Need A Tutor?    |   Need Homework Help?                                                                             Help and Support     | Join or Cancel

Mr. Zee worked 48 hours during the week ended January 18, 2019. He is paid $12 per hour, and is paid time-and-a-half
for all hours over 40 in a week.He had $100 withheld from his pay for federal income taxes, and $20 withheld for health insurance.
The combined social security and Medicare tax rate is 7.65%, and the federal and state unemployment tax rates are 0.6% and 3.8%, respectively.All earnings are taxable. What is the total employer payroll tax expense for Mr. Zee's current paycheck?
 
$27.45
$47.74
$75.19
$0
   
his preprinted government form is used to report federal unemployment taxes.
 
Form 940
Form 941
Form 8109
Form W-2
   
Samantha Rodriguez had gross earnings for the pay period ending 10/15/19 of $5,785. Her total gross earnings as of 9/30/19 were $116,700. Social Security taxes are 6.2% on a maximum earnings of $122,700 per year.
The Social Security tax due by her employer from her 10/15/19 paychecks is:
 
$372.00
$61.07
$358.67
$442.55
   
Only the employer is responsible for paying
 
social security and Medicare taxes.
FUTA taxes
social security, Medicare, and FUTA taxes.
federal income taxes.
   
Employers usually record unemployment taxes at the end of each
 
payroll
month.
quarter.
year.
   
George's Gameroom had two employees with the following earnings information:
 
Employee                  Cumulative Earnings as of 11/30/2019            Gross Earnings for Week Ending 12/15/2019
Barbara Brown         $             5,900                                                                    $             1,800                     
Hillary Adams           $             118,300                                                                $             6,000                     
 
Use the table above to calculate how much of Barbara's December 15 paycheck is still subject to
state unemployment tax given that the rate is 4% and federal unemployment tax is 0.6% and both
taxes are levied on only the first $7,000 of each employee's annual earnings.
 
$700
$5,900
$1,800
$1,100
   
Kristy Casey earns $39,000 per year and is paid once a month. For January, she had $188 withheld from her pay for federal income taxes,
and $52 withheld for health insurance. Social Security tax is 6.2% on a maximum of $122,700 of gross wages per year,
and Medicare tax is 1.45%; the federal unemployment tax rate is 0.6% and state unemployment tax rate is 4.2%.
What is the total employer payroll tax expense for Kristy's January paycheck?
 
$385.13
$162.50
$248.63
$404.63
   
ABC Consulting had two employees with the following earnings information:
 
Employee            Cumulative Earning as of 11/30/2019                       Gross Earnings for Week Ending 12/15/2019
Poppy Smith                       $6,600                                                                                 $600                       
Henry Murphy                      $119,700                                                                            $4,000                  
 
Use the table above to calculate the employer payroll income taxes associated with Poppy's December 15 paycheck given the following tax rates:
Social Security tax of 6.2% is levied on the first $122,700 of annual wages and the Medicare tax rate is 1.45% on all earnings.
State unemployment tax of 5.4% and federal unemployment tax of 0.6% are both levied on only the first $7,000 of each employee's annual earnings.
 
$69.90
$45.90
$81.90
$37.20
   
Which of the following payroll taxes is not paid by the employee?
 
federal unemployment tax
federal income tax
state income tax
FICA (Social Security and Medicare)
   
Which of the following forms is submitted with a copy of the Form W-2 for each employee to the Social Security Administration?
 
Form W-3
Form W-4
Form 940
Form 941
   
Generally, the maximum earnings subject to state unemployment taxes is
 
larger than the base for social security.
the same as the base for social security.
smaller than the base for social security
the amount of total earnings
   
Which of the following statements is correct?
 
an employee must attach at least one copy of form w2
Form 941 is often referred to as a withholding statement.
An employee must attach one copy of Form W-2 to his or her personal federal income tax return.
The employer sends one copy of the Form 941 for each employee to the Internal Revenue Service.
An employee must attach one copy of Form W-4 to his or her personal federal income tax return.
   
George's Gameroom had two employees with the following earnings information:
 
Employee              Cumulative Earnings as of 11/30/2019                                    Gross Earnings for Week Ending 12/15/2019
Barbara Brown                 $             5,900                                                                                   $             1,800                     
Hillary Adams                   $             118,300                                                                               $             6,000                     
 
Use the table above and calculate how much of Hillary's December 15 paycheck is still subject to Social Security tax given that the tax is levied on the first $122,700 of annual wages and the Medicare tax rate is 1.45% on all earnings.
 
$2,500
$2,800
$4,400
$6,000
   
The adjusting entry to record estimated losses from uncollectible accounts consists of a:

debit to the Uncollectible Accounts Expense account and a credit to the Accounts Receivable.
debit to the Allowance for Doubtful Accounts account and a credit to the Accounts Receivable account.
debit to the Accounts Receivable account and a credit to the Allowance for Doubtful Accounts account.
debit to the Uncollectible Accounts Expense account and a credit to the Allowance for Doubtful Accounts account.
   
Accounts for:

$1,200.
$1,500.
$1,800.
$3,000.
   
A company uses the allowance method to account for uncollectible accounts receivable.
At year end, the balance in accounts receivable is $120,000 and the balance in the allowance for doubtful accounts
is a debit balance of $300. An aging analysis of accounts receivable estimates uncollectible accounts to be $2,500.
The adjustment to record uncollectible accounts expense will include a:

debit to uncollectible accounts expense for $2,200.
debit to uncollectible accounts expense for $2,500.
debit to uncollectible accounts expense for $2,800.
debit to uncollectible accounts expense for $3,100.
   
A company uses the allowance method. The balance in the allowance account is a credit of $3,600. A $400 account is deemed to be uncollectible and is written off. After the transaction, the balance in the allowance account is a:

debit balance of $3,200.
credit balance of $3,200.
debit balance of $4,000.
credit balance of $4,000.
   
When the allowance method is used, the entry to record the collection of an account that has been previously written off would include a:

debit to the Accounts Receivable account and a credit to the Allowance for Doubtful Accounts account.
debit to the Uncollectible Accounts Expense account and a credit to the Accounts Receivable account.
debit to the Allowance for Doubtful Accounts account and a credit to the Accounts Receivable account.
debit to the Uncollectible Accounts Expense account and a credit to the Allowance for Doubtful Accounts account.
   
The payments of employees' federal income taxes withheld and social security and Medicare taxes are periodically
 
sent directly to the Internal Revenue Service
deposited in a special-purpose bank account, controlled by the company, until year-end when the funds are sent to the U.S. Treasury Department.
sent to the local office of the Internal Revenue Service.
deposited in a government-authorized financial institution
   
Which of the following statements about the payroll register is not correct?

The payroll register supplies all the information to make the journal entry to record the payroll.
The deductions are added to the gross earnings to compute Net Amount, which is the amount paid to each employee.
The hours worked and the pay rate are used to calculate regular pay, the overtime earnings, and gross pay.
The cumulative earnings after this pay period is computed by adding the beginning cumulative earnings and the current period's gross pay.
   
Which of the following are employer payroll taxes:
 
federal and state unemployment tax and federal income tax withheld
federal income tax withheld and social security tax
state unemployment tax and state income tax
FICA (Social Security and Medicare) and federal and state unemployment taxes
   
Jackson Autos has one employee. As of March 30, their employee had already earned $6,300.
For the pay period ending April 15, their employee earned an additional $2,000 of gross wages.
Only the first $7,000 of annual earnings are subject to FUTA of 0.6% and SUTA of 5.4%.
The journal entry to record the employer's unemployment payroll taxes for the period ending April 15, would be:
                                 
Federal Unemployment Tax Payable                         4.20                        
State Unemployment Tax Payable                              37.80                     
Payroll Taxes Expense                                                     42.00
                                                                 
Payroll Taxes Expense                     80.60                     
Federal Unemployment Tax Payable                                                         10.40
State Unemployment Tax Payable                                                              70.20
                                                                 
Payroll Taxes Expense                                    79.80   
Federal Unemployment Tax Payable                                                       42.00
State Unemployment Tax Payable                                                            37.80
                                                                 
Payroll Taxes Expense                     42.00                     
Federal Unemployment Tax Payable                                                         4.20
State Unemployment Tax Payable                                                              37.80
   
Mr. Zee worked 48 hours during the week ended January 18, 2019. He is paid $12 per hour,
and is paid time and a half for all hours over 40 in a week. He had $100 withheld from his pay for federal income taxes,
and $20 withheld for health insurance. The combined social security and Medicare tax rate is 7.65%,
and the federal and state unemployment tax rates are 0.6% and 3.8%, respectively.
All earnings are taxable. What is the net pay for Mr. Zee’s current pay check?
 
