Exam (elaborations)
FPC Chapter 6.3 (1).
- Course
- FPC Chapter 2.2 & 2.3
- Institution
- FPC Chapter 2.2 & 2.3
FPC Chapter 6.3 (1).
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FPC Chapter 6.3A company withheld federal income, social security, and Medicare taxes in the amount of
$65,498.00. Until deposited, the $65,498.00 will be:
A. accrued as a credit in a tax liability account.
B. accrued as a debit in the tax expense account.
C. reversed as a debit in a tax liability account.
D. reversed as a credit in the tax expense account. - ANS-A. accrued as a credit in a tax liability
account.
***An accrual, as recorded in a company's books, is designed to satisfy the matching principle
where revenue, expenses, and liabilities are recorded in the same accounting period in which
the expense is incurred or the revenue is earned.***
An employee earned $12,000.00 in commissions during the fourth quarter. This amount will not
be paid until the following quarter. The journal entry for this item is to:
A. debit accrued salary payable; credit accrued salary expense.
B. debit salary payable; credit payroll cash account.
C. debit salary payable; credit salary expense.
D. debit accrued salary expense; credit accrued salary payable. - ANS-D. debit accrued salary
expense; credit accrued salary payable.
What two ways may payroll expenses be recorded?
A. By cash payment or payment by check.
B. By function or by type of pay.
C. By operating or by nonoperating.
D. By current or by long term. - ANS-By function or by type of pay.
***Payroll expenses may be recorded in one of two ways: by function or by type of pay.***
Salaries earned but not yet paid in the current month must be recorded as a:
A. debit to salary expense.
B. credit to salary expense.
C. debit to cash.
D. debit to salary payable. - ANS-A. debit to salary expense.
On a Friday payday, a company posts $33,180.00 in payroll taxes to a liability account. When
the amount is deposited on Wednesday, the journal entry is to:
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