, cash sales were $20,000, Sales Returns and Allowances were $1,000 and sales discounts were $2,000. What would be the credit to record the sales for July?

Sales for $50,000

Which of the following accounts have a normal credit balance?

Sales, accounts payable and capital

An alphabetical list of customers and the outstanding balances owed by each is called:

Schedule of accounts receivable

The W-3 is a form that is: Answer A form used to remit FICA payments to the Social Security Administration A form to be completed by employers who utilize independent contractors A form filed by an employer to obtain an EIN Sent to the Social Security Administration along with W-2s

Sent to the Social Security Administration along with W-2s

The accounts payable subsidiary ledger:

Should equal the accounts payable control account in the general ledger

The financial report that shows the changes in capital during the accounting period is the:

Statement of Owner's Equity.

Every controlling account must have its own:

Subsidiary Ledger

An error, on the company's books, in recording a $102 deposit as $201 would be included on the bank reconciliation as a(n): Answer Subtraction of $99 to the balance per books Addition of $99 from the balance per bank Subtraction of $99 to the balance per bank Subtraction of $201 from the balance per bank

Subtraction of $99 to the balance per books

The entry to replenish the petty cash fund included a debit to Equipment instead of Supplies for the purchase of supplies. This would​ cause: A. supplies to be understated. B. petty cash to be understated. C. equipment is understated. D. petty cash to be overstated.

Supplies to be understated

When the credits exceed the debits in an account, which of the following would be true?

The account would have an ending credit balance An account has a credit balance if the total of the credits exceeds the total of the debits If the balance is greater on the credit side, that is the side the ending balance would be on. The same is true for the debit side.

The process by which business transactions are recorded, financial statements are prepared, and temporary accounts are closed is called:

The accounting cycle

Below are selected balances from a trial balance. Applying the concept of normal balances, which of the following statements is true? Cash $10,000 (debit balance) Accounts Receivable $20,000 (credit balance) Accounts Payable $15,000 (credit balance) Capital $50,000 (debit balance)

The accounts receivable account should have a debit balance and the capital account should have a credit balance

Below are selected balances from a trial balance. Applying the concept of normal balances, which of the following statements is true? Cash $10,000 (debit balance) Accounts Receivable $20,000 (debit balance) Accumulated depreciation $4,000 (debit balance) Accounts Payable $15,000 (credit balance) Capital $50,000 (credit balance)

The accumulated depreciation account should have a credit balance

The account receivable subsidiary ledger shows:

The activity and balances owed by each customer

Which of the following explains why amounts withheld from paychecks would be credited to liability accounts? Answer The amounts were paid immediately to such entities such as the IRS and state income tax divisions The amounts are estimated as future payroll expenses The amounts are recognized as payroll tax expense The amounts have not yet been paid to entities such as the IRS and state income tax divisions

The amounts have not yet been paid to entities such as the IRS and state income tax divisions

Which of the following statements are true regarding the worksheet?

The balance sheet is prepared from the balance sheet columns of the worksheet

U.S. National Banking sends a credit memorandum of $14,975 to Pan Servings Inc., verifying the increase in the company's balance. What is a plausible explanation of this? Answer The bank acts as a collecting agent for Pan Servings and collected a $15,000 note and deducted a charge a $25 fee for the service with the net amount collected and added to the bank balance. A check for $15,000 from a customer was nonsufficient funds and a fee of $25 was deducted by the bank A check drawn on the Pan Servings account for $14,975 cleared A check drawn on the Pan Servings account for $14,975 was still outstanding from last month

The bank acts as a collecting agent for Pan Servings and collected a $15,000 note and deducted a charge a $25 fee for the service with the net amount collected and added to the bank balance.

Assets = Liabilities + Owner's Equity is the formula for:

The basic accounting equation

Which of the following would be found in the balance sheet credit column of the worksheet?

The beginning capital balance used on the Statement of Owner's Equity.

A listing of all the accounts used by a company is:

The chart of accounts

A manager is reconciling the checking account and has noted that $15,000 of checks are still outstanding checks and that the checking account balance per his check book is $10,000 but the bank statement shows a $24,750 balance. Which of the following is true? Answer The checks have been deducted from the bank balance but not from the checkbook and therefore most of the difference is attributed to that The checks have not been presented for payment even though they have been deducted from the checkbook and therefore most of the difference is attributed to that The checks have been returned for nonpayment and therefore there exists a difference between the checkbook balance and the bank statement balance The checks have not been presented to the bank for payment nor have they been deducted from the checkbook

The checks have not been presented for payment even though they have been deducted from the checkbook and therefore most of the difference is attributed to that

The income statement column totals on the worksheet show the following: Debit $60,000 credit $67,000 The balance sheet column totals in the worksheet show the following: Debit $100,000 credit $93,000 What most likely explains this "imbalance"?

