Exam 3 study guide - ACC100
A statement that accounts for the differences between the bank statement balance and the book balance of cash is called a _____________.
bank reconciliation statement
Match the term with the correct definition:
blank endorsement - signature transferring ownership without specifying who or why full endorsement - a signature transferring a check to a specific person, firm, or bank restrictive endorsement - a signature that transfers a check to a specific party for a specific purpose endorsement - a written authorization that transfers ownership of a check
The process by which employees are investigated by an insurance company that will insure the business against losses by employee theft or mishandling of funds is called:
bonding
The social security tax, or FICA tax, is paid by:
both the employee and employer
The Medicare tax is withheld by the employer on behalf of:
both the employee and the employer
A check that has been paid by the bank on which it was drawn is called a _______ check.
canceled
Identify which of the following are correct steps to prepare the adjusted trial balance section of the worksheet:
combine the figures from the Trial Balance section and the Adjustments section of the worksheet. compute the Debit and Credit column totals in the Adjusted Trial Balance
All of the following activities are performed in preparing the trial balance of a worksheet EXCEPT:
computing and enter running balances after each entry
An account that has a normal balance that is opposite that of a related account is called a _______ account.
contra
The general journal entry to record payroll expense will include which of the following entries:
credit to Medicare Tax Payable debit to wages expense credit to salaries and wages payable
Gill Company calculated equipment depreciation for the month of $500. The necessary adjusting entry will include a:
credit to accumulated depreciation debit to depreciation expense
The four-quarter period ending on June 30 of the previous year and used to determine the payroll taxes deposit schedule is called the ________ period.
lookback
Federal law requires that certain payroll records be maintained. For each employee the employer must keep a record of:
name, address, social security number, and birth date taxes withheld proof of citizenship hours worked and wages paid
The statement of owner's equity uses which of the following items from a worksheet:
net income from the income statement
Federal tax deposit have various due dates, depending on the amount. Identify which of the following schedules are used:
next banking day payments semiweekly payments monthly payments
A payroll register contains which of the following columns:
number of hours social security gross amount Medicare
An employer's accounting records show $20 of Federal unemployment tax and $60 of State unemployment tax. The entry to record the employer's unemployment taxes will include a debit to:
payroll tax expense
A cash fund used to handle payments involving small amounts of money is called a ____________.
petty cash fund
A form that is used to record a payment made from a petty cash fund is called a __________.
petty cash voucher
future check
postdated
Using the worksheet, net income can be calculated by taking the difference between:
total credit and total debits in the income statement section
The general journal entry to record payroll includes a debit to:
wages and salary expense for gross pay
A company has one employee. During the week, the employee worked 40 hours per week, and is paid at an hourly rate of $10 per hour. Assume social security tax is 6.2%, Medicare tax is 1.45%, and the employee's federal tax withholding is $46. The entry to record this employee's payroll will include a debit to:
wages expense for $400.00
Identify the accounts that would not appear on a company's balance sheet:
withdrawals
The Medicare Tax is:
withheld equally from the employee and employer used to pay for medical care after the employee turns 65
Employers are required to have a type of coverage that protects employees against losses from job-related injuries or illnesses, or compensates their families if death occurs in the course of the employment; this coverage is called __.
workers' compensation insurance
Based on employee earnings for the previous year, Excellent Lighting Company paid an estimated premium of $900 for worker's compensation insurance in advance for the new year. The actual premium at the end of the year was $1,000. The year-end adjusting journal entry to record the additional amount would require a debit to the _____ account for $100.
workers' compensation insurance expense
Dora Hernandez is paid $10 per hour. During the week ended 11/30, Dora worked 25 hours. Assuming a 6.2% social security tax, the company would withhold $____ from Dora's gross pay for social security taxes.
$15.50
The formula for straight-line depreciation is:
(cost-salvage value)/estimated useful life
Place the following column headings in the order they appear on a worksheet. Instructions
1. Trial Balance 2. Adjustments 3. Adjusted Trial Balance 4. Income Statement 5. Balance Sheet
The Adjusted Trial Balance section of the worksheet is computed by combining which sections of the worksheet:
Adjustments section Trial Balance section
A company's payroll register showed total employee earnings of $500 for the payroll period ended June 30. The employer's share of the social security tax is $31.00 and Medicare tax is $7.25. The general journal entry to record the employer's payroll taxes for the period will include a (debit/credit) debit ___________ to the payroll tax expense account in the amount of $_____
Blank 1: debit Blank 2: $38.25
San Company calculated equipment depreciation for the month of $800. The necessary adjusting entry will include a debit to _________ expense and a credit to __________ depreciation in the amount of $800.
Blank 1: depreciation Blank 2: accumulated
A good internal control is to make changes to employee withholding allowances based only on a Form properly completed and signed by the employee.
W-4 or W4
What account is credited for the payment of Federal Unemployment Taxes?
Cash. Federal Unemployment Tax Payable is debited.
Federal law requires that employers must keep a record of:
Cumulative wages throughout the year
True or false: The owner's capital ending balance is carried from the balance sheet to the statement of owner's equity.
False
Employers are responsible for matching payments of _______ and _______ tax expenses.
Medicare social security
A federal act providing certain benefits for employees and their families, such as retirement benefits and disability benefits, is known as the _________ ___________ Act.
Social Security
True or false: Employers make tax deposits for employer and employee Medicare taxes, employer and employee social security taxes, and the federal income tax withheld from employee earnings.
