Questions and Answers of Glencoe Accounting First Year Course

a. What procedure is used to correct a general journal entry error in a manual system?b. What are the possible consequences of erasing an error in the general journal?
Greg Failla operates Showbiz Video. The follow ing accounts are used to record business transactions.Record the following transactions on page 5 of the general journal in your working
In your trial balance, the debits equal $18,000 and the credits equal $18,810. What are the most likely reasons for the difference?
a. What is the basic rule concerning mistakes in accounting? b. How do you correct an error in a journal entry that has already been posted?
The change from a small clothing store to a national chain store has affected employee morale. What do you think would help build loyalty to Natural Fibers?
What is the last step of the accounting cycle?
On August 14 Loretta Harper, owner of Peabody Cards and Gifts, deposited the following items in the checking account of the business. Cash: $784.29 Checks: Charles Ling, drawn on American Bank
The manager of Valley View Bowling Center is concerned about cash control and banking procedures for the business. On a separate sheet of paper, write a memo explain ing how the terms here relate to
a. Why do businesses need internal controls?b. What