“Closing slows down the recording of next year’s transactions.” Defend or reject this statement with supporting evidence.
> Employer B has a FUTA tax liability of $553.24 on January 31 of the current year. When does the employer have to make the deposit for this liability?
> Why would one employer prepare a Form 940 completing Part 1, line 1a, but another would prepare a Form 940 Part 1, line 1b?
> Why might a company have a separate cash account for payroll?
> What purpose does the individual employee earnings record serve?
> Explain how to calculate OASDI and Medicare taxes.
> Define and state the purpose of FICA taxes.
> The taxable earnings column of a payroll register records the amount of tax due. Agree or disagree?
> Explain why a business should prepare a payroll register before employees are paid.
> Explain how federal and state income tax withholdings are determined.
> The more allowances an employee claims on a W-4 form, the more take-home pay the employee gets with each paycheck. Agree or disagree?
> Explain how a W-4 form, called the Employee’s Withholding Allowance Certificate, is used to determine Federal Income Tax (FIT) withheld.
> An employer must always use a calendar year for payroll purposes. Agree or disagree and explain your answer.
> Explain how to calculate overtime pay.
> What is a calendar year?
> Burton Fish is the purchasing agent for Lyle Co. One of his suppliers, Grant Co., offers Burton a free vacation to Spain if he buys at least 50% of Lyle’s supplies from Grant Co. Burton, who is angry because Lyle Co. has not given him a raise in over a y
> What taxes are recorded when recording Payroll Tax Expense?
> An employee for Repairs to Go, Inc., works different numbers of hours each week depending on the needs of the business. To simplify the accounting, the bookkeeper for Repairs to Go classifies this employee as a salaried person. Is this practice appropria
> Who pays workers’ compensation insurance, the employee or the employer? What types of benefits does this insurance provide? How are premiums calculated?
> Explain what an experience or merit rating is and how it affects the amount paid by an employer for state unemployment insurance.
> Explain how an employer can receive a credit against the FUTA tax due.
> The employer doesn’t have to contribute to FICA. Agree or disagree? Please explain.
> What is the purpose of the Fair Labor Standards Act (also called the Federal Wage and Hour Law)?
> An NSF check results in a bank issuing the depositor a credit memorandum. Agree or disagree? Please explain your response.
> Why are outstanding checks subtracted from the bank balance?
> Explain the end product of a bank reconciliation.
> Meg Ryan, the bookkeeper of Logan Co., was scheduled to leave on a three week vacation at 5:00 on Friday. She couldn’t get the company’s trial balance to balance. At 4:30, she decided to put in fictitious figures in her computer to make it balance. Meg t
> A bank statement is sent twice a month. True or false? Please explain.
> Why should check stubs be filled out first, before the check itself is written?
> Explain the difference between payee, drawer, and drawee.
> Explain the difference between a blank endorsement and a restrictive endorsement.
> What is the advantage of having preprinted deposit slips?
> Explain how Cash Short and Over can be a miscellaneous expense.
> Explain the purpose of a change fund.
> At the time of replenishment, why are the totals of individual expenses debited?
> Explain the relationship of the auxiliary petty cash record to the recording of the cash payment.
> Petty cash is a liability. Agree or disagree? Explain.
> How does one calculate Paid-In Capital in Excess of Par Value or Stated Value?
> What is meant by check truncation or safekeeping?
> What are the major advantages and disadvantages of online banking?
> What is EFT?
> Why do adjustments to the checkbook balance in the reconciliation process need to be journalized?
> Discuss how smartphone apps are making banking more mobile.
> What accounts are usually listed on a post-closing trial balance?
> How can a worksheet aid the closing process?
> What is the purpose of Income Summary and where is it located?
> List the four steps of closing.
> How has computer software affected use of closing entries?
> Explain the steps of closing for a merchandise company.
> What is the difference between temporary and permanent accounts?
> Why must adjusting entries be journalized even though the formal statements have already been prepared?
> Closing entries are always prepared once a month. Agree or disagree? Why?
> When a worksheet is completed, what balances are found in the general ledger?
> Why don’t the formal financial statements contain debit or credit columns?
> Define the term accrued salaries.
> Each month Accumulated Depreciation grows while Equipment goes up. Agree or disagree? Defend your position.
> Depreciation expense goes on the balance sheet. True or false. Why?
> Why do we need the Accumulated Depreciation account?
> Explain why figures for beginning and ending inventory are not combined on the Income Summary line of the worksheet.
> Explain how an adjustment can affect both the income statement and balance sheet. Please give an example.