$624.00
$456.26
$167.74  
$428.81
   
The frequency of deposits of federal income taxes withheld and social security and Medicare taxes is most dependent on
 
the number of employees on the payroll.
the number of payroll periods a firm has.
the profit reported by the firm.
the amount owed.
   
The employer records the amount of federal income tax withheld from employees as

Income Tax Expense.
Employee Income Tax Payable.
Social Security Tax Expense.
Social Security Tax Payable.
   
The employer records the amount of federal income tax withheld from employees as

Income Tax Expense.
Employee Income Tax Payable.
Social Security Tax Expense.
Social Security Tax Payable.
   
All details related to an employee's earnings, deductions, and net pay throughout the year would be found in

the Wages Expense account in the general ledger.
the general journal.
the payroll register.
the individual earnings record.
   
Which of the following statements is not correct?

Federal law requires that social security, Medicare, and federal income taxes be deducted from the gross pay of most employees.
Medicare taxes are levied in an equal amount on both employers and employees.
Once an employee's year-to-date wages reach a certain amount prescribed by law, social security tax is no longer withheld
The amount of social security tax withheld depends on an employee's gross earnings, marital status, and number of withholding allowances.
   
Which of the following statements is correct?

A company is required to withhold various employee taxes from amounts paid independent contractors.
The accountant who performs the independent audit for a company is an employee of the company.
All employees must be paid at the minimum wage rate set by the Fair Labor Standards Act.
Disability benefits for the worker and the worker's dependents are provided by the Federal Insurance Contributions Act
   
Which of the following statements is correct?

The FUTA tax provides benefits for employees who become unemployed.
The federal unemployment tax rate can be reduced by the rate charged by the state for the state unemployment tax.
The earnings base for the federal and most state unemployment taxes are the same, the first $7,000 of an employee's
earnings for the year.
All of these are correct.
   
The practical considerations recognized as constraining or modifying the application of the accounting principles include
which of the following?

Materiality, cost-benefit test, and conservatism, but not industry practice.
Materiality, cost-benefit test, and industry practice, but not conservatism.
Cost-benefit test, conservatism, and industry practice, but not materiality.
Materiality, cost-benefit test, conservatism, and industry practice.
   
Which of the following statements is correct?

The use of the direct charge-off method of recording losses from uncollectible accounts usually results in the balance in the Accounts Receivable account being overstated.
The direct charge-off method of recording losses from uncollectible accounts is the method required by Federal
income tax laws.
The direct charge-off method of recording losses from uncollectible accounts reflects generally accepted accounting principles.
The direct charge-off method is an application of the matching principle.
   
When the direct charge-off method is used, the entry to record the write off of a customer's account would include a:

debit to the Accounts Receivable account and a credit to the Uncollectible Accounts Expense account.
debit to the Allowance for Doubtful Accounts account and a credit to the Accounts Receivable account.
debit to the Uncollectible Accounts Expense account and a credit to the Allowance for Doubtful Accounts account.
debit to the Uncollectible Accounts Expense account and a credit to the Accounts Receivable account.
   
Which of the following statements is not correct?

The allowance method involves anticipating losses from uncollectible accounts by recognizing an expense for these losses before the actual accounts are written off.
Losses from uncollectible accounts can be estimated by analyzing sales or accounts receivable.
The balance of Uncollectible Accounts Expense account appears among the operating expenses on the income statement.
The adjusting entry to record the estimated loss from uncollectible accounts includes a credit to the
Accounts Receivable account.
   
Employees' payments for federal income taxes withheld and social security and Medicare taxes are periodically:

sent directly to the Internal Revenue Service.
deposited in a special-purpose bank account, controlled by the company, until year-end when the funds are sent to the U.S.
Treasury Department.
sent to the local office of the Internal Revenue Service.
deposited in a government-authorized financial institution.
   
An employee whose regular hourly rate is $10 and whose overtime rate is 1.5 times the regular rate worked 44 hours in one week. In the payroll register, the employer should record an overtime premium of

$440.
$220.
$5.
$20.
   
