Accounting Final

- For this text, it is assumed that the maximum amount of earnings subject to FICA taxes is

$110,500

- A "?" contains a listing of all items being deposited

A deposit ticket

Persons earning self-employment income of $600 or more must pay a self-employment tax

False, $400

-The capital account decreases when the owner invests money in the business

False, Capital account increases

-Capital at the beginning of the month amounted to $4,000; net income for the month amounted to $1,000; and withdrawals for personal use during the month amounted to $2,000. Capital at the end of the month is $5,000

False, Capital at the end of the month is $3,000

-A purchase of an asset on account Decreases assets

False, Increases assets

To close and expense account with a debit balance , Debit the account for its balance and debit the income summary account

False, credit the account for its balance and debit the income summary account

The date by which federal income tax withholding, Social Security, and Medicare taxes must be paid does not depend on the amount of these taxes

False, depends on the amount of the taxes

The formula to calculate straight-line depreciation is depreciable cost mulitplied by the expected life of the asset

False, depreciable cost divided by the expected life of the asset

- Posting from the journal to the ledger does involve Entering the description of the entry

False, does NOT involve entering the description of the entry

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

False, it is known as a petty cash voucher

recognizing the effects of transactions on assets, liabilities, owners equity, revenue, and expenses of a business is the Balance Sheet

False, it is the Processing Function

With Drawing Cash from a business entity will result in an increase in owners equity

False, it will result in a decrease in owners equity

A credit represents a increase in an asset

False, represents a decrease in an asset

-Footings in T accounts are necessary when there is only one entry

False, unnecessary

- After the closing entries have been posted, the Miscellaneous Expense would have a balance

False, would NOT have a balance

- Employers report payroll taxes withheld each quarter using Form "?"

Form 941

- Employee's Wage and Tax Statement is called a Form

Form W-2

- A temporary account used in the closing process to summarize the effects of all revenue and expense accounts is called an

Income Summary

- "?" are obligations that are not expected to be paid within a year and do not require the use of current assets

Long-term liabilities or long-term debt

-"?" are checks that have been issued during the period, but have not been presented to the bank for payment before the bank statement is prepared

Outstanding checks

- To sign the back of a check with the name of the company and "?" is an example of a restrictive endorsement

Pay to any bank

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

Petty cash vocher

- A tax levied on employers to raise funds to pay unemployment benefits is called

SUTA (state unemployment tax) tax

- After the accounts are closed and the journal entries have been posted, Supplies accounts would have a balance

True

- The journal entry to close the income summary account (showing a profit) includes debiting Income Summary and crediting the owner's capital account

True

-Payment of office rent represents a decrease in cash

True

-Plant assets are assets of a durable nature that are expected to provide benefit to the business over several years

True

A fiscal Year does not necessarily correspond with a calendar year

True

An increase in a revenue account may also result in an increase in the accounts receivable account

True

Elysa pain $135 for utilities for her office, this transaction decreased the cash account an increased the expense account.

True

If Owners Equity and Liabilities increased during a period, the assets must have also increased.

True

If services for the month total $3300 in cash and $700 on account, Accounts receivable increases $700

True

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

True

If the depositor's book balance is not the same as the bank's book balance, this does not always indicate there is an error, there are five other possible reasons the difference could exist in addition to an error

True

Increases to owner's equity may be from revenue that is derived from sales of good or services

True

Plant assets provide benefits over a long period of time

True

Since supplies last for several months they are recorded as assets

True

To close the income summary account with a credit balance, you will debit the account for the balance and then credit the owner's, capital account

True

To establish a change fund, cash should be credited and change fund should be debited

True

Under the cash basis of accounting, a certain expense may be incurred in one period but not entered until the following period

True

Use a T account to keep track of the daily shortages and overages as they occur. These shortages and overages are journalized when you make your journal entries for cash

True

When services are performed for which payment will be received later, accounts receivable increases

True

Whether the wage-bracket method or some other method is used in computing the amount of tax to be withheld, the sum of the taxes withheld from an employee's wages is only an approximation of what the employee's actual taxes will be for the year

True

- Employers use the Form "?" to transmit employees' W-2 forms to the Social Security Administration

W-3

- Each employee is required to furnish the employer with which of the following forms

W-4

-"?" are compensation for skilled or unskilled labor

Wages

-"?" exempts a specific dollar amount of an employee's gross pay from federal income tax withholding

