Question

1)

Which of the following taxes would be deducted in determining an employee's net pay?

           a. Federal Income Taxes

           b. Medicare Taxes

           c. Social Security Taxes

           d. all of the above

2_

If beginning owner’s equity was $65,000, ending owner’s equity is $43,000, and the owner's withdrawals were $16,000, the amount of net income or net loss was:

          a.net income of $37,000

          b. net income of $8,000

            c. net loss of $22,000

            d.net loss of $6,000

3_

    The Cash Payments Journal will generally:

    

         a. Debit Accounts Payable and Credit Expenses

         b. Debit Accounts Payable and Credit Equity

         c. Debit Cash and Credit Accounts Payable

         d. Debit Accounts Payable and Credit Cash

Answer 1

Solution 1:

Following taxes would be deducted in determining an employee's net pay:

1. Federal Income Taxes

2. Medicare Taxes

3. Social Security Taxes

Hence option d "All of the above is correct"

Solution 2:

Net income (Loss) = Ending owner's equity + Withdrawls - beginning owner's equity

= $43,000 + $16,000 - $65,000 = Net loss of $6,000

Hence option d is correct.

Solution 3:

The Cash Payments Journal will generally "Debit Accounts Payable and Credit Cash"

Hence option d is correct.