The rules to combine amounts and complete the Adjusted Trial Balance section of the worksheet include all of the following except:

If the account has a credit balance in the Trial Balance section and a credit entry in the Adjustments section, add the two amounts.
If the account has a credit balance in the Trial Balance section and a debit entry in the Adjustments section, subtract the debit amount.
If the account has a debit balance in the Trial Balance section and a debit entry in the Adjustments section, subtract the two amounts.
If the account has a debit balance in the Trial Balance section and a credit entry in the Adjustments section, subtract the credit amount.
   
Gross profit on sales is calculated by subtracting:

sales returns and allowances from sales.
ending inventory from the total merchandise available for sale.
total expenses from sales.
cost of goods sold from net sales.
   
The cost of goods sold is calculated as follows:

Beginning Merchandise Inventory plus Net Delivered Cost of Purchases less Ending Merchandise Inventory equals cost of Goods Sold.
Total Merchandise Available for Sale less Ending
Merchandise Inventory.
Both A and B.
Neither A or B.
   
An income statement that lists all revenues in one section and all expenses in another section is known as a:

classified income statement.
multiple-step income statement.
single-step income statement.
categorized income statement.
   
The beginning capital balance shown on a statement of owner's equity is $100,000. Net income for the period is $50,000.
The owner withdrew $25,000 cash from the business and made no additional investments during the period.
The owner's capital balance at the end of the period is:

$100,000.
$125,000.
$150,000.
$175,000.
   
The balance of the owner's drawing account is listed:
Multiple Choice

in the Other Expenses section of the income statement.
in the Current Assets section of the balance sheet.
in the Operating Expenses section of the income statement.
on the statement of owner's equity.
   
All of the following are current assets except:

Accounts Receivable.
Prepaid Insurance.
Merchandise Inventory.
Equipment.
   
Which of the following statements is not correct?

All adjustments are shown on the worksheet.
After the financial statements have been prepared, the adjustments are made a permanent part of the accounting records.
Adjustments are recorded in the general journal as adjusting journal entries and are posted to the general ledger.
All of the above statements are correct.
   
All of the following are steps in the closing process except:

Close expense accounts and cost of goods sold accounts with debit balances to the Income Summary account.
Close owner's capital to the Income Summary account.
Close the drawing account to the owner's capital account.
Close revenue accounts and cost of goods sold accounts with credit balances to the Income Summary account.
   
Inventory turnover is calculated by:

dividing average inventory by net sales.
dividing net sales by average inventory.
dividing average inventory by cost of goods sold.
dividing cost of goods sold by average inventory.
   
Which of the following statements is not correct?

Reversing entries are made to reverse the effect of certain adjustments.
Reversing entries provide a way to guard against oversights, eliminate the review of accounting records, and simplify the entry made in the new period.
A reversing entry is the exact opposite (the reverse) of the adjustment.
After the reversing entry is posted for the adjustment made to recognize the salaries expense at the end of the
accounting period, the Salaries Expense account will have a zero balance, and the Salaries Payable account
will have a credit balance.
   
In order to ensure that they are meaningful and useful, financial statements should be prepared:

in accordance with section 108 of the Sarbanes-Oxley Act.
on a daily basis.
on a timely basis.
using generally accepted accounting principles.
   
Which of the following statements is correct?

The Securities and Exchange Commission issues the Statements of Financial Accounting Standards.
Statements issued by the American Institute of Certified Public Accountants are binding.
Generally Accepted Accounting Standards were established by an act of Congress.
An act of law gave the Securities and Exchange Commission the authority to determine the form and content of
accounting reports filed by companies under its jurisdiction.
   
The Securities and Exchange Commission's 2003 report to the Congress on "principles-based" accounting observed that the first characteristic of objectives-based standards, dictated by the Sarbanes-Oxley Act, is that any standard must be based on:


the cost-benefit test.
qualitative characteristics.
transparency.
an improved and consistently applied framework.
   
Investors and creditors expect to receive a cash flow from the business entity:

directly from the distribution of the company's earnings.
indirectly through the disposition of their interests for cash.
Both of the above.
Neither of the above.
   
Accounting information is capable of making a difference in a decision by the report user if it is:

comparable.
reliable.
relevant.
neutral.
   
