What is the normal balance of Sales Discount?
> What is the carrying value of a bond?
> The straight-line method of amortizing a bond discount or premium will result in an uneven amount of discount or premium that increases or decreases expense each period. Agree or disagree? Why?
> Premium on Bonds Payable will cause total interest expense to be reduced. True or false?
> Why isn’t Discount on Bonds Payable an immediate expense?
> Explain why a bond may sell at a premium.
> Accrued interest results in the seller paying extra for bonds. True or false? Explain.
> Dividends reduce earnings before taxes. True or false? Explain.
> What is the difference between a secured bond and a debenture bond?
> Thad decided to end the Smith Computer Center’s first year as of September 30, 201X. Following is an updated chart of accounts. Assets …………………………….…………………………………………………. Revenue 1000 Cash …………………..…………………………………. 4000 Service Revenue 1020 Accounts Receivab
> Alice wants to buy bonds, but her husband, Pete, thinks stocks would be a better deal. Pete was watching a finance show on TV that said stocks would be going up and that now is the time to buy stock. He called Alice over and said, “I told you so.” Alice
> In a periodic system of inventory, the balance of beginning inventory will remain unchanged during the period. True or false?
> What is the purpose of a bond sinking fund?
> Why does the interest method of amortizing a discount or premium use the market rate in calculating interest expense to be recorded?
> Explain the selling price of a bond quoted at 99.
> All treasury stock is recognized as issued and outstanding for dividends. True or false? Please explain.
> Treasury stock is really an asset. Defend or reject. Support your argument.
> Common Stock Dividend Distributable is a liability. Agree or disagree? Defend your position.
> Explain some possible reasons a company may declare a stock dividend instead of a cash dividend.
> Why is no journal entry needed at the date of record?
> List the three important dates that are associated with the dividend process.
> At the end of September, Thad took a complete inventory of his supplies and found the following: 3 dozen 1 /4" screws at a cost of $5.00 a dozen 6 dozen 1 /2" screws at a cost of $10.00 a dozen 5 cartons of computer inventory paper at a cost of $8 a cart
> Explain why Unearned Revenue is a liability account.
> Before Adjustment Given: At year end, depreciation on Equipment is $1,700. a. Which of these three T accounts is not affected? b. Which account is a contra-asset? c. Complete a transaction analysis box for this adjustment. d. What will be the balance o
> Alan Homes serves on the board of directors of Flynn Company. The president of Flynn told him that in three weeks the corporation would announce a 25% increase in dividends. Alan called his neighbor to tell him to buy some stock. The neighbor told his fr
> What elements make up the statement of retained earnings?
> Appropriation of retained earnings is always done for a contractual reason. Agree or disagree? Defend your position.
> Explain the purpose of the account Paid-In Capital from Treasury Stock.
> What is the normal balance and the category of the account Discount on Common Stock?
> Preferred stock can never be cumulative and nonparticipating. True or false? Support your answer.
> What does preemptive right mean?
> What is the maximum number of shares a company may legally issue?
> Explain the difference between Paid-In Capital and retained earnings.
> Happy Carpet Cleaning, Inc., collects FIT, OASDI, and Medicare from its employees by withholding these taxes from its employees’ pay. However, Happy does not pay these amounts to the federal government until the end of the calendar year so that it can ma
> What is the normal balance of Purchases Discount?
> How are discounts recorded in a perpetual system?
> Employer A has a FUTA tax liability of $67.49 on March 31 of the current year. When does the employer have to make the deposit for this liability?
> What is the normal balance of cost of goods sold?
> What new account is used in a perpetual system compared to the periodic system?
> Explain why a trade discount is not a cash discount.
> Why would the purchaser issue a debit memorandum?
> Explain the difference between merchandise and equipment.
> Explain how net purchases is calculated.
> When is a (✓) used?
> Why is the accounts receivable subsidiary ledger organized in alphabetical order?
> Compare and contrast the Controlling Account—Accounts Receivable to the accounts receivable subsidiary ledger.
> What category is Sales Discount in?
> Paul Kloss, accountant for Lowe & Co., traveled to New York on company business. His total expenses came to $350. Paul felt that because the trip extended over the weekend he would “pad” his expense account with an additional $100 of expenses. After all,
> Explain the terms: a. 2/10, n/30 b. n/10, EOM
> Give two examples of contra-revenue accounts.
> When a seller issues a credit memorandum (assume no sales tax), what accounts will be affected?
> Sales discounts are taken on sales tax. Agree or disagree? Explain why.
> Why is sales tax a liability to the business?
> What is an invoice? What purpose does it serve?
> Explain the purpose of a contra-revenue account.
> Bill Smith leaves his job on July 9. He requests a copy of his W-2 form when he leaves. His boss tells him to wait until January of next year. Please discuss whether Bill’s boss is correct in making this statement.
> Under what circumstance(s) does the amount on line 14 of Form 941 match the amount found on line 10?
> Pete Rose, the accountant of Rich Co., would like to buy a new software package for his general ledger. He couldn’t do it because all funds were frozen for the rest of the fiscal period. Pete called his friend at Flynn Industries and asked whether he cou
> How often is Form 941 completed?
> How is an employer classified as a monthly or semiweekly depositor for Form 941 tax purposes?
> What is a look-back period?
> What account is debited when recording the distribution of the payroll checks to the employees?
> How do you transfer money into the payroll cash account?
> Discuss ways an employer can prepare and submit forms W-2 and W-3 online.
> Who completes Form W-2? Form W-3? When is each form completed?
> 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.
