Accounting knowledge MCQs (Chapterwise Multiple Choice Questions)

Find and correct the error(s) in the following general journal entry which recorded a company’s payroll liability: DR Office Salaries Expense, $1,000; CR Social Security Tax Expense, $200. DR Health Insurance Premium Expense, $50. DR Cash, $750. (check all that apply)

DR Social Security Tax Expense

CR Social Security Tax Payable

CR Health Insurance Premium Payable

CR Salaries and Wages Payable

Answer & Explanation

Correct Answer: CR Health Insurance Premium Payable

Note: This Question is unanswered, help us to find answer for this one

What is the FICA percentage withheld from gross wages up to $118,500 for 2016?

1.45%

6.20%

7.65%

None of the above

Answer & Explanation

Correct Answer: 7.65%

Note: This Question is unanswered, help us to find answer for this one

What is a general ledger?

A bookkeeping area in which accounts, sales, and purchases are kept together

A record of all transactions

A book of all finances

All of the Above

Answer & Explanation

Correct Answer: A bookkeeping area in which accounts, sales, and purchases are kept together

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What is the difference between gross pay and net pay?

Hourly rate paid

Number of hours worked

Withholdings

None of the above

Answer & Explanation

Correct Answer: Withholdings

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How does the recording for bad debt expenses differ between the method required for GAAP versus the IRS requirement?

GAAP requires the use of the direct write-off method.

The IRS requires that companies use the direct-write off method.

The IRS requires the allowance method to be used for bad debt expense recording.

There is no difference between the methods required for recording bad debt expenses.

Answer & Explanation

Correct Answer: The IRS requires that companies use the direct-write off method.

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What is the purpose of the schedule of accounts payable?

To record purchases.

It lists all of the creditors.

To record Purchases Returns and Allowance.

It lists all of the liability accounts.

Answer & Explanation

Correct Answer: It lists all of the creditors.

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Choose the selection below that makes the following sentence true: Revenue is only recognized when it is: (check all that apply)

Earned

Realized

Recorded in accounts receivable.

Recorded in the cash account.

Answer & Explanation

Correct Answer: Realized

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What discount amount would be received for an invoice for $5,000 that states “2/10, net 30” if you paid within 8 days?

$0

$50

$100

$150

None of the above

Answer & Explanation

Correct Answer: $100

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BYX has a retail subsidiary that sells sporting goods equipment. On May 15th, BYX sporting goods had credit card sales totaling $1,000. The credit card company charges a 2.75% fee for the daily total transactions. The sales tax rate is 8%. Which of the following is the correct transaction analysis?

DR: Cash, DR: Credit Card Expense; CR: Deferred Sales Tax, CR: Cost of Goods Sold

DR: Cash, DR: Credit Card Expense; CR: Sales Tax Payable, CR: Sales

DR: Cash, DR: Credit Card Expense; CR: Accrued Expenses Payable, CR: Sales

DR: Accounts Receivable, DR: Credit Card Expense; CR: Sales Tax Payable, CR: Cost of Goods Sold

Answer & Explanation

Correct Answer: DR: Cash, DR: Credit Card Expense; CR: Sales Tax Payable, CR: Sales

Note: This Question is unanswered, help us to find answer for this one

___ insurance is a cost that the employer incurs to cover work-related injuries.

Unemployment

Worker's compensation

Medicare

Social Security

None of the above

Answer & Explanation

Correct Answer: Worker's compensation

Note: This Question is unanswered, help us to find answer for this one

Accounting Knowledge Quick Quiz

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Accounting Knowledge MCQ

Accounting Knowledge Quick Quiz

Find and correct the error(s) in the following general journal entry which recorded a company’s payroll liability: DR Office Salaries Expense, $1,000; CR Social Security Tax Expense, $200. DR Health Insurance Premium Expense, $50. DR Cash, $750. (check all that apply)

What is the FICA percentage withheld from gross wages up to $118,500 for 2016?

What is a general ledger?

What is the difference between gross pay and net pay?

How does the recording for bad debt expenses differ between the method required for GAAP versus the IRS requirement?

What is the purpose of the schedule of accounts payable?

Choose the selection below that makes the following sentence true: Revenue is only recognized when it is: (check all that apply)

What discount amount would be received for an invoice for $5,000 that states “2/10, net 30” if you paid within 8 days?

BYX has a retail subsidiary that sells sporting goods equipment. On May 15th, BYX sporting goods had credit card sales totaling $1,000. The credit card company charges a 2.75% fee for the daily total transactions. The sales tax rate is 8%. Which of the following is the correct transaction analysis?

___ insurance is a cost that the employer incurs to cover work-related injuries.