The Periodicity of Income Assumption:

allows businesses to record property and equipment at their cost.
allows companies to place a value on intangible assets, such as goodwill.
allows companies to assume that business activities can be separated into discrete units of time.
allows companies to assume that the business will continue to operate indefinitely.
   
The assumption that permits preparers of the financial statements to record property and equipment as assets at their cost is the:

periodicity of income assumption.
going concern assumption.
monetary unit assumption.
separate entity assumption.
   
All of the steps listed below are required under the new core principle of recognizing revenue, except:

Identify the contracts and the performance obligations in the contracts.
Determine the contract price.
Allocate the transaction price to the contract's performance obligations.
Recognize revenue when it is earned or realized.
   
Which of the following statements describes the proper matching of revenue and expenses?

Manufacturing costs are identified with specific products and are charged to cost of goods sold when the manufacturing process is complete.
Insurance premiums cover specific periods and are charged to expense when they are paid.
General office salaries are recorded as assets when they are incurred because they benefit future periods.
The cost of a building is recorded as an asset. Depreciation expense is recognized over the periods in which the asset is expected to help earn revenues for the business.
   
Both the employer and the employee are responsible for paying:

social security, Medicare, and FUTA taxes.
FUTA taxes.
SUTA taxes.
social security and Medicare taxes.
   
The frequency of deposits of federal income taxes withheld and social security and Medicare taxes is most dependent on the:

number of payroll periods a firm has.
profit reported by the firm.
number of employees on the payroll
amount of the tax liability.
   
When the direct charge-off method is used and payment is received in a period subsequent to that in which
an account was charged off, the entry would include a:

debit to the Accounts Receivable account and a credit to the Uncollectible Accounts Expense account.
debit to the Accounts Receivable account and a credit to the Uncollectible Accounts Recovered account.
debit to the Uncollectible Accounts Expense account and a credit to the Allowance for Doubtful Accounts account.
debit to the Accounts Receivable account and a credit to the Uncollectible Accounts Recovered account.
   
The entry to record a deposit of federal income taxes withheld and social security and Medicare taxes owed would include a:

debit to an expense account and credit to one or more liability accounts.
debit to an asset account and credit to an expense account.
debit to one or more expense accounts and credit to one or more liability accounts.
debit to one or more liability accounts and credit to an asset account.
  Form 941 is filed:

weekly.
monthly.
annually.
quarterly.
   
The Employer's Quarterly Federal Tax Return includes a calculation of the firm's liability for the quarter for:

federal income taxes withheld, social security and Medicare taxes, and FUTA taxes.
federal income taxes withheld and social security and Medicare taxes.
social security and Medicare taxes and FUTA taxes.
federal and state income taxes withheld.
   
Each employee of a firm will receive several copies of the Wage and Tax Statement, Form W-2, from the:

employer with each paycheck.
Federal government once a year.
employer once a quarter.
employer once a year.
   
Common internal controls for accounts receivable include all the following except:

authorizing all credit sales.
aging the accounts receivable if the aging the accounts receivable method is used to record the estimated
expense from uncollectible accounts receivable.
approving the write-off of accounts by authorized individuals only, and making the approvals in writing.
investigating and taking appropriate action on past due accounts.
   
Which of the following forms is submitted by the employer with a copy of the Form W-2 for each employee to the
Social Security Administration?

Form W-3.
Form W-4.
Form 940.
Form 941.
   
Which of the following statements is not correct?

The federal government allows a credit in the federal unemployment tax for amounts charged by the state for unemployment taxes.
The earnings limits for the federal and the state unemployment tax are usually the same, $7,000.
Under the experience rating system, the state tax rate may be reduced.
The normal federal unemployment tax rate of 0.6% (or 6.0% less the state unemployment tax credit of 5.4%) changes
 if favorable experience ratings change the state unemployment tax rate
   
A cash sale of merchandise would be recorded in the

sales journal.
general journal.
cash receipts journal.
cash payments journal.
   
All of the following are internal control procedures that are recommended to protect payroll operations except:

make voluntary deductions from employee earnings based only on a signed authorization from the employee.
keep payroll records in locked files.
retain all Forms W-4.
assign new employees to work in payroll operations.
   