The company had a $7,000 net income

After closing the revenue and expense accounts, Income Summary showed a debit balance of $1,500. Which of the following statements is true?

The company had a net loss of $1,500.

On a worksheet, the income statement debit column totals $12,500 and the credit column totals $10,100. Which of the following statements is correct?

The company had a net loss of $2,400

On a worksheet, the balance sheet debit column total is $17,000 and the credit column total is $4,000. Which of the following statements is correct?

The company had a profit of $13,000

What would be the effect on the accounting equation if an owner contributes $750 of computer equipment to the company for use in the company?

The computer equipment account would be increased by $750 and the increase capital by $750 When an owner contributes anything of value to a company for use in the operation of the company, the related asset account (i.e., computer equipment) would increase and capital would also increase as this is an increase in equity (owner investment) in the company. Previous Next

Payment for merchandise sold on credit for $200 subject to 2/10, n/30 was received within the discount period—$196 was received. This was recorded with a debit to Sales Discounts for $4, a debit to Cash for $196, and a credit to Accounts Receivable $200, but no mention was made of the subsidiary ledger account. This error will cause:

The control account to not agree with the subsidiary ledger

In the general journal, there is a record of a purchase of inventory on account from a company named Abby Road Inc. In the PR column, there is the number 211 and a check mark, what does the check mark signify?

The credit was posted to the accounts payable (subsidiary account) for Abby Road Inc.

An accounts receivable clerk notices that a customer paid on a $10,000 bill, nine days after the invoice date, that had terms of 2/10, n/30 but did not take the discount. Which of the following actions should be taken?

The customer should be issued a $200 refund

Form 1096 and form 1099 must be sent to the IRS by an employer when: Answer The employer hires independent contractors and a contractor was paid $600 or more during the calendar year The employer hires independent contractors and a contractor was paid $1,040 more during the calendar year The employer hires independent contractors and a contractor was paid $500 or more during the calendar year The employer hires independent contractors and a contractor was paid $300 or more during the calendar year

The employer hires independent contractors and a contractor was paid $600 or more during the calendar year

The Balance Sheet and Statement of Owner's Equity would both show:

The ending balance in the capital account The ending capital balance is found on both the Balance Sheet and Statement of Owner's Equity.

Which of the following is true regarding adjusting entries related to equipment?

The equipment account is not adjusted since it is recorded at historical cost and remains that way throughout its useful life

What does the following formula express: Assets = Liabilities + Capital - Withdrawals + Revenues - Expenses?

The expanded version of the accounting equation

Which of the following is true of Accounts Payable?

The individual amounts owed to the creditors should equal the balance in Accounts Payable of the general ledger

The collection on account within the 2/10, n/40 discount period was recorded using a 20% discount rather than a 2% discount in both the controlling and subsidiary accounts. This error will cause:

The net income for the period to be understated

Which of the following is not true of the Accounts Payable Subsidiary ledger?

The normal balance in the ledger is a debit balance

The sale of a product is traditionally recognized as revenue in the accounting records when:

The product is delivered to the customer

F.O.B. shipping point means that:

The purchaser pays or is responsible for the shipping costs from seller's shipping point to the purchaser's location

F.O.B. destination means that:

The seller is responsible for the cost of freight

An account has a credit balance if:

The total of the credit exceeds the total of the debits An account has a credit balance if the total of the credits exceeds the total of the debits If the balance is greater on the credit side, that is the side the ending balance would be on. The same is true for the debit side.

How would outstanding checks be handled when reconciling the ending cash balance per the bank statement to the correct adjusted cash​ balance?

They would be subtracted from the balance of the bank statement.

A sale for $8,920 was recorded erroneously as $89,200. Which of the following statements is true?

This is a slide A slide is when a posting is recorded incorrectly by dropping a zero or adding a zero. In this case, a zero was added to overstate sales.

At the end of the accounting period, the company's accountant prepared a trial balance to determine which of the following?

To assure that the total of the debit balances equal the total of the credit balances for the accounts in the general ledger

Net income or net loss for a period is calculated by the following formula:

Total revenues - total expenses

If the business records a sale as $189 and it should be $198, this error would be called a:

Transposition Transposing is the accidental rearrangement of digits of a number. Example: $189 or 198.

At the end of a period, certain steps are followed to prepare the financial statements. Which of the following would be the correct sequence of steps of report preparation?

Trial balance, income statement, statement of owner's equity, balance sheet

What is the purpose of posting?

Update the account balances in the ledger The transferring, copying, or recording of information from a journal to a ledger.

Which of the following task would most likely be performed by an accountant in a system that also employs a bookkeeper?