True
True or false: Most companies are required to file and pay federal tax deposits electronically; however, some companies may use a tax deposit form and pay by check.
True
An employer's accounting records show $300 of Federal unemployment tax and $750 of State unemployment tax. The entry to record the employer's unemployment taxes will include which of the following entries:
a debit to Payroll Taxes Expense a credit to Federal Unemployment Tax Payable a credit to State Unemployment Tax Payable
Identify which of the following accounts would appear on a balance sheet:
accounts payable ending capital accumulated depreciation cash
An account that is used to record all depreciation taken on an asset during its useful life is called ___________ depreciation.
accumulated
Match the tax deposit due dates with the appropriate deadline
accumulated tax deposit < threshold = employer may pay the amount due with the payroll tax return employer may pay the amount due with the payroll tax return lookback period < $50,000 = employer must make monthly payments employer must make monthly payments lookback period > $50,000 = employer must make semiweekly deposits employer must make semiweekly deposits accumulated tax liability > $100,000 = deposit is due next banking day
Identify which of the following column headings appear in a worksheet:
adjustments adjusted trial balance balance sheet
Workers' compensation insurance provides coverage to employees who:
are injured while on the job
A company has one employee. During the week, the employee worked 40 hours per week, and is paid at an hourly rate of $10 per hour. Assume social security tax is 6.2%, Medicare tax is 1.45%, and the employee's federal tax withholding is $20. The entry to record this employee's payroll will include which of the following entries:
credit to wages payable for $349.40 debit to wages expense for $400.00 credit to social security tax payable for $24.80, Medicare tax payable for $5.80, and federal income tax payable for $20
Based on employee earnings for the previous year, Gonzo Bookkeeping Company paid an estimated premium of $500 in advance for the new year. At the end of the year, the actual premium was computed for $600. The year-end adjustment for $100 would include which of the following entries:
credit to workers' compensation insurance payable debit to workers' compensation insurance expense
A company issued a check to replenish its petty cash fund. An analysis of payments from the fund showed only one payment of $50 for delivery expense. The replenishment would be recorded with a:
debit to delivery expense credit to cash
Depreciation for equipment this month is $300. The necessary adjusting entry will include a:
debit to depreciation expense
When a promissory note is used to replace an outstanding accounts receivable balance, the entry to record this transaction requires a:
debit to notes receivable credit to accounts receivable
On May1, Chadha Associates paid $6,000 rent in advance for a six-month period. The $6,000 was debited to the Prepaid Rent account. The necessary adjustment at May 31 would include which of the following entries:
debit to rent expense for $1,000 credit to prepaid rent for $1,000
Which of the following are internal controls related to cash receipts:
deposit cash receipts into the bank account daily
A form prepared to record the deposit of cash or checks to a bank account is called a:
deposit slip
The bank on which a check is written is called a:
drawee
The person or firm issuing the check is called a:
drawer
Match the following terms with the correct definition:
drawer - the person or firm issuing the check payee - the person or firm to whom a check is payable drawee - drawn the bank on which a check is drawn negotiable - a financial instrument whose ownership can be transfered to another person or business check - a written order instructing a bank to pay a specific sum of money to a designated party
An individual earnings report records:
employee information needed to compute earnings and complete tax reports
Identify internal controls related to cash payments:
enter all cash payment transactions into the accounting records promptly issue checks only for approved bills and invoices
Identify which of the following steps are used to prepare the Income Statement Section of the worksheet:
extend the revenue account balances from the Adjusted Trial Balance to the credit columns of the Income Statement Sections calculate the total of the Debit and Credit columns extend the expense account balances from the Adjusted Trial Balance to the debit columns of the Income Statement Sections
Social security tax is withheld by the employer; the employer periodically sends payment to the ___________ ___________
federal government
When completing a bank reconciliation, adjustments such as deposits in transit, outstanding checks, and bank errors, are adjustments that are listed in the:
first section, or adjustment to the bank statement balance
Identify which of the following are recommended internal control procedures to protect payroll operations:
have the monthly payroll bank account statement received and reconciled by someone other than the person who prepares the payroll checks keep payroll records in locked files use Prenumbered forms for the payroll checks
A person who is not under the direct supervision or control of the company is called an ______.
independent contractor
An employee record that contains information needed to compute earnings and complete tax reports is called a(n):
individual earnings record
Based on employee earnings for the previous year, Jordon Delivery Company paid an estimated premium of $800 for worker's compensation insurance in advance for the new year. The journal entry to record this transaction would require a debit to the _____ account for $800.
prepaid workers' compensation insurance
A signature that transfers a check to a specific party for a stated purpose is called a _______ endorsement.
restrictive
The estimated amount that a long-term asset is worth at the end of its useful life is called _______ value.
salvage
When completing a bank reconciliation, adjustments such as deposits not recorded, bank service fees, and errors in the books, are adjustments that are listed in the:
second section, or adjustments to book balance
Internal controls related to cash payments include:
separate employees should write checks, sign checks, mail checks, and reconcile bank statements
The general journal entry to record payroll expense will include a credit to which of the following accounts:
social security tax payable
Identify which of the following items appear on an income statement:
supplies expense fees income net income
A petty cash voucher is used to record:
the payments made from a petty cash fund
The final calculation in a payroll register is to make sure that
the total regular earnings plus total overtime earnings equals the gross amount
