Question 1

A source document prepared by the seller that lists the items shipped, their cost, and the method of shipment is commonly referred to by the seller as the

Accepted Answer

sales invoice.

Question 2

Form 941 is a(n)

Accepted Answer

Employer\'s Quarterly Federal Tax Return.

Question 3

(Appendix) A purchase was made for $200 on account with credit terms of 2/10, n/30. The purchase was recorded using the net-price method. If payment is made 25 days later, the entry to record the payment will be to

Accepted Answer

debit Accounts Payable for $196, debit Purchases Discounts Lost for $4, and credit Cash for $200.

Question 4

When a single-check for payroll is prepared and deposited into a special payroll bank account, which of the following entries is made to record the deposit?

Accepted Answer

debit Wages and Salaries Expense; credit Cash   Hide Feedback

Question 5

A schedule of accounts receivable is prepared to

Accepted Answer

verify that the sum of the accounts receivable ledger balances equals the Accounts Receivable balance.

Question 6

Employers usually prepare which of the following types of payroll records?

Accepted Answer

payroll register, employee earnings record, and payroll check

Question 7

The payroll register for the week ended February 14 for Luxury Homes Construction Company indicates gross earnings of $4,000 and total deductions of $1,200. The entry for the Wages and Salaries Expense ending February 14 would be a

Accepted Answer

$4,000 debit.

Question 8

The act that requires most employers to withhold certain amounts from employees\' earnings for contributions to the Social Security and Medicare programs is called the

Accepted Answer

Federal Insurance Contributions Act.

Question 9

Copies of a sales invoice are used to do all of the following EXCEPT

Accepted Answer

record the sale.

Question 10

Melissa Taylor has gross earnings of $425 and withholdings of $26.35 for Social Security tax, $6.16 for Medicare tax, and $35 for federal income tax. Her employer pays $26.35 for Social Security tax, $6.16 for Medicare tax, $3 for FUTA tax, and $9 for SUTA tax. The total cost of Melissa to her employer is

Accepted Answer

$469.51.

Question 11

The employer usually pays the entire cost of

Accepted Answer

Workers\' Compensation Insurance.

Question 12

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

Accepted Answer

W-4

Question 13

An amount of an employee\'s gross pay which is exempt from federal income tax withholding is a(n)

Accepted Answer

withholding allowance.

Question 14

An independent contractor performs a service for a fee and does not work under the control and direction of the company paying for the service.

Accepted Answer

True

Question 15

A self-employment tax is required of an individual who owns his or her own business and makes

Accepted Answer

$400 or more

Question 16

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

Accepted Answer

$110,500.

Question 17

If the seller permits merchandise to be returned or an allowance to be made, it is customary for the seller to issue a(n)

Accepted Answer

credit memorandum.

Question 18

The employer pays which of the following to the Internal Revenue Service?

Accepted Answer

the employer\'s Social Security and Medicare taxes

Question 19

The federal unemployment tax is levied on

Accepted Answer

employers and is deducted from employees\' earnings.

Question 20

The needs of management and the requirements of various federal and state laws make it necessary for employers to keep records that will provide all of the following information for each employee EXCEPT

Accepted Answer

number of hours the employee works as a volunteer for the community.

Question 21

A discount offered as an inducement for prompt payment of an invoice is called a(n)

Accepted Answer

cash discount.

Question 22

After estimating its payroll for the year, an employer usually pays workers\' compensation insurance

Accepted Answer

at the beginning of the year.

Question 23

To journalize the payment of Social Security taxes to the IRS, the correct entry would be

Accepted Answer

debit Social Security Tax Payable and credit Cash.

Question 24

The account that is debited for the total amount of the gross earnings of all employees for each pay period is

Accepted Answer

Wages and Salaries Expense.

Question 25

A key source of information for computing employer payroll taxes is the

Accepted Answer

payroll register.

Question 26

(Appendix) When the net-price method of recording purchases is used, the debit to Purchases is for the

Accepted Answer

amount of the invoice less available cash discounts.

Question 27

Which of the following accounts is NOT used to account for merchandise sales transactions?

Accepted Answer

Accounts Payable

Question 28

FICA taxes include amounts for both Social Security and Medicare programs.

Accepted Answer

True

Question 29

According to the assumption used in this text, employers are required to withhold Social Security taxes on the first ____ of each employee\'s earnings.

Accepted Answer

$110,100

Question 30

A self-employment tax is a contribution to the

Accepted Answer

Social Security and Medicare programs.

Question 31

The cost of merchandise purchased during the period less any discounts granted by suppliers and amounts returned to suppliers and amounts of any allowances made by suppliers is called

Accepted Answer

Net purchases

Question 32

An invoice of $237.50 dated April 2 is subject to credit terms of 2/10, n/30. The amount to be paid if the invoice is paid on or before April 12 is

Accepted Answer

$232.75.