Using the records of the company to prepare an income tax return for the business

When a new employee is hired, which of the following forms is completed? Answer 1099 W-4 941 W-2

W-4

What account would be debited if an owner withdraws cash from a business?

Withdrawals As Withdrawals increase (debit), owner's equity decreases as well as Cash (credit).

Insurance purchased by most employers to protect their employees against losses due to injury or death while on the job is called: FICA Workman's Compensation Insurance Medicare FUTA

Workman's Compensation Insurance

A form used to organize and check data before preparing financial reports is known as a(n):

Worksheet

Financial statements are prepared from the:

Worksheet Income Statement and Balance Sheet columns

An accountant makes an error in the journal (prior to posting in the ledger). Which of the following is an acceptable way of correcting the error?

Write or a new journal entry or edit the existing one, correcting the original entry. You also can simply draw a line through the incorrect info, write the correct information and initial the change

​Jane's Jewelry sold 40 necklaces for $ 25 each to a credit customer. The invoice included a 6% sales tax and payment terms of 3/10, n/30. In​ addition, 7 necklaces were returned prior to payment. The entry to record the payment after the discount period would​ include: (Round any intermediate calculations to the nearest​ cent, and your final answer to the nearest​ dollar.)

a credit to Accounts Receivable for $ 875 math: 40-7=33 33x25=825 825x6%=49.5 49.5+825=874.5=875

A customer who bought merchandise for cash returned the merchandise. This transaction will be recorded with:

a credit to cash

​Jim's Accessories bought 150 necklaces for​ $40 each on account. Payment terms are​ 5/10, n/30. In​ addition, 14 necklaces were returned prior to payment. The entry to record the return would​ include:

a debit to Accounts Payable for​ $538. 14x40=560 560x5%=28 560-28=532

​Jane's Jewelry sold 30 necklaces for $ 25 each to a credit customer. The invoice included a 6% sales tax and payment terms of 6/10, n/30. In​ addition, 5 necklaces were returned prior to payment. The entry to record the return would​ include: (Round your calculation to the nearest whole​ dollar.)

a debit to Sales Returns and Allowances for $ 125 math: 5x25=125

Mid-West Tutoring had the following payroll information on January​ 31: Employee: R. Tanner Gross Pay: 4000 Cumulative Earnings Prior to this Payroll: 4400 ​Assume: FICA tax rates​ are: OASDI​ 6.2% on a limit of​ $128,400 and Medicare​ 1.45%. State Unemployment tax rate is​ 2% on the first​ $7,000. Federal Unemployment tax rate is​ 0.6% on the first​ $7,000. Federal Income Tax Withheld​ $900; State Income Tax Withheld​ $300. Using the information​ above, the journal entry to record the​ employee's payroll expense would​ include:

a debit to Wages and Salaries Expense in the amount of $ 4000

Returned merchandise paid for within the discount period for cash. The perpetual inventory system is in use. This return will be recorded​ with:

a debit to an asset and a credit to an asset.

When Balance Sheet credits exceed the debits on the worksheet:

a net loss has occurred.

A list of creditors with balances owed is called:

a schedule of accounts payable.

If the business records a number as 159 and it should be 195, this error would be called:

a transposition. Transposing is the accidental rearrangement of digits of a number. Example: 152 or 125.

A customer who purchased products from Acme Warehouse Inc. on credit returns the products as they were the wrong size. If a credit memorandum is issued, what account will be decreased on the Acme's books?

accounts receivable

Bank interest earned on a checking account would be shown on a bank reconciliation as: Answer added to the balance per books. added to the balance per bank statement. deducted from the balance per books. deducted from the balance per bank statement.

added to the balance per books.

Bank interest earned on a checking account would be shown on a bank reconciliation​ as: A. added to the balance per bank statement. B. added to the balance per books. C. deducted from the balance per books. D. deducted from the balance per bank statement.

added to the balance per books.

An​ error, on the​ company's books, in recording a​ $52 deposit as​ $25 would be included on the bank reconciliation as​ a(n): A. subtraction from the balance per books. B. addition to the balance per books. C. addition to the balance per bank. D. subtraction from the balance per bank.

addition to the balance per books.

The individual employee earnings record provides a summary of the following for a single employee, except: Answer allowances. withholding taxes. net pay. hours.

allowances

The proper sequence used in recording a business transaction is:

analyze, journalize, post, record the account balance, and complete the reference column in the journal.

The first step of the accounting cycle is:

analyzing business transactions.

A banking day is: Answer any weekday until 3:00 pm any day a bank is open to the public for business any day a bank is closed for a holiday any day during the period of Monday through Friday

any day a bank is open to the public for business

The employer records deductions from the​ employee's paycheck:

as credits to liability accounts until paid.

Merchandise Inventory is what type of account?

asset

Credit terms of​ 3/15, n/30 mean​ that:

a​ 3% discount is allowed if the customer pays the bill within 15​ days, or the entry amount is due within 30 days.

Federal Unemployment taxes are: Answer the same for all employers. based on employer's payment history. based on wages paid to employees and based on employer's payment history. based on wages paid to employees.

based on wages paid to employees and based on employer's payment history.

FUTA taxes are paid: Answer by the end of the month following the end of the calendar quarter if the amount owed is more than $500. at the same time as the Form 941 taxes. both by the end of January of the following year if the amount owed is less than $500 AND by the end of the month following the end of the calendar quarter if the amount owed is more than $500. by the end of January of the following year if the amount owed is less than $500.

both by the end of January of the following year if the amount owed is less than $500 AND by the end of the month following the end of the calendar quarter if the amount owed is more than $500.

Each adjusting entry affects:

both the Income Statement and the Balance Sheet.

A blank endorsement on a​ check: A. permits only the original endorser to get the money. B. is the safest type of endorsement. C. can be further endorsed by someone else. D. cannot be further endorsed by someone else.

can be further endorsed by someone else

Which item appears on both the balance sheet and the statement of owner's equity?

capital

The credit recorded in the journal entry to establish the petty cash fund is​ to: A. Cash. B. Petty Cash. C. Accounts Payable. D. Withdrawals

cash

When the accountant makes entries to bring the revenue and expense accounts and the withdrawal account to a zero balance while updating the capital account, she is executing the:

closing process

The bank would issue a credit memorandum to​ Marion's Life Management when the​ bank:

collects a note receivable from a customer.

Accumulated depreciation is considered to be a(n):

contra asset

A company keeps a detailed subsidiary set of records for each customer that owes money to the firm. The accounts receivable account in the general ledger is called the:

control account

Which type of organization can continue in operation indefinitely?

corporation

The entry to record a purchase of $ 15,000 on​ account, terms of 2/10, n/30, would include​ a:

credit to Accounts Payable for $ 15,000 .

The entry to record the payment of taxes withheld from employees and FICA taxes would be​ to:

credit​ Cash; debit FICA-OASDI Payable, FICA-Medicare Payable, and Federal Income Tax Payable.

An accountant totals up the outstanding balances of the accounts receivable subsidiary ledger and determines if the total agrees with a normal balance in the general ledger accounts receivable account. What should the normal balance be?

debit

The entry to record returned merchandise to Vine Company​ is:

debit Accounts​ Payable/Vans Company in the accounts payable subsidiary ledger and debit Accounts Payable in the general​ ledger; credit Merchandise Inventory.

The adjustment to record supplies used during the period would be:

debit Supplies Expense; credit Supplies

​Sam's Tutoring​ Service's $ 490 petty cash fund has a shortage of $ 3. The facts​ are: $ 170 in valid receipts for​ expenses; $ 487 in coins and currency. The journal entry to replenish the petty cash fund would include​ a:

debit to Cash Short and Over for $ 3.

The twelve-month period a business chooses for its accounting period is a(n):

fiscal year. A fiscal year is an accounting period that runs for any 12 consecutive months, so it can be the same as a calendar year.

The Wages and Salaries Expense account would be used to record: Answer a debit for the amount of net pay owed to the office workers. net earnings for the office workers. gross earnings for the office workers. a credit to the amount owed for overtime.

gross earnings for the office workers.

Which financial statement is prepared first?

income statement

What is the name of the account that is debited for expenses and credited for revenues and whose balance will represent either the net loss or net income for the period?

income summary

Which of the following is a permanent account?

land

Obligations that come due in the future are known as:

liabilities

A retail store's asset that is a type of inventory and is available for purchase by its customers is called:

merchandise

In a periodic inventory system, a company debits freight-in for a $500 shipping charge. What account would be debited if a perpetual system is used?

merchandise inventory

The bank statement does NOT show: Answer the date of the statement. any charges or additions to the bank balance. the checks the bank has paid and any deposits received. outstanding checks.

outstanding checks.

An account in which the balance is carried over from one accounting period to the next is called a:

permanent account

A W-4 form: Answer shows total net wages earned for the year. provides the number of allowances an employee has claimed. determines the amount of FICA-Medicare to be withheld. determines the amount of FICA-OASDI to be withheld.

provides the number of allowances an employee has claimed.

When the accountant sums the account balances in the accounts receivable subsidiary ledger to determine if that amount is equal to the ending balance in the accounts receivable control account in the general ledger, she is performing which of the following procedures?

proving

A form used within a business by the requesting department asking the purchasing department to buy specific goods is called a:

purchase requisition.

How often is Form 941 filed? Answer quarterly monthly twice a year annually

quarterly

If a Trial Balance is not equal, you should first:

re-add the Trial Balance and calculate the difference. If a Trial Balance is not equal, you should first re-add the Trial Balance and calculate the difference. Always add your numbers twice when footing your columns.