> What is the relationship of internal transactions to the adjusting process?
> What is the purpose of adjusting accounts?
> Alice Hawkins, president of Realon Co., went to a conference on tax planning. One of the speakers at the seminar advised the audience to put off showing expenses until next year because doing so would allow them to take advantage of a new tax law. When A
> Explain how the financial statements are prepared from the worksheet.
> With computer software, the need for worksheets has been completely eliminated. Agree or disagree and explain your answer.
> Posting means updating the journal. Agree or disagree? Please comment.
> What is a compound journal entry?
> What is the relationship of the chart of accounts to the general journal?
> How do transactions get “linked” in a general journal?
> Jim Heary is the custodian of petty cash. Jim, who is short of personal cash, decided to pay his home electrical and phone bills from petty cash. He plans to pay it back next month. Do you feel Jim should do so? You make the call. Write down your specifi
> With computers today, ledgers are not needed in today’s accounting system. Agree or disagree and defend your position.
> What are interim statements?
> Compare and contrast a calendar year versus a fiscal year.
> An accounting period is based on the balance sheet. Agree or disagree and defend your position.
> What is the difference between a transposition and a slide?
> Discuss the concept of cross-referencing.
> The PR column of a general journal is the last item to be filled in during the manual posting process. Agree or disagree?
> The side that decreases an account is the normal balance. True or false?
> Not all businesses have or need an accounting cycle. Agree or disagree and defend your position.
> Why are there no debit or credit columns on financial statements?
> How are Form 941 taxes paid to the Treasury Department?
> Tropp Corporation was just issued a charter by the state of New York. This charter gives Tropp the authority to issue 150,000 shares of $10 par-value common stock. Consider the following transactions: 1. Prepare journal entries to record the transactions
> A trial balance is a formal statement. True or false? Please explain.
> Computers cannot do debits and credits—agree or disagree and explain why.
> What are the five steps of the transaction analysis chart?
> What do we mean when we say that a transaction analysis chart is a teaching device?
> Pete Robinson wants to have a one-third interest in a law practice that has two partners with capital balances as follows: Ricky Slade, Capital …………………………………….. $5,300 Alan Pool, Capital ………………………………………….. 2,700 How much must Pete invest into the partn
> Explain under which method the balance in the Allowance account is ignored. Give an example.
> Calculate Net Purchases from the following: Purchases, $27; Purchases Returns and Allowances, $9; Purchases Discounts, $5.
> Identify which of the following taxes are paid by the employee (EE) and which are paid by the employer (ER): а. FICA Medicare b. FIT с. FUTA d. SUTA
> Match the following: 1. Total gross pay 2. A deduction 3. Net pay Office Salary Expense a. b. FICA OASDI с. FICA Medicare d. Federal Income Tax е. Medical Insurance f. Wages and Salaries Payable
> In Exercise 5, if the custodian decided to raise the level of petty cash to $30.75, what would be the journal entry to replenish? (Use a general journal entry.)
> Explain why stock dividends will not reduce total stockholders’ equity.
> Petty cash was originally established for $23. During the month, $5.20 was paid out for thumbtacks and $5.90 for paper cups. During replenishment, the custodian discovered that the balance in petty cash was $7.80. Record, using a general journal entry, t
> Indicate what effects (#1–4) each situation (#a–f) will have. (Note: There might be more than one effect applicable for a situation.) 1. New check written. 2. Recorded in general journal. 3. Petty cash voucher prepared
> Which of the transactions in Exercise 1 would require a journal entry?
> Indicate what effect (#1–4) each situation (#a–f) will have on the bank reconciliation process. 1. Add to bank balance. 2. Deduct from bank balance. 3. Add to checkbook balance. 4. Deduct from checkbook balance.
> Indicate next to each statement whether it refers to the income statement (IS), statement of owner’s equity (OE), or balance sheet (BS). а. Withdrawals found on it b. List total of all assets Statement that is prepared last с. d. S
> 8. Indicate whether the following items would appear on the income statement (IS), statement of owner’s equity (OE), or balance sheet (BS). Tutoring Fees Earned a. b. Office Equipment Accounts Receivable с. d. Office Supplies Legal
> Which of the following statements are false? Revenue provides only outward flows of cash. a. Revenue is a subdivision of Assets. b. Revenue provides an inward flow of cash or accounts receivable. C. d. Expenses are part of Total Assets.
> Identify which of the following are not assets. a. Sony DVD Player b. Accounts Receivable c. Accounts Payable d. Grooming Fees Earned