The entry to place the ending inventory on the books would include a:


debit to the Merchandise Inventory account and a credit to the Income Summary account.
debit to the Income Summary account and a credit to the Merchandise Inventory account.
debit to the Merchandise Inventory account and a credit to the Cost of Goods Sold account.
None of the above.
   
Upon collection of the amount due on an interest-bearing promissory note from a customer, the accountant would debit Cash,
credit Notes Receivable, and

debit Interest Expense.
credit Interest Income.
credit Interest Expense.
debit Interest Income.
   
Allowance for Doubtful Accounts is:

deducted from Sales in the Revenue section of the income statement.
listed in the Liabilities section of the balance sheet.
listed in the Operating Expenses section of the income statement.
subtracted from Accounts Receivable in the Assets section of the balance sheet.
   
Accrued expenses are:

used in one period but not paid for or recorded until a later period.
paid for, recorded, and used in one period.
paid for and recorded in one period but not fully used until a later period.
budgeted but not paid for or used during the period
   
On July 1, 2016, a firm purchased equipment for $7,200. Depreciation expense for the year ended December 31, 2016, given the straight-line method, a 5-year useful life, and a salvage value of $600, is:

$1,440.
$1,320.
$720.
$660
   
Most businesses use the petty cash fund to pay for

accounts payable.
small expenditures.
office lunches.
internal expenses.
   
With the accrual basis of accounting, it is appropriate to recognize revenue from a credit sale:

on the date the account is collected in full.
each time a payment on an account balance is received. Incorrect
on the date of the sale.
either on the date of the sale or when the amount of the sale is collected.
   
The adjusting entry to record accrued interest on a note payable would include a:

debit to the Interest Income account and a credit to the Notes Payable account.
debit to the Interest Payable account and a credit to the Interest Expense account.
debit to the Interest Expense account and a credit to the Cash account.
debit to the Interest Expense account and a credit to the Interest Payable account.
   
On May 1, 2016, a firm purchased a 1-year insurance policy for $3,600 and paid the full premium in advance.
The insurance expense associated with this policy for 2016 is:

$3,600.
$2,400.
$2,100.
$1,200.
$2,400.
   
On October 1, 2016, Fairbanks Company accepted from a customer a four-month, 15 percent note for $1,000. As of December 31, 2016, the adjusting entry to record the accrued interest on the note receivable would include a debit to Interest Receivable for:

$333.33.
$1,000.
$1,250.
37.50.
   
A publishing company publishes a monthly magazine. At the end of the year, the Unearned Subscription Income account had a balance of $150,000. During the year, $100,000 of magazines were delivered and income was earned. After the adjusting entry to recognize income is recorded, the Unearned Subscription Income account will have a:

debit balance of $50,000.
credit balance of $50,000.
debit balance of $100,000.
credit balance of $250,000.
   
Which of the following is a factor in the determination of the amount of social security tax to withhold from an employee's pay?

hours worked during the pay period
withholding allowances claimed on Form W-4
marital status
gross wages
   
Which of the following statements is not correct?
 
A few states levy an unemployment tax on the employee that must be withheld from the employee's pay.
One of the purposes of the unemployment insurance program is to stabilize employment and reduce unemployment.
The reduction of state unemployment taxes because of favorable experience ratings reduces the credit allowable against the federal unemployment tax
The unemployment insurance program is a federal program
   
Which of the following statements is correct?

The entry to record the payment of an invoice within the cash discount period would include a debit to the Purchases Discounts account.
The entry to record a cash purchase of merchandise would include a debit to Purchases and a credit to Cash.
A transaction that is properly recorded in the cash payments journal will always include the recording of an amount in the Cash Debit column.
Purchase discounts is a contra revenue account.
   
Which of the following is not an employer payroll tax:
 
federal unemployment tax
federal income tax
state unemployment tax
FICA (Social Security and Medicare
   
The amount of federal income tax to withhold from an employee's earnings depends on the

earnings during the pay period and length of the pay period.
earnings during the pay period and length of the pay period, and marital status.
earnings during the pay period and length of the pay period, and number of withholding allowances.
earnings during the pay period and length of the pay period, marital status, and number of withholding allowances.
   
Which of the following statements is not correct?

The Medicare tax is levied on both the employee and the employer.
To compute the Medicare tax to withhold from the employee's paycheck, multiply the net take-home wages by the
Medicare tax rate of 1.45%.
If an employee works for more than one employer during the year, the FICA tax is deducted and matched by each employer.
All of these statements are correct.
   
The payment of a purchase invoice when a cash discount is taken includes a

debit to Accounts Payable, debit to Purchases Discounts, and credit to Cash.
debit to Accounts Payable and credit to Cash.
debit to Purchases, credit to Purchases Discounts, and credit to Cash.
debit to Accounts Payable, a credit to Purchases Discounts, and a credit to Cash.
   
At the end of the month, after the equality of the debits and credits recorded in the cash payments journal is proved by comparing the column totals, the summary posting from the cash payments journal would include a


debit to Accounts Payable, a credit to Purchase Discount and a credit to Cash. In addition, amounts in the
"Other Accounts Debit Amount column" would also be posted as debits to those accounts.
   
The entry to replenish a petty cash fund includes a


debits to various expense accounts and a credit to Cash.
   
A check issued for $890 to pay a vendor on account was recorded in the firm's records as $980; the canceled check was properly
listed on the bank statement at $890. To arrive at an accurate balance on a bank reconciliation statement, the error should be


added to the book balance.
   
A firm's bank reconciliation shows, in part, a book balance of $15,820, a deposit in transit of $300, an NSF check of $400,
outstanding checks totaling $10,000, and a service charge of $20. Its adjusted book balance is


$15,400.
   
If a check written by a firm is not canceled by the bank and returned with the month's bank statement, the firm should


consider this check as outstanding when preparing the bank reconciliation.
   
The entry to record a purchase of merchandise on credit includes


a debit to Purchases and a credit to Accounts Payable.
   
Which of the following statements is correct?


The credit terms, 2/10, n/30, allow the customer to take a 2 percent discount if payment is made within 10 days.
   
The Purchases account is a


temporary account.
   
Purchases of merchandise on credit should be recorded in


the purchases journal.
   
Credit terms of 1/10, n/30 means that


if the invoice is paid within 10 days of its date, a 1% discount may be taken;
otherwise the total amount is due in 30 days.
   
Detailed information about the individual accounts for all creditors is provided by


an accounts payable ledger.
   
If special journals are in use, purchase returns to and allowances granted by suppliers may be entered in the


general journal.
   
When a sales tax return is prepared, the amount of a firm's taxable gross sales for the month are computed as


Cash sales plus Credit sales less Sales returns and allowances.
   
One purpose of closing entries is to


transfer the results of operations to owner's equity.
   
The schedule of accounts payable is prepared from the


accounts payable subsidiary ledger.
   
The net delivered cost for purchases is calculated as follows:


Purchases plus Freight In less Purchases Returns and Allowances.
   
Which of the following is an objective of internal control of purchases?


To create written proof that purchases and payments are authorized.
   
A firm that sells goods that it purchases for re-sale is a


merchandising business.
   
At the end of the month, after the equality of the debits and credits recorded in the sales journal is proved by comparing
the column totals, the summary posting from the sales journal would include a


debit to Accounts Receivable, a credit to Sales Tax Payable, and a credit to Sales.
   
Detailed information about the transactions with credit customers and the balances owed by such customers is provided by


an accounts receivable ledger.
   
Which of the following accounts would be closed?


Supplies Expense
   
The entry to close the Income Summary account may include


a debit to Income Summary and a credit to the owner's capital account.
   
If special journals are in use, sales returns and allowances from credit customers may be entered in the


general journal.
   
After all postings have been made, the total of the schedule of accounts receivable should equal


the balance of the Accounts Receivable account in the general ledger.
   
The schedule of accounts receivable is prepared from the


accounts receivable subsidiary ledger.
   
When a sales tax return is prepared, the amount of a firm's taxable gross sales for the month are computed as


Cash sales plus Credit sales less Sales returns and allowances.
   
One purpose of closing entries is to


transfer the results of operations to owner's equity.
   
Suppose the list price of goods is $1,000 and the trade discount is 20 percent. What is the amount of the discount and what
is the net price to be recorded in the sales journal?


$200; $800
   
Merchandise is sold on credit for $500 plus 6 percent sales tax. The entry in the general journal will include a debit to Accounts Receivable for

$530.00.


0.6 x 500 = 30
500 + 30 = 530