When goods are received, a member of the company's staff inspects the shipment and completes a:

receiving report

A debit to a liability account was posted to a revenue account. This would cause:

revenue to be understated. The normal balance of a revenue account is a credit, so if it was debited it could be understated.

A customer who purchased products from Acme Warehouse Inc. on credit returns the products as they were the wrong size. If a credit memorandum is issued, what account will be increased on the Acme's books?

sales returns and allowances

To prove the subsidiary ledger agrees with the Accounts Payable controlling account​ balance, complete​ a:

schedule of accounts payable.

A formal account that has columns for date, explanation, posting reference, debit, and credit is called the:

standard account.

The bank charged another​ company's deposit to our account. This would be included on the bank reconciliation as​ a(n): A. addition to the balance per bank. B. subtraction from the balance per bank. C. subtraction from the balance per books. D. addition to the balance per books.

subtraction from the balance per bank.

The first two numbers of the ABA code listed on the check​ represent: A. the code indicating business or personal account. B. the routing number. C. the Federal Reserve District. D. the account number.

the Federal Reserve District

A credit memorandum issued by a wholesaler would inform customer that:

the amount of goods returned has been subtracted from the customer's ongoing account with the wholesaler

The debit amount to Payroll Tax Expense represents: Answer the employer's portion of the payroll taxes. the employees' portion of the payroll taxes. None of the listed answers are correct. the employer's and employees' portion of the payroll taxes.

the employer's portion of the payroll taxes.

The financial statement that shows revenue and expenses is the:

the income statement

A debit to FUTA Payable would be made because: Answer the liability of FUTA was recognized the payment of FUTA was being made FUTA expense was recognized employees were cashing their paychecks

the payment of FUTA was being made

F.O.B. destination means:

the seller pays for the freight.

A petty cash fund is set up: Answer None of the listed answers are correct. to pay for small expenses. for the owner to withdraw money for personal use conveniently. to pay for office supplies only.

to pay for small expenses.

When the term F.O.B. shipping point is used, title or legal ownership of shipped goods passes to the buyer:

when goods are shipped

Which of the following accounts would NOT appear on the post-closing trial balance?

withdrawals

Which of the following transactions would result in a decrease in cash and a decrease in owner's equity?

$1,000 payment for the cost of renting an office last month

The adjusted trial balance shows a balance of $700 for supplies. The adjusting entry was a $900 amount (debit to supplies expense and credit to supplies). What was the unadjusted trial balance for supplies?

$1,600 The amount of supplies used is an expense which was the adjusting entry, bringing the supplies account down to a balance of $700. $900 of Expense + ending balance = beginning balance of $1,600.

A bank service charge of $10 would be included on the bank reconciliation as a(n): Answer $10 subtraction from the balance per bank $10 subtraction from the balance per books $10 addition to the balance per books $10 addition to the balance per bank

$10 subtraction from the balance per books

If the ending balance in the accounts payable account is $20,000 and the following activity occurred in that account during the period, what would be the beginning balance? Total credits for the period = $15,000 Total debits for the period = $5,000

$10,000 Since credits increase and debits decrease the balance of accounts payable, if the account went up by $15,000 (credit) and down by $5,000 (debit), then the account changed by $10,000 (an increase) during the period. If the ending balance was $20,000, then the beginning balance would be $10,000 ($20,000 - $10,000).

Frankie purchased a truck for $60,000 with a residual value of $10,000 and a life expectancy of 5 years; using straight-line depreciation, the amount of the depreciation adjustment for the first year would be:

$10,000 ($60,000 - $10,000)/5 = $10,000

Office salaries expense has a debit balance of $10,000 in the trial balance column of the worksheet. If the same row or column has a $2,000 debit in the adjustment column, what will be the office salaries balance in the adjusted trial?

$12,000

The following balances are taken from a company's trial balance. What is the net income? Cash $10,000 Accounts Receivable $5,000 Sales of product $25,000 Operating expenses $10,000 Withdrawals $2,000

$15,000

J. Muggs, capital was $7,000 on January 1, 20X1 when the fiscal year began. During the year, J. Muggs made an addition investment in the firm of $15,000. Also during the year, the company had revenues of $10,000 and expenses of $8,000. J. Muggs also withdrew $200 from the company for personal use. What should the December 31, 20X1 Statement of Owner's equity show for capital?

$16,800 The beginning capital was $15,000 which increased by $2,000 of net income ($10,000 - $8,000) and was reduced by the $200 withdrawal.

What is Acme Corporation's net income or net loss if it had Revenue of $2,800, Salary Expense of $500, Utility Expense of $250, and Withdrawals of $5,000 during October?

$2,050 net income Calculation: $2,800-500-250 = $2,050 net income

Revenues were $50,000, expenses were $30,000 and withdrawals were $3,000, what would be the balance in the income summary before it is closed to capital?

$20,000 credit balance

Determine total liabilities given the following balances: Cash $450, Accounts Receivable $275, Equipment $300 and Capital $700.

$325

​Calculate, from the following information accumulated by Gene​ Park, the adjusted cash balance at the end of April. Bank statement ending cash balance $2,710 General ledger cash balance ending 4,350 Bank monthly service charge 50 Deposits in transit 2,700 Outstanding checks 1,300 NSF check returned with bank statement 190

$4,110

Accounts payable had a beginning balance of $300 (credit) and had the following transactions during the month: Purchase on account $100 Purchase on account $200 Payment made on account $200 What is the ending balance of the account?

$400 (credit)

If the ending equity is $60,000 and the net income for the past period was $20,000 while withdrawals were $7,000, what was the beginning equity?

$47,000 With net income of $20,000 and withdrawals of $7,000, equity would have change by a positive $13,000. If the ending equity is $60,000, then the beginning equity was $47,000 ($60,000 - $13,000).

The cost of a new computer is $4,000 and its expected useful life is 5 years. If the residual value is estimated at $400 and the company uses straight-line depreciation, how much depreciation expense will be recorded for one month?

$60 ($4,000 - $400)/5 x 1/12 = $60 depreciation expense for one month.

The ending balance in accounts payable was $700. If there were debit postings of $100 and credit postings of $200 during the month, what was the starting balance in the account?

$600 credit Accounts payable carries a credit normal balance. $700-$200 + $100 = $600

For the second quarter, the amount of federal income tax withheld for a period is $47,000 and FICA withheld is $17,500. Which of the following is the correct total deposit amount for payroll taxes for the quarter? Answer $47,000 $64,500 $35,000 $82,000

$82,000 The total deposit would be the federal income tax withholding of $47,000 plus the total FICA of $35,000 ($17,500 + $17,500) for a total of $82,000. The employer must match the employee FICA withheld.

Corner Store Inc. reports gross sales of $120,000. If sales returns and allowances are $25,000 and sales discounts are $5,000, what are the net sales?

$90,000

An employee has $ 800 withheld from thie check for federal income tax. What is the​ employer's portion of the federal income tax they need to​ pay?

0

A company acquires $1,000 of inventory and pays an additional $60 in shipping costs to have the inventory delivered to its warehouse. How much will the company debit to its inventory account as a result of this purchase? Assume a perpetual inventory system is used.

1060

If a company utilizes an independent contractor and pays more than $600 in a calendar year to that contractor, the company must prepare and distribute a form: Answer 1099 W-2 940 941

1099

An employee has gross earnings of $ 1400 with withholdings of​ 6.2% FICA-OASDI, 1.45% FICA-Medicare, $50 for federal income tax and $ 30 for state income tax. How much is the net​ pay? (Round any intermediate calculations to the nearest​ cent, and your final answer to the nearest whole​ dollar.)

1213 6.2+1.45=7.65 1400x7.65%=107.1 1400-107.1-50-30=1212.9=1213

How many weeks is a three-month calendar quarter? Answer 6 12 None of the above 13

13

A customer makes a purchase on credit and is given these credit terms: 2/15, n/30. What is the discount period?

15 days

On October​ 31, Janoch's Dog Kennel purchased $ 1400 of merchandise on account from the Ganster Company. The goods were shipped F.O.B. shipping point. The freight charge of $ 130 was paid by Ganster Company and added to the invoice. The amount to record in the Merchandise Inventory account​ is:

1530 1400+130=1530

Bob's Auction​ House's payroll for April includes the following​ data: Gross earnings$ 3900 Salaries subject to​ FICA: 6.2% OASDI 2080 ​1.45% Medicare 3900 Salaries subject to​ unemployment: ​0.8% FUTA 2,000 ​2.0% SUTA 2,000 Other deductions​ include: Federal income tax 500 State income tax 300 What is the​ employer's portion of the​ taxes? (Round intermediary calculations to the nearest cent and final answers to the whole​ dollar.)

242

An employee has gross earnings of $2,200 with withholdings of 6.2% FICA-OASDI, 1.45% FICA-Medicare, $550 for federal income tax and $110 for state income tax. How much is the net pay? Answer $1,481.70 $2,031.70 $2,200 $1,371.70

$1,371.70 $2,200 of gross pay less FICA of $168.30 less federal tax of $550 and state tax of $110 equals net pay of $1,371.70

K. Jones is paid bi-weekly. For her most recent pay period, she works 40 hours of regular time and 5 hours of overtime in week 1 and 30 hours in week 2. Her regularly hourly rate is $20 and she is paid 1.5 times the regular rate for overtime hours. What is her gross pay? Answer $1,000 $1,550 $1,400 $1,850

$1,550

Compute net earnings on June 15, when gross (taxable) pay equals $2,500. FICA-OASDI tax rates are 6.2%, FICA-Medicare rate is 1.45%, federal income tax $625.00, and state income tax $125.00. $2,308.75 $1,558.75 $1,683.75 $1,367.50

$1,558.75

For a certain category of worker, a company must pay $1.80 for every $100 of payroll for workman's compensation insurance. The total gross pay for the year for those workers is $100,000 and the net pay is $70,000. What is the amount of insurance premium owed for workman's compensation insurance? Answer $1,260 $180 $1,800 $3,060

$1,800

On May 15, K. Smith earned $3,000 and has the following deductions: FICA-OASDI 6.2%, FICA-Medicare 1.45%; federal income tax of $750; state income tax $90, and union dues of $50. What is her net pay? $1,930.50 $1,651 $1,880.50 $3,000

$1,880.50

An employee has gross earnings of $3,200 with withholdings of 6.2% FICA-OASDI, 1.45% FICA-Medicare, $800 for federal income tax. State tax is 5% of the gross earnings. How much is the net pay? Answer $2,955.20 $2,155.20 $1,995.20 $3,200

$1,995.20

XYZ Company buys a $10,000 tractor from Tractor USA Inc. and is granted 30 days to pay. XYZ accountants maintain an accounts payable subsidiary ledger. Which of the following is true regarding the recording of this transaction?

$10,000 would be immediately credited to Accounts Payable, Tractor USA

Under a perpetual inventory system, a company pays its supplier, within the discount period, for a previous purchase on account. The purchase was for $5,000 and the discount was $100. Which of the following would be credit entry in the company's general journal as a result of this transaction?

$100 credit to inventory

​Sam's Online Service on April 30 has the following​ transactions: Merchandise Inventory purchased $24,000 Merchandise Inventory returned $3000 If​ Sam's is offered a 2% discount, but does not pay the invoice in time to receive the​ discount, how much does Sam​ owe?

$21,000

An employee has gross earnings of $3,000 with withholdings of 6.2% FICA-OASDI, 1.45 % FICA-Medicare, $600 for federal income tax and $50 for state income tax. How much is the gross pay? Answer $3,000 $2,770.50 $2,400 $2,120.50

$3,000

Determine total liabilities given the following balances: Cash $550, Accounts Receivable $275, Equipment $300 and Capital $700.

$425

The accounts payable for a company has a month end balance of $500. During the month, the company bought $750 of merchandise on account and received a $200 bill for utilities. There was also a $1,000 payment made on the account. What was the beginning balance?

$550 (credit)

If the employee has $600 withheld from their check for FICA-OASDI, what is the amount that the employer would need to pay? $600 $300 $114 $486

$600

Jared's cumulative earnings before this pay period were $5,340, and gross pay for the week is $600. Assuming the wage base limit is $7,000, how much of this week's pay is subject to taxes for SUTA and FUTA? Answer $550 $1,550 $600 $0

$600

The gross pay for a particular period is $27,000 however, the FUTA taxable earnings for that amount is $15,000. If the FUTA rate is 6% and the FUTA tax credit is 5.4%, what amount does the employer owe for FUTA? Answer $1,458 $162 $900 $90

$90 FUTA = FUTA earnings of $15,000 x (6% - 5.4%) = $15,0000 x .006 = $90

Mary's cumulative earnings before this pay period were $7,300 and gross pay for the week is $1,200. Assuming the wage base limit is $7,000, how much of this week's pay is subject to taxes for FUTA and SUTA? $6,100 $0 $7,000 $1,200

0

Which of the following transactions would result in a decrease in assets and a decrease in owner's equity?

A $1,000 withdrawal of cash from a business by the owner for the cost of a personal vacation

Which of the following is a work week? Answer A 5-day period (120 hours) that must start on a Monday A 7-day period (56 hours) that can start on any day A 7-day period (168 hours) that can start on any day A 5-day period (56 hours) that can start in any day

A 7-day period (168 hours) that can start on any day

Which of the following does not fit the definition of a work week? Answer A week that starts on a Monday and ends at the conclusion of the following Sunday A week that starts on a Tuesday and ends 168 hours later Any 7-day period (168 hours) A time period that starts on a Monday and ends 40 hours later

A time period that starts on a Monday and ends 40 hours later

Jim​ Stein's hourly wage is​ $40.00, and he worked 42 hours during the week. Assuming an overtime rate of time and a half over 40​ hours, Jim's gross pay​ is: ​(Round your answer to the nearest whole​ dollar.) A. $1,720. B. $1,680. C. $1,760. D. $1,840.

A. $1,720.

A debit memorandum decreases which account on the​ buyer's books?

Accounts Payable

A debit memorandum decreases which account on the​ seller's books?

Accounts Receivable

Which of the following is true of an expense? All of the listed answers are correct It is a cost incurred in running a business It happens because goods or services are consumed in producing revenues It is a subdivision of owner's equity

All of the listed answers are correct

Prepaid​ Worker's Compensation Insurance is what type of​ account? A. Expense B. Asset C. Liability D. Contra asset

B. Asset

Retained earnings appears on which two financial statements?

Balance sheet and the statement of owner's equity

A company purchases property insurance coverage for the next 12 months and will pay for the coverage next month. The coverage starts immediately. Prepaid Insurance is debited for $12,000. Which of the following entries would also be entered into the general journal?

Credit Accounts Payable $12,000

The recording of the cost of freight-in owed under the perpetual inventory system would include:

Credit to accounts payable

FICA​ (OASDI and​ Medicare) and unemployment taxes are similar in that​ they: A. are paid by the employee. B. have the same maximum taxable wage base. C. are a specified percent of federal income tax withholdings. D. are payroll tax expenses of the employer.

D. are payroll tax expenses of the employer.

Which of the following would properly record a $10 discount on a $1,000 purchase if the vendor is paid within the discount period and a perpetual inventory system is used?

Debit $1,000 Accounts Payable Credit $990 Cash Credit $10 Inventory

The recording of the cost of freight-in under the perpetual inventory system would include a:

Debit to Merchandise Inventory.

Both employees and employers pay which of the following taxes? Answer FICA taxes (OASDI and Medicare) FUTA tax Federal income tax State income tax

FICA taxes (OASDI and Medicare)

Which of the following must also be "matched" by the employer and paid from company funds? Answer Federal income taxes withheld from the employee's paycheck FICA-OASDI taxes withheld from the employee's paycheck State income taxes withheld from the employee's paycheck Local income taxes withheld from the employee's paycheck

FICA-OASDI taxes withheld from the employee's paycheck

A company that utilizes a periodic inventory system incurs a $750 shipping charge when it receives a delivery of merchandise, which of the following accounts would be debited?

Freight-in

In the general journal, there is a record of a purchase of inventory on account from a company named Benny's Inc. In the PR column, there is the number 211 and a check mark, what does the "211" mark signify?

It is the account number for the general ledger accounts payable account and it documents the posting to that account

Which of the following statements are true of a corporation?

It is the type of business organization that can continue indefinitely

When using accrual accounting, an expense should be recorded when:

It's incurred.

Which of the following forms of business organizations are owned by a limited number of members, limits the risk of loss, and may end its existence upon the death of one of its owners?

Limited liability company (LLC)

Hershey's is an example of which of the following types of business organziations?

Manufacturing

Which of the following is an asset that is available for sale to customers?

Merchandise inventory

Which of the following is true of FICA taxes (OASDI and Medicare)? Are not paid by either employer or employee if the state requires unemployment taxes Paid by both the employee and the employer Paid by the employee only Paid by the employer only

Paid by both the employee and the employer

Assets are:

Properties of value owned by a business (cash, supplies, land)

As the result of a particular transaction, assets increased as well as liabilities. Which of the following types of transactions would have such an effect?

Supplies were purchased on credit

What record keeps track of an individual employee's payroll history for a calendar year? Answer Payroll register The employee earnings record W-4 General journal

The employee earnings record

Assets = Equities expresses which of the following?

The relationship between assets and total claims against those assets

When goods are shipped and F.O.B. shipping point is used:

Title or legal ownership of shipped goods passes to the buyer when goods are shipped

Which of the following would not be on a payroll register? Answer Gross pay to date Overtime hours Regular hours Unemployment taxes

Unemployment taxes

Which of the following would not be part of an employer's payroll tax expense? Answer Union dues withheld from an employee's paycheck SUTA FICA FUTA

Union dues withheld from an employee's paycheck

Purchased office supplies on account. This will be recorded​ with:

a debit to Supplies and a credit to Accounts Payable.

A book or file that contains, in alphabetical order, the name of the creditor and amount owed from purchases on account is the:

accounts payable subsidiary ledger

Which of the following forms of business organizations are owned by shareholders and have limited risk for the shareholders?

corporation

In a perpetual inventory system, a company pays transportation costs of $90 (F.O.B shipping Point) to acquire merchandise. Which of the following accounts would be debited by $90?

inventory

Assets = Liabilities +

owner's equity

Net income and withdrawals are subdivisions of:

owner's equity

Which of the following is not included in the FICA tax? Answer A tax for old age benefits also known as Social Security A tax for survivor and disability insurance Unemployment tax A tax for Medicare insurance

unemployment tax