Reference no: EM132831057
Question - SELECT THE BEST ANSWER (Shows computations are required) A. due, but not receivable for more than one year
Q1. Current liabilities are:
A. due, but not payable for more than one year
B. due and receivable within one year
C. due and payable within one year
2. On June 8, Alton Co. issued an $80,000, 6%, 120-day note payable to Seller Co. What is the due date of the note?
A. October 8
B. October 7
C. October 6
D. October 5
Q3. The journal entry a company uses to record the issuance of a note for converting an existing account payable would be
A. debit Cash; credit Accounts Payable
B. debit Accounts, Payable; credit Cash
C. debit Cash; credit Notes Payable
D. debit Accounts Payable; credit Notes Payable
Q4. The journal entry a company uses to record the issuance of an interest-bearing note for borrowing funds for the business is
A. debit Accounts Payable; credit Notes Payable
B. debit Cash; credit Notes Payable
C. debit Notes Payable; credit Cash
D. debit Cash and Interest Expense; credit Notes Payable
Q5. A current liability is a debt that can reasonably expected to be paid
A. between 6 months and 18 months.
B. out of currently recognized revenues.
C. within one year.
D. out of cash currently on hand.
Q6. On July 8, Alton Co. issued an $80,000, 6%, 120-day note payable to Seller Co. Assume that the fiscal year of Alton Co. ends July 31. Using the 360-day year in your calculations, what is the amount of interest expense recognized by Alton in the current year?
A. $106.67
B. $306.67
C. $400.00
D. $1,200.00
Q7. A business borrowed $40,000 on March 1 of the current year by signing a 30-day, 9% interest bearing note. When the note is paid on March 31, the entry to record the payment should include a
A. debit to Interest Payable $300
B. debit to Interest Expense $300
C. credit to Cash for $40,000
D. credit to Cash for $43,600
Q8. Grayson Bank agrees to lend the Trust Company $100,000 on January 1. Trust Company signs a $100,000, 8%, 9-month note. The entry made by Trust Company on January 1 to record the proceeds and issuance of the note is:
A. Interest Expense 8,000
Cash 92,000
Notes Payable 100,000
B. Cash 100,000
Notes Payable 100,000
C. Cash 108,000
Interest Expense 8,000
Notes Payable 108,000
D. Notes Payable 100,000
Interest Payable 6,000
Cash 100,000
Interest Expense 6,000
TRUE/FALSE (Shows references are required)
Q9. Receiving payment prior to delivering goods or services causes a current liability to incur.
Q10. For a current liability to exist, the following two tests must met. The liability must due usually within a year and must paid out of current assets.
Q11. All long-term liabilities eventually become current liabilities.
Q12. Notes payable may issue to creditors to satisfy accounts payable created earlier.
Q13. The borrower is the one who issues a note payable to a creditor.
Q14. Interest expense is reported in the operating expense section of the income statement.
Q15. A loan in which the lender deducts interest from the amount borrowed before the money is advanced to the borrower is called an interest-bearing note.
SELECT THE BEST ANSWER (Shows computations and references are required)
Q1. An employee receives an hourly rate of $40, with time and a half for all hours worked in excess of 40 during a week. Payroll data for the current week are as follows: hours worked, 46; federal income tax withheld, $350; social security tax rate, 6.2% on maximum of $130,000; and Medicare tax rate, 1.45% on all earnings. What is the gross pay for the employee?
A. $ 775.00
B. $1,840.00
C. $1,562.60
D. $1,960.00
Q2. An employee receives an hourly rate of $25, with time and a half for all hours worked in excess of 40 during a week. Payroll data for the current week are as follows: hours worked 46 federal income tax withheld, $350; social security tax rate, 6.2% on maximum of $120,000; and Medicare tax rate, 1.45% on all earnings. What is the net amount (rounded) to be paid the employee?
