Question

Answer the following questions:

41.- Kathryn Holmes cumulative earnings are $45,000 and her gross pay for the week is $500 if the FICA rates are Social Security 6.2% on a limit Security and FICA-Medicare taxes for the week?

a) $31.00 $7.25

b) $310.00 $72.50

c) $3.10 $0.73

d) $25.50   $8.00

42.- The balance in the Salaries and Wages Payable account is equal to net pay

True

False

43.- The Federal Unemployment Tax is

a) paid by the employer

b) paid by employees

c) paid by unemployed workers

d) all of these answers are correct

44.- Calculate from the following information accumulated by Mary Jones, the adjusted cash balance at the end of August

Bank statement ending cash balance              $2,500

General ledger cash balance ending                  2,750

Bank monthly service charge                                    20

Deposit in transit                                                    1,400

Outstanding checks                                               1,235

NSF check returned with bank statement              65

$2,665

$2,500

$2,750

$2,435

45.- Which of the following statements is true?

a) Payroll tax Expense is an expense account

b) FICA- Social Security Tax Payable increases on the credit side of the account

c) Payroll Tax Expense increases on the debit side of the account

d) All of these answers are correct

46.- To compute FICA Social Security tax to be withheld

a) use the net earnings and number of allowances

b) use gross earnings, number of allowances and marital status

c) use net earnings and Form W-4

d) none of these answers is correct

47.- The Wages and Salaries Expense account would be used to record

a) net earnings for the office workers

b) a credit to the amount owed to the office workers

c) gross earnings for the office workers

d) a debit for the amount of net pay owed to the office workers

48.- The entry to record the payment of payroll taxes withheld from employees and FICA taxes would be to:

a) credit cash, debit FICA-Social Security Payable, FICA-Medicare Payable and Federal Income Tax Payable

b) debit cash, credit FICA-Social Security Payable, FICA-Medicare Payable, and Federal Income Tax Payable

c) credit Cash, credit FICA-Social Security Payable, FICA-Medicare Payable, and Federal Income Tax Payable

d) none of these answers is correct

49.- Mary Gross hourly rate is $10.00 and she worked 44 hours during the week. Assuming an overtime rate of the time and a half over 40 hours. Mary´s gross pay is

a) $400

b) $460

c) $430

d) $350

50.- Marcy´s cumulative earnings before this pay period were $6,200, and gross for the week is $500. How much of this week´s pay is subject to taxes for SUTA is 5.4%and FUTA is 0.8% with a base of $7,000

a) $300

b) $500

c) $6,700

d) $0

51.- Under the Fair Labor Standards Act, for any hours that an employee works over 40 during a work

a) the employee must be paid double

b) the employee is paid time and a half

c) the employee must receive the minimum wage

d) all of these answers are correct

52.- A form completed by employees showing the number of allowances is

a) form W-2

b) form 941

c) form W-4

d) form 8109

53.- The normal balance of the Petty Cash account is a credit

True

False

54.- Accompanying the bank statement was a debit memorandum for bank charges. On the bank reconciliation the item

a) a deduction from the balance per depositor´s records

b) an addition to the balance per bank statement

c) a deduction from the balance per bank statement

d) an addition to the balance per depositor´s records

55.- For which of the following taxes is there no ceiling on the amount of employee annual earning

a) FICA-Social Security

b) FICA-Medicare

c) Federal Unemployment Tax

d) State Unemployment Tax

56.- On December 1, Diane Olson does not have and FICA-Social Security tax withheld from her earnings. What is the most likely reason?

a) Diane has already made over the FICA-Social Security limit for the year

b) An error was made if no FICA-Social Security and FICA-Medicare was withheld

c) Diane´s number of allowance withholdings claimed was high

d) Diana owes no federal income tax for the period

57.- The amount of federal income tax withheld from an employees during the year is determined by the employee´s

a) W-4 form

b) W-2 form

c) 1040 form

d) None of these answers is correct

58.- An employee has gross earnings of $700 and withholdings of $53.55 FICA Social Security and Medicare) and $50 for income taxes. The employer pays %53.55 FICA (Social Security and Medicre) $10 for SUTA, and $5.60 FUTA. What is the employer´s total cost of the employee?

a) $780.00

b) $769.15

c) $819.15

d) $905.55

59.- Which of the following would not typically be an employee payroll withholding?

a) Union dues

b) Purchases of savings bonds

c) Federal income tax

d) Unemployment taxes

60.- Company policy for internal control should include all of the following except

a) Employees will be rotated

b) The owner (or responsible employee) signs all checks after receiving authorization to pay from

c) At time of payment al supporting invoices or documents will be stamped paid

d) One employee should have the total responsibility for approving purchases, authorizing payment

61.- The entry to record the employer’s payroll tax is to

a) debit payroll taxes payable, credit FICA (social security and Medicare) SUTA FUTA Payable

b) debit Payroll taxes expense, credit FICA (Social security and Medicare) FUTA SUTA Payable

c) debit FICA (social security and Medicare) SUTA FUTA Payable, credit payroll taxes payable

d) debit FICA (social security and Medicare) SUTA FUTA Payable, credit payroll taxes expense

62.- The bank statement shows

a) the beginning bank balance of the cash at the start of the month

b) the checks the bank has paid and any deposits received

c) any other charges or additions to the bank balance

d) all of these answers are correct

63.- The August bank statement for Mobile Service shows a balance of $8,900 but the balance per books shows a cash balance of $ 8,310

1. A check for $10 was recorded on the books as $100

2. Included on the bank statement was a note collected by the bank for $600 plus interest of 40

3. Checks outstanding totaled $480

4. Bank service charges were $20

5. Deposits in transit were $600

Which item(s) will require an adjustment to the cash account?

Checks outstanding and deposits in transit

Bank service charges note collected by the bank and error made by Mobile

Bank service charges note collected by the bank, and deposits in transit

None of these answers is correct

64.- A check for $78 is incorrectly recorded on the checkbook stub as $87. The $9 error should be shown on the bank reconciliation

a) added to the balance per books

b) deducted from the balance per books

c) added to the balance per bank statement

d) deducted from the balance per bank statement

65.- The payroll taxes the employer is responsible for are,

a) FICA, SUTA and FUTA

b) FICA, FIT, and SIT

c) FICA, workers´ compensation and FIT

d) None of these answers is correct

66.- When a bank debits your account, it is decreasing the balance

True

False

67.- An employer can reduce the state unemployment tax rate by providing steady employment for the employees

True

False

Answer 1

41	Ans is A	$31, $7.25
		Rate	Amount	Tax
Explanation	Social Security	6.20%	500	$    31.00
	Medicare	1.45%	500	$       7.25
42	Ans is False
Explanation	Salaries and wage payable represents part of salaries which is earned
	by employees but not yet due while net pay is salaries that is paid
	after deductiong all taxes.
43	Ans is A	Paid by employer
Explanation	Unemployment tax is only paid by employer not by employee.
44	Bank reconciliation
	Balance as per bank		2500
	Add: Deposit in transit		1400
	Less: Outstanding check		-1235
	Adjusted cash balance		2665
	Balance per cash		2750
	less: bank charges		-20
	Less: NSF Check		-65
	Adjusted cash balance		2665
	Ans is A $2665