Question 33

Compensation expressed in terms of hours, weeks, or units produced for skilled or unskilled labor is usually referred to as salary.

Accepted Answer

False

Question 34

Which of the following indicates that a shipment is free on board at the destination of the shipment and the seller will pay the transportation costs?

Accepted Answer

FOB destination

Question 35

A written order by a buyer for merchandise or other property specified in a purchase requisition is known as a

Accepted Answer

purchase order

Question 36

Employers may deposit Social Security and Medicare taxes at a Federal Reserve Bank or other authorized commercial bank using

Accepted Answer

Form-8109

Question 37

Merchandise is sold on account for $90, and the sale is subject to a retail sales tax of $5.40. The sales account should be credited for

Accepted Answer

$84.60.

Question 38

A schedule of accounts receivable is normally prepared

Accepted Answer

daily

Question 39

Examples of employees include all of the following EXCEPT

Accepted Answer

public accountants.

Question 40

Merchandise inventory available at the beginning of the period plus cost of goods purchased minus merchandise inventory at the end of the period equals

Accepted Answer

cost of goods sold

Question 41

A list showing the amount due from each customer as of a specified date is known as a

Accepted Answer

work sheet.

Question 42

After the posting of the accounts payable ledger is completed, the total of the accounts payable ledger balances should equal the balance of which of the following general ledger accounts?

Accepted Answer

accounts payable

Question 43

The source document of a sales transaction is called a

Accepted Answer

sales ticket

Question 44

The account that should be credited for the total income tax withheld from employee\'s earnings is

Accepted Answer

Employee Income Tax Expense.

Question 45

Assume the gross amount of an invoice is $100 and a discount of 20% is allowed. The amount of the trade discount totals

Accepted Answer

$20

Question 46

An Employer Identification Number (EIN) is obtained by the employer from the

Accepted Answer

Internal Revenue Service.

Question 47

An employee\'s total earnings is referred to as net pay.

Accepted Answer

false

Question 48

Employers who have less than $2,500 due in federal income tax withholding and Social Security and Medicare taxes at the end of the quarter should journalize the debt and pay at the end of the

Accepted Answer

year

Question 49

Compensation normally expressed in biweekly, monthly, or annual terms for managerial or administrative services is called

Accepted Answer

salary

Question 50

Special discounts from list prices, granted by manufacturers to different classes of customers, are known as

Accepted Answer

manufacturers\' discount.

Question 51

Which of the following is a payroll tax normally paid by both the employee and the employer?

Accepted Answer

FICA tax

Question 52

Merchandise is sold on account for $90, and the sale is subject to a retail sales tax of $5.40. The amount that should be added to Accounts Receivable would be

Accepted Answer

$95.40

Question 53

Assume the gross amount of an invoice is $100 and a discount of 20% is allowed. The net amount is

Accepted Answer

$80

Question 54

A form used to request the responsible person or department to purchase merchandise or other property is known as a

Accepted Answer

purchase requisition.

Question 55

A business that purchases clothing, furniture, computers, or other products to sell to customers is a

Accepted Answer

not-for-profit business.

Question 56

The date on which an employer must pay Social Security and Medicare taxes is

Accepted Answer

dependent on the amount of the taxes.

Question 57

The payroll register for the week ended April 15 for Ultimate Tanning Spa indicates gross earnings of $4,000 and total deductions of $1,200. The journal entry for the payroll for this week would include which of the following credit amounts to Cash?

Accepted Answer

$2,800

Question 58

A summary accounts receivable account is called a(n)

Accepted Answer

controlling account

Question 59

The account that is credited with amounts withheld from an employee\'s earnings for any pension plan contribution is

Accepted Answer

Pension Plan Taxes Payable.

Question 60

Joel Trump is paid one and one-half times the regular hourly rate for all hours worked in excess of 40 hours per week and double time for work on Sunday. Trump\'s regular rate is $8 per hour. During the week ended October 10, he worked 9 hours each day from Monday through Friday, 6 hours on Saturday, and 4 hours on Sunday. Trump\'s total earnings for the week ended October 10 are

Accepted Answer

$516

Question 61

A credit memorandum for $156 (sale price of merchandise $150; sales tax of $6) was issued to a customer for goods returned that had been purchased on account. To enter this transaction properly,

Accepted Answer

Sales would not be debited

Question 62

Jillian Diaz receives a regular salary of $1,500 a month and is entitled to overtime pay at the rate of one and one-half times the regular hourly rate for any time worked in excess of 40 hours per week. Diaz\'s overtime pay rate is

Accepted Answer

$12.98

Question 63

The payroll register for the week ended May 28 for J & D United indicates gross earnings of $4,000 and total deductions of $1,200. The total of all the credit entries for the payroll for the week ending May 28 would be

Accepted Answer

$,4000

Question 64

Which of the following indicates that the shipment is free on board at the point of origin of shipment and the buyer must pay all transportation costs?

Accepted Answer

4/10, EOM

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