A. $781
B. $875
C. $1,127
D. $1,225.00
Q3. The total earnings of an employee for a payroll period is referred to as
A. take-home pay
B. pay net of taxes
C. net pay
D. gross pay
Q4. The following totals for the month of June taken from the payroll register of Arcon Company:
A. Salaries expense $14,000
B. Social security and Medicare Taxes withheld 975
C. Income Taxes withheld 2,600
D. Retirement Savings 1,000
Q5. The entry to record the payment of net pay would include a
A. Debit to Salaries Payable for $14,000
B. Debit to Salaries Payable for $9,425
C. Credit to Salaries Expense for $9,425
D. Credit to Salaries Payable for $9,425
Use the following key to match the payroll item with its characteristics.
A. Amount is limited, withheld from employee only
B. Amount is limited, withheld from employee and matched by employer
C. Amount is limited, paid by employer only
D. Amount is not limited, withheld from employee only
E. Amount is not limited, withheld from employee and matched by employer
F. Amount is not limited, paid by employer only
Q5. ____Federal Income Tax
Q6. ____FICA - Social Security
Q7. ____FICA - Medicare
Q8. ____Federal Unemployment Compensation Tax (FUTA)
Q9. ____State Unemployment Compensation Tax (SUTA)
TRUE OR FALSE (Shows references are required)
Q1. Form W-4 is a form authorizing employers to withhold a portion of employee earnings for payment of an employee's federal income taxes and/or state income taxes.
Q2. Form W-2 is called the Wage and Tax Statement.
Q3. For paying their payroll, most employers use payroll checks drawn on a special bank account.
Q4. The payroll register is a multicolumn form used to assemble the data related for all employees.
Q5. The total net pay for a period is determined from the payroll register.
SELECT THE BEST ANSWER (Shows references are required)
Q6. Payroll entries are made with data from the
A. wage and tax statement
B. employee's earning record
C. employer's quarterly federal tax return
D. payroll register
Q7. Which of the following forms is typically given to employees at the end of the calendar year so that employees can file their individual income tax forms?
A. Employment Withholding Allowance Certificate (W-4)
B. Wage and Tax Statement (Form W-2)
C. Employer's Quarterly Federal Tax Return (Form 941)
D. 401k plans
Q8. The detailed record indicating the data for each employee for each payroll period and the cumulative total earnings for each employee is called the
A. payroll register
B. payroll check
C. employee's earnings record
D. employer's earnings record
SELECT THE BEST ANSWER (Shows computations and references are required)
Q1. The journal entry a company uses to record accrued vacation privileges for its employees at the end of the year is
A. debit Vacation Pay Expense; credit Vacation Pay Payable
B. debit Vacation Pay Payable; credit Vacation Pay Expense
C. debit Salary Expense; credit Cash
D. debit Salary Expense; credit Salaries Payable
USE THE FOLLOWING INFORMATION TO ANSWER THE FOLLOWING QUESTIONS.
The following totals for the month of April were taken from the payroll register of Magnum Company.
Salaries $12,000
FICA taxes withheld 550
Income taxes withheld 2,500
Medical insurance deductions 450
Federal Unemployment Taxes 32
State Unemployment Taxes 216
Q2. The journal entry to record the monthly payroll on April 30 would include a
A. credit to Salaries Payable for $8,500
B. debit to Salaries Expense for $8,252
C. debit to Salaries Payable for $8,500
D. debit to Salaries Payable for $8,252
Q3. The entry to record accrual of employer's payroll taxes would include a
A. debit to Payroll Tax Expense for $248
B. credit to FICA Taxes Payable for $1,100
C. credit to Payroll Tax Expense for $248
D. debit to Payroll Tax Expense for $798
Q4. Assuming no employees are subject to ceilings for their earnings, Moore Company has the following information for the pay period of December 15 - 31, 2020.
Gross payroll $18,000
Social security rate 6%
Medicare rate 1.5%
Federal income tax withheld $4,000
Federal unemployment tax rate 0 .8%
State unemployment tax rate 5.4%
Salaries Payable would be recorded for a.
A. $11,534
B. $12,650
C. $12,950
D. $18,000