question

What kinds of transactions are recorded in a purchases journal?

answer

Purchases of merchandise on account

question

For what are special amount columns in a journal used?

answer

Frequently occurring transactions

question

Why are their two account titles in the amount column of the purchases journal?

answer

Because the same two accounts are always affected by purchases on account transactions

question

What is the advantage of having special amount columns in a journal?

answer

Time is saved because using special amounts columns eliminates writing an account title in the Account Title column.

question

What is recorded in the general amounts columns of the cash payments journal?

answer

Cash payment transactions that do not occur often

question

What is the difference between purchasing merchandise and buying supplies?

answer

A business purchases merchandise to sell but buys supplies for use in the business. Supplies are not intended for sale.

question

When cash is paid on account, what is the effect on the cash account?

answer

Cash is decreased by a credit.

question

When journalizing a cash payment to replenish petty cash, what is entered in the Account title column of cash payments journal?

answer

The titles of the accounts for which the petty cash fund was used.

question

Why are withdrawals by partner not recorded as debits directly to the partners' capital accounts?

answer

Withdrawals are normally recorded in separate accounts so that the total amounts are easily determined for each accounting period.

question

List the five steps for ruling a cash payments journal at the end of the month.

answer

1. rule a single line cross all amount columns. 2. Write the date in the Date column. 3. Write totals in the account title column. 4. Write each column total below the single line. 5. rule a double line across all amount columns.

question

What journal is used to record transactions that cannot be recorded in special journals?

answer

General Journal

question

Why is a memorandum used as the source document when supplies are bought on account?

answer

To note that the invoice is for store supplies and not for purchases, ensuring that no mistake is made

question

Why are two account titles written for the credit amount when supplies are bought on account?

answer

Because the single credit amount is posted to two accounts.

question

When is the equality of debits and credits proved for a general journal?

answer

After each general journal entry is recorded.

question

Why is the cash payments journal not used when a partner withdraws merchandise for personal use?

answer

The withdrawal is of merchandise and not cash.

question

How does a merchandising business differ from a service business?

answer

A merchandising business sells merchandise; a service business sells service.

question

How are sales tax rates usually stated?

answer

As a percentage of sales.

question

Why is sales tax collected considered a liability?

answer

The amount of sales tax collected is a business liability until paid to the government.

question

What is the title of a general ledger account used to summarize the total amount due from all charge customers?

answer

Accounts Receivable

question

What accounts are increased and decreased when cash is received on account?

answer

Cash is debited, Accounts receivable is credited.

question

What is written in the cash receipts journal's Account Title column for a cash and credit card sales transaction?

answer

A check mark

question

Describe how to prove cash

answer

Cash on hand at the beginning of the month, plus total cash received during the month, less total cash paid during the month, equals cash balance on hand at the end of the month. Cash is proved if the balance on the next unused check stub is the same as the cash proof.

question

What accounts are contained in an accounts payable ledger?

answer

Accounts for vendors from whom items are purchased or bought on account.

question

What is the relationship between a controlling account and a subsidiary ledger?

answer

The balance of a controlling account equals the total of all account balances in its related subsidiary ledger.

question

What is the title of the balance amount column of an accounts payable ledger form?

answer

credit balance

question

In which column of the cash payments journal are the amounts that are posted individually to the accounts payable ledger?

answer

Customer accounts

question

What accounts are listed on a schedule of accounts payable?

answer

The customer accounts listed in the Account Debited column.

question

What accounts are contained in an accounts receivable ledger?

answer

Accounts receivable credit column

question

To which accounts are the separate amounts in the sales journal posted individually?

answer

All customer accounts that have balances

question

Which amounts in a general journal are posted individually?

answer

Amounts in the Debit and Credit Columns

question

List the five steps for posted to a general ledger account.

answer

1. Write the date in the Date column of the account. 2. Write the journal page number in the post reference column of the account. 3. Write the amount in the Debit or Credit column of the account. 4. Calculate and write the new account balance in the balance debit or balance credit column of the account. 5. Write the general ledger account number in the Post Reference column of the general journal.

