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Exam 11: Current Liabilities and Payroll

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Question 101

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Form W-4 is a form authorizing employers to withhold a portion of employee earnings for payment of an employee's federal income taxes.

A) True
B) False

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Question 102

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Internal controls for cash payments apply to payrolls.

A) True
B) False

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Question 103

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The amount borrowed is equal to the face amount of the note on an interest-bearing note payable.

Which of the following is the most desirable quick ratio?

Federal unemployment compensation taxes that are collected by the federal government are not paid directly to the unemployed but are allocated among the states for use in state programs.

Baker Green's weekly gross earnings for the week ending December 7 were $2,500, and her federal income tax withholding was $525. Prior to this week Green had earned $98,000 for the year. Assuming the social security rate is 6.0% and Medicare is 1.5%, what is Green's net pay?

The following totals for the month of April were taken from the payroll register of Magnum Company:?? $\begin{array} { l r } \text { Salaries } & \$ 10,000 \\\text { FICA taxes withheld } & 750 \\\text { Income taxes withheld } & 2,000 \\\text { Medical insurance deductions } & 450 \\\text { Unemployment taxes } & 420\end{array}$ The entry to record the accrual of the employer's payroll taxes would include a

The journal entry to record the cost of warranty repairs that were incurred during the current period, but related to sales made in prior years, includes a debit to Warranty Expense.

The proceeds from discounting a $20,000, 60-day note payable at 6% is $20,200.

Lamar Industries warrants its products for one year. The estimated product warranty expense is 3% of sales. Sales for June were $190,000. In July, a customer received warranty repairs requiring $185 of parts and $50 of labor. (a)Journalize the adjusting entry required at June 30, the end of the first month of the current year, to record the estimated product warranty expense. (b)Journalize the entry to record the warranty work provided in July.

Proper payroll accounting methods are important for a business for all of the following reasons except

On June 8, Williams Company issued an $80,000, 5%, 120-day note payable to Brown Industries. Assuming a 360-day year, what is the maturity value of the note?

Which of the following would most likely be classified as a current liability?

Medicare taxes are paid by both the employee and the employer.

Federal income taxes withheld increase the employer's payroll tax expense.

The journal entry a company uses to record fully funded pension rights for its salaried employees at the end of the year is

Payroll taxes only include social security taxes and federal unemployment and state unemployment taxes.

Match each of the following items with the term or phrase (a-g) that best describes it. Terms or phrases may be used more than once. -(Cash + Temporary investments + Accounts receivable) /Current liabilities

Chang Co. issued a $50,000, 120-day, discounted note to Guarantee Bank. The discount rate is 6%. Assuming a 360-day year, the cash proceeds to Chang Co. are

One of the more popular defined contribution plans is the 401k plan.