Multiple Choice Questions For Accounting. Help me find the best answer!?
8. On June 8, Acme Co. issued an $80,000, 6%, 120-day note payable to Still Co. Assume that the fiscal year of Acme Co. ends June 30. What is the amount of interest expense recognized by Acme in the current fiscal year?
9. An employee receives an hourly rate of $25, with time and a half for all hours worked in excess of 40 during a week. Payroll data for the current week are as follows: hours worked, 46; federal income tax withheld, $350; cumulative earnings for year prior to current week, $99,700; social security tax rate, 6.0% on maximum of $100,000; and Medicare tax rate, 1.5% on all earnings. What is the gross pay for the employee?
10. An employee receives an hourly rate of $15, with time and a half for all hours worked in excess of 40 during the week. Payroll data for the current week are as follows: hours worked, 48; federal income tax withheld, $120; cumulative earnings for the year prior to this week, $24,500; Social security tax rate, 6% on maximum of $100,000; and Medicare tax rate, 1.5% on all earnings; state unemployment compensation tax, 3.4% on the first $7,000; federal unemployment compensation tax, .8% on the first $7,000.
What is the employer's payroll tax expense?
11.The following totals for the month of April were taken from the payroll register of Main Company.
FICA taxes withheld 550
Income taxes withheld 2,500
Medical insurance deductions 450
Federal Unemployment Taxes 32
State Unemployment Taxes 216
The entry to record accrual of employer’s payroll taxes would include a
a. debit to Payroll Tax Expense for $248.
b. credit to FICA Taxes Payable for $1,100.
c. credit to Payroll Tax Expense for $248.
d. debit to Payroll Tax Expense for $798.
12. Which of the following is an example of a variable component of a payroll system?
a. hours worked
b. Medicare tax rate
c. rate of pay
d. Social security tax rate
13. The journal entry a company uses to record accrued vacation privileges for its employees at the end of the year is
a. debit Vacation Pay Expense; credit Vacation Pay Payable
b. debit Vacation Pay Payable; credit Vacation Pay Expense
c. debit Salary Expense; credit Cash
d. debit Salary Expense; credit Salaries Payable
14. Which of the following is not characteristic of a corporation?
a. The financial loss that a stockholder may suffer from owning stock in a public company is limited.
b. Cash dividends paid by a corporation are deductible as expenses by the corporation.
c. A corporation can own property in its name.
d. Corporations are required to file federal income tax returns.
15. If Larger Company issues 1,000 shares of $5 par value common stock for $70,000, the account
a. Common Stock will be credited for $70,000.
b. Paid-in Capital in excess of Par Value will be credited for $5,000.
c. Paid-in Capital in excess of Par Value will be credited for $65,000.
d. Cash will be debited for $65,000.
16. The cumulative effect of the declaration and payment of a cash dividend on a company’s financial statements is to
a. decrease total liabilities and stockholders’ equity.
b. increase total expenses and total liabilities.
c. increase total assets and stockholders’ equity.
d. decrease total assets and stockholders’ equity.
17. Day Inc. has 5,000 shares of 5%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2006. What is the annual dividend on the preferred stock?
a. $50 per share
b. $25,000 in total
c. $600 in total
d. $0.50 per share
18. A company with 100,000 authorized shares of $4 par common stock issued 50,000 shares at $9. Subsequently, the company declared a 2% stock dividend on a date when the market price was $10 a share. The effect of the declaration and issuance of the stock dividend is to
a. decrease retained earnings, increase common stock, and increase paid-in capital
b. increase retained earnings, decrease common stock, and decrease paid-in capital
c. increase retained earnings, decrease common stock, and increase paid-in capital
d. decrease retained earnings, increase common stock, and decrease paid-in capital
19. On January 1, 20xx, Sunshine Corporation had 40,000 shares of $10 par value common stock issued and outstanding. All 40,000 shares had been issued in a prior period at $20.00 per share. On February 1, 20xx, Sunshine purchased 2,000 shares of treasury stock for $23 pe