question

For which columns of a special journal are the column totals posted to the general ledger?

answer

Each special amount column.

question

In what order should special journals be posted to the general ledger?

answer

1. Sales journal, 2. Purchases journal, 3. General journal, 4. Cash receipts journal, 5. cash payments journal.

question

What is a payroll?

answer

The total amount earned by all employees for a pay period.

question

How many hours were worked by an employee who arrived at 8:29 and departed at 12:02?

answer

3.5 hours

question

How does Omni calculate overtime earnings?

answer

overtime earnings x the overtime rate

question

What are the total earnings of an employee who worked 40 hours and earned $11.00 per hour?

answer

$440.00

question

Where does an employer get the information used to determine the amount of federal income tax to withhold from employees' earnings?

answer

Form W-4, Employee's Withholding Allowance Certificate

question

Employee federal income tax withholdings are based on what two factors?

answer

Employee marital status and number of withholding allowances.

question

Does the employer or employee pay social security tax and medicare tax?

answer

Both the employee and the employer.

question

What does the payroll register summarize?

answer

The payroll register summarizes the payroll for one pay period and shows total earnings, payroll withholdings, and net pay of all employees.

question

How is net pay calculated?

answer

By subtracting total deductions from total earnings.

question

Why do companies complete employee earnings records?

answer

Because a business must send a quarterly report to federal and state governments showing employee taxable earnings and taxes withheld from employee earnings.

question

Omni Import have a separate checking account for payroll checks?

answer

To help protect and control payroll payments

question

What is the source of the information that is recorded on each employee's payroll check stub?

answer

The payroll register

question

How do payroll procedures differ for an employee who requests that her pay be deposited through electronic funds transfer.

answer

Individual checks are not written and do not have to be distributed.

question

What account title is used to journalize the Total Earnings column of the payroll register?

answer

Salary expense

question

What account title is used to journalize the Federal Income Tax column of the payroll register?

answer

Employee Income Tax Payable

question

What account title is used to journalize the Social Security column of the payroll register?

answer

Social security tax payable

question

What account title is used to journalize the Medicare Tax column of the payroll register?

answer

medicare tax payable

question

What is the rate Omni Import must pay on employees for each of the following taxes: social security, Medicare, federal unemployment and state unemployment?

answer

social security: 6.5% of earnings up to a maximum of $65,400.00 in each calendar year; medicare: 1.5% of total employee earnings; federal unemployment: 0.8% of the first $7,000.00 earned by each employee; state unemployment: 5.4% on the first $7,000.00 earned by each employee

question

What is the amount of each employee's earnings that is subject to federal and state unemployment taxes at Omni Import?

answer

The first $7,000

question

When must employers furnish a W-2 statement to their employees?

answer

By January 31

question

What taxes are included int he quarterly federal tax return filed by the employer?

answer

federal income tax, social security tax, and medicare tax

question

For a monthly schedule depositer, wen are payroll taxes paid to the federal government?

answer

By the 15th day of the following month

question

What two different uses for Form 8109?

answer

For the paying payroll taxes and for paying federal unemployment tax.

question

In what order should general ledger accounts be listed on a work sheet?

answer

In the same order they appear in the general ledger

question

What accounts are used for the adjustment for merchandise inventory?

answer

Merchandise inventory and income summary

question

What accounts are used for the adjustment to office supplies?

answer

Supplies - office and supplies expense - office

question

What accounts are used for the adjustment to prepaid insurance?

answer

Prepaid insurance and insurance expense

question

In what column is the Income Summary amount extended?

answer

Income statement Debit or Credit column

question

When does a net loss appear on a worksheet?

answer

When the income statement debit column total (costs and expenses) is larder than the credit column total (revenue)

question

To which Balance sheet column is a net loss amount extended?

answer

Balance sheet debit.

question

What extra step is required when a 10-column work sheet is prepared instead of an 8-column work sheet?

answer

Trial balance amounts after adjustments are extended to the Adjusted Trial balance columns, and the adjusted trial balance columns are proved before extending amounts to the income statement and balance sheet columns.

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