Withholding allowance

- Employer's Quarterly Federal Tax Return is a Form

a Form 941

- A balance sheet in which the assets are on the left and the liabilities and the owner's equity sections are on the right is called an

account form of balance sheet

- The steps involved in accounting for all of the business activities during an accounting period is called the

accounting cycle

- An unwritten promise to pay a supplier for assets purchased or services rendered is known as

accounts payable

- Items that are owned by a business and will provide future benefits are called

assets

- Bringing the book and bank balances into agreement is called

bank reconciliation

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

blank endorsement

- Another name for a journal is "?" because it is here that the first formal accounting record of a transaction is made

book of original entry

- The concept that non-business assets and liabilities are not included in the business' accounting records is known as the

business entity concept

- an economic event that has a direct impact on the business

business transaction

- The statement of owner's equity reports the investments and withdrawals by the owner, the profits and losses generated through operations, and how they have affected which account?

capital account

- A supply of currency and coins kept in a cash drawer for use in handling sales transactions is called

change fund

- Accumulated Depreciation-Delivery Equipment is an example of a

contra-asset account

- When a single-check for payroll is prepared and deposited into a special payroll bank account, the following entry is made to record the deposit, that entry is...

debit Payroll Cash; credit Cash

-The petty cash payments record indicates classified expenditures as follows: Automobile Expense, $20; Supplies Expense, $12; Postage Expense, $6; and Miscellaneous Expense, $5. The transaction would include what?

debiting Automobile Expense

- A debit to either the drawing account or an expense account will cause a "?" in the owner's equity of a business

decrease

- A form showing a detailed listing of items being deposited is a

deposit ticket

- Deposits that have not reached or been recorded by the bank before the bank statement is prepared are called

deposits in transit

- The Item column in a general ledger is used to provide

descriptions for special entries

- With "?", the employee does not handle the paycheck; payment is made by the employer directly to the employee's bank

direct deposit

- A separate record of each employee's earnings is known as an

employee earning record

- Taxes levied on employers at the same rates and on the same earnings bases as the employee FICA taxes is called

employer FICA taxes

A debit is on the right side

false, debit is on the Left side

- The total dollar amounts on the debit and credit sides of an account is known as the

footings

- A complete set of all the accounts used by a business is called a

general ledger

- The columns of the work sheet that report the adjusted balances for only revenue and expense accounts are the

income statement columns

- Someone who performs a service for a fee and does not work under the control and direction of the company paying for the service is called an

independent contractor

- Someone who performs a service for a fee and does not work under the control and direction of the company paying for the service is known as an

independent contractor

- A day-by-day listing of the transactions of a business is called a

journal

- Obligations that are not expected to be paid within a year and do not require the use of current assets are called

long-term liabilities

- Gross pay less mandatory and voluntary deductions is called

net pay

- A formal written promise to pay a supplier or lender a specified sum of money at a definite future time is a

notes payable

- The period of time required to purchase supplies and services and convert them back into cash is known as an

operating cycle

-Social security provides "?&?" benefits.

pensions and disability

- Accounts that accumulate information across accounting periods; all accounts reported on the balance sheet are known as a

permanent accounts sheet

- The process of copying the debits and credits from the journal to the ledger accounts is known as

posting

- The "?" shows the liabilities and owner's equity sections below the asset section

report form balance sheet

- When words such as "for deposit only" or "pay to the order of" are added to a blank endorsement, it becomes a

restrictive endorsement

- Compensation for managerial or administrative services is called

salary

- The expected market value or selling price of the asset at the end of its useful life is called the

salvage value

- A "?" occurs when debit or credit amounts move a digit or two to the left or right when entered

slide error

- Net income is shown on the work sheet as a debit in the Income Statement column

true

- The Posting Reference column of the journal provides a cross-reference between the journal and ledger

true

- The simplest form of journal is one with two columns

true

- The total assets amount to $24,000 and the total liabilities amount to $18,000. The amount of the owner's equity is $6,000

true

- When posting an adjusting entry to the general ledger, write "adjusting" in the Item column

true

Entering the account number in the post Reference Column of the journal id done before the general ledger is completed

true

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

true

The cost of workers' compensation insurance to a construction company with 500 employees would be higher than the cost of insurance to a small candy company with only five employees

true

The fact that each transaction has a dual effect on the accounting elements provides the basis for what is called double-entry accounting

true

- Compensation for skilled or unskilled labor is known as

wages

- The "?" is a form used to pull together all of the information needed to enter adjusting entries and prepare the financial statements

work sheet