Which of the following would be placed in the “Post. Ref.” column to indicate that the
amount is not posted individually?
a. the abbreviation “CJ”
b. an “x”
c. a dash
d. a check mark
Form 941 is a(n)
a. Employee Withholding Allowance Certificate.
b. Employer’s Quarterly Federal Tax Return.
c. Wage and Tax Statement.
d. Employer’s Annual Federal Unemployment Tax Return.
Cash and other assets that will be converted into cash within one year or the normal
operating cycle of the business, whichever is longer, are called
a. property.
b. plant.
c. equipment.
d. current assets.
An account used with a related account to bring about a decrease in the net amount of
the two account balances is called a(n)
a. contra-account.
b. expense account.
c. adjusting account.
d. revenue account.
A cash payment on a loan affects which of the following accounts?
a. Cash and Accounts Receivable
b. Cash and Notes Payable
c. Cash and an expense account
d. Cash and a revenue account
The drawing account should be used to show
a. the amount the owner has invested in the business.
b. the amount the owner has taken out of the business.
c. the amount the business has earned.
d. the amount the business has spent.
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
a. name, address, and Social Security number.
b. gross amount of earnings, date of payment, and period of employment covered by
each payroll.
c. gross amount of earnings accumulated since the first of the year.
d. number of hours the employee works as a volunteer for the community.
An asset cost $33,000. It has an expected useful life of 5 years and an expected salvage
value of $3,000. Depreciation expense for the first year of the asset’s life using the
straight-line method is
a. $6,000.
b. $6,600.
c. $10,000.
d. $13,200.
A separate record of each employee’s earnings is called a(n)
a. payroll register.
b. employee earning record.
c. payroll ledger.
d. payroll check.
The depreciation system used by many businesses for tax purposes is the
a. Accelerated Cost Recovery System.
b. Modified Adjusted Cost Recovery System.
c. Modified Actual Cost Recovery System.
d. Modified Accelerated Cost Recovery System.
The transaction to record payment for delivery equipment that was purchased on
account in the previous month would include
a. debiting Cash and crediting Accounts Receivable.
b. debiting Cash and crediting Accounts Payable.
c. debiting Accounts Payable and crediting Cash.
d. debiting Delivery Equipment and crediting Cash.
If, in the effort to prove cash, a shortage is found, the amount is treated as a(n)
a. cash receipts transaction.
b. petty cash transaction.
c. revenue earned transaction.
d. expense.
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
a. $32.51.
b. $425.00.
c. $469.51.
d. $437.00.
(Appendix) Equipment costing $12,000 was purchased for cash. This activity is
classified as
a. operating.
b. investing.
c. financing.
d. borrowing.
The capital account
a. decreases with increased revenue.
b. increases with increased expenses.
c. has a normal balance of a debit.
d. increases when the owner invests money in the business.
To record the purchase of assets on account under the modified cash accounting
method,
a. no entry is required.
b. debit the asset and credit Accounts Payable.
c. debit the asset and credit Cash.
d. debit Accounts Receivable and credit Accounts Payable.
The various government laws and regulations regarding employee deductions,
employer payroll taxes, payroll records, and payroll reports apply only to employees
and not to independent contractors.
A purely manual system of record keeping is one in which all records, journals, and
ledgers are prepared by hand.
Taxes levied on employers at the same rates and on the same earnings bases as the
employee Social Security and Medicare taxes are known as ____________________.
Self-employed individuals can be viewed as both employer and employee.
The only correct way to change the balance of a ledger account is to make a journal
entry.
____________________ use computers rather than paper checks to complete
transactions with the bank.
The ____________________ is a method of accounting under which revenues are
recorded when earned and expenses are recorded when incurred.
The ____________________ reports the investments and withdrawals by the owner,
the profits and losses generated through operations, and how they have affected the
capital account.
A trial balance is taken periodically to check the equality of the debits and credits.
The bank on which a check is drawn is known as the ____________________.