The federal unemployment tax is levied on
a. employers and is not deducted from employees’ earnings.
b. employees and is deducted from their earnings.
c. employers and is deducted from employees’ earnings.
d. employees and employers.
Vince Lupino works for Best Supplies Company, which pays its employees time and a
half for all hours worked in excess of 40 hours per week. Lupino’s rate of pay is $12.00
per hour paid weekly. Federal income tax withheld was $500. His wages are subject to
Social Security tax withheld at the rate of 6.2% and Medicare tax at the rate of 1.45%.
He worked 8 hours of overtime last week (week ended July 16). Required:
1> Compute the following: a. Regular pay for the week b. Overtime pay for the week c.
Total gross wages d. Social Security withheld e. Medicare tax withheld f. Total
withholding g. Net pay
2> Journalize the payroll entry.
The following transactions occurred at Forever Green Lawn Service. Identify which
account would be debited and credited to record each transaction. Write the identifying
letters in the proper columns. The first transaction has been completed as an example.
A. Cash
B. Accounts Receivable
C. Supplies
D. Equipment
E. Accounts Payable
F. Fees Income
G. Rent Expense
H. Salaries Expense
I. Telephone Expense
The end-of-period work sheet is used to facilitate
a. preparing financial statements.
b. posting the special journal.
c. updating appointment records.
d. recording transactions in the general ledger.
Compensation normally expressed in biweekly, monthly, or annual terms for managerial
or administrative services is called
a. supplements.
b. commission.
c. salary.
d. wages.
When an individual entry is posted from the combination journal to a ledger account,
what information is entered in the “Post. Ref.” column of the combination journal?
a. the letters “CJ”
b. the letters “CJ” and the page number
c. the letters “CJ” and the invoice number
d. the account number
A T account has which of the following three major parts?
a. a title, a debit side, and a credit side
b. a title, a current date, and a balance
c. a debit side, a credit side, and a total column
d. a debit side, a credit side, and a balance
The Item column in the general ledger is used for
a. account titles.
b. the balance of the account.
c. a description of special entries.
d. footings.
When recording closing entries in the general journal, which of the following is written
in the Description column?
a. “closing entries”
b. a description of the transaction
c. nothing
d. “zero out accounts”
Instead of T accounts, businesses are more likely to use a
a. chart of accounts.
b. balance sheet.
c. four-column account.
d. general journal.
On a bank reconciliation, checks issued during the period that were not presented to the
bank for payment before the bank statement was prepared are known as
a. NSF checks.
b. outstanding checks.
c. deposits in transit.
d. dishonored checks.
To find an error, you should do all of the following EXCEPT
a. double-check every entry.
b. find the difference between debits and credits.
c. erase questionable entries.
d. retrace any math computations.
The person who records or enters information in accounting records may be referred to
as a(n)
a. budgeter.
b. journalist.
c. accounting clerk.
d. scribe.
In reconciling a bank statement, the bank statement balance is $1,000 and the balance
per books is $1,205. A bank service charge is $5; a deposit in transit totals $500, and
outstanding checks total $300. The adjusted bank balance and book balance is
a. $1,500.
b. $1,205.
c. $1,200.
d. $1,505.
The account that is credited with amounts withheld from an employee’s earnings for any
pension plan contribution is
a. Pension Plan Expense.
b. Pension Plan Taxes Payable.
c. Miscellaneous Expense.
d. Pension Plan Deductions Payable.
Any person who agrees to perform a service for a fee and is not subject to the control of
those for whom the service is performed is called a(n)
a. manager.
b. employee.
c. independent contractor.
d. executive.
Form 941, Employer’s Quarterly Federal Tax Return, must be filed with the IRS at the
end of the month following each calendar quarter.
The ____________________ is shown on the third line of the trial balance heading.
A(n) ____________________ is a written promise to pay a supplier for assets
purchased or services received.
Checks deposited by the depositor that are not paid because the drawer did not have
sufficient funds are called ____________________.
The income statement reports earnings on a specific date.
The matching principle offers the best measure of net income.
The payroll register for Star Express & Company for the pay period ended January 31,
20–, showed the following:
The Social Security tax rate is 6.2%, Medicare tax is 1.45%, FUTA tax is 0.8%, and
SUTA tax is 5.4%.
Required:
