Accounting 101-20 Test 2 Chapters 5-8
True
A banking day is any day that a bank is open to the general public for business
True
A signature card verifies authenticity of the signature on all checks written by the business
False
After posting adjusting entries, the temporary accounts will be set back to zero
Prepaid Insurance
After posting the closing entries, which of the following accounts is most likely not to have a zero balance?
False
All states use the same percent for the state tax rate
True
Businesses will make their payroll tax deposits based on payroll taxes collected
$622.50
Calculate an employee''s total earnings if the company pays time-and-a-half when Jill Smith works 41 hours at $15 per hour.
Canceled Checks
Checks that have been processed by the bank and are no longer negotiable are
True
Companies can choose different pay periods for hourly workers versus salary workers
True
Deposits in transit result because of a timing difference between the bank records and checkbook records
True
Depreciation Expense is closed to Income Summary, but Accumulated Depreciation is not closed
transfers the right to deposit or transfer cash
Endorsing a check:
True
FICA-Medicare provides for medical benefits after age 65
Payroll bank account
Firms with large number of employees generally use which of the following for disbursing payroll to employees?
False
Gross pay is equal to take-home pay:
Income from service 20,400 Income summary 20,400
If Income services had a $20,400 credit balance before closing entries, which of the following would be appropriate closing entry to close revenue?
$200
If an employee has $200 withheld from their check for FICA - Social Security, what is the amount that the employer would need to pay
False
If the ending balance in the Cash Short/Over account is a credit, it indicates that cash shortages have exceeded cash overages for the period
Payments are made by cash, duties of employees will be divided, and all cash receipts will be deposited into the bank the same day they arrive.
Internal control over a company's assets should include the following policy:
Gross pay less deductions
Net pay equals:
True
Premiums for worker's compensation insurance maybe adjusted based on actual payroll amounts at the end of the year
Asset
Prepaid Worker's Compensation insurance is what type of an account?
True
Revenues and expenses are closed to the Income Summary account
False
SUTA tax payable increases on the debit side of the account.
DR Cash Short Over account; Expense
The Cash Short and and Over Account covers both shortages and overages that occur in a business. What is the correct entry to record a shortage in the Cash Short and Over account? Where will the account appear on the income statement?
FICA
The Federal Insurance Contributions Act is better known as:
Employer
The Federal Unemployment Tax (FUTA) is paid by the
True
The Petty Cash account is used to pay for small items such as postage stamps and supplies
Asset
The Petty Cash fund is a(n)
True
The Withdrawals account is closed to the owner's capital account
Worker's Compensation Insurance Expense DR; Prepaid Insurance CR
The adjusting entry for expired workers' compensation premium is
True
The drawer writes the check
False
The employer pays the same amount as the employee for Federal Unemployment taxes
Debit to Change Fund
The entry to establish the change fund includes which of the following?
State Unemployment Tax Payable DR; Cash CR
The entry to record the payment of state unemployment tax is
the State Income Reporting Form
The form also know as the wage and tax statement is
True
The goal of closing is to clear all temporary accounts and update Capital
Cash is CR
The payment of employee's state income tax results in which of the following?
False
The payroll tax expense is not recorded at the same time the payroll is recorded
Payee
The person or company to whom a check is payable is called the
True
The two parts of the FICA are Medicare and Social Security
$49.60
Tracey Thrasher earned $800 for the week. If her cumulative earnings are $27,000 prior to this pay period, how much FICA-Social Security must her employer withhold from her earnings? FICA tax rates are Social Security 6.2% on a limit of $118,500.
the employee is paid time and a half.
Under the Fair Labor Standards Act, for any hours that an employee works over 40 during a work week:
Expenses are recorded when they are paid
Under the cash basis of accounting, which of the following statements is true?
Equal to gross pay
Wages and Salaries Expense is
Accounts Receivable $250 DR; Cash $250 CR
What is the journal entry to record NSF check from J. Smith for $250, that is returned with the bank statement?
Prepare a post-closing Trial balance
What is the third step in the accounting cycle?
liability
What type of an account is wages and salaries Payable?
Employee Identification Number
When a business starts, what must it obtain that identifies itself to the government?
Captial would increase
When closing the Income Summary account when there is a net income
Quarterly
When is Form 941 submitted?
Each payday
When is the payroll resister is updated?
Credit to cash
When the Petty Cash account is replenished at the end of the month, the journal entry includes which of the following?
Income Summary will be debited.
When the expenses are closed
R. McDonald, Capital
Which account would appear on the post closing trial balance?
Service Revenue
Which account would be closed during the closing process?
Endorsements
Which of the following does not affect the bank statement?
Canceled checks
Which of the following does not explain the difference between the bank statement balance and the customer's cash balance?
2.5 hours of overtime
Which of the following is not a deduction from total earnings?
Having only one person responsible for the payroll function, due to confidentiality concers
Which of the following is not an internal control for preventing or detecting payroll fraud?
Federal Income Tax
Which of the following is not considered a payroll tax expense?
Make weekly deposits
Which of the following is not example of an internal control system?
Wage-bracket taxtable
Which of the following is not included in the payroll register?
Salesperson
Which of the following is not usually considered an independent contractor?
Analyze transactions, journalize, post, adjust, prepare financial statements, close.
Which of the following sequence of actions describes the proper order in the accounting cycle?
Federal Unemployment (FUTU)
Which of the following taxes are not withheld from an employee?
Owners Capital
Which of the following would appear on the post-closing trial balance
Job risk
Worker's compensation insurance premiums are based on which of the following?
Interim Statements
are prepared during the fiscal year for periods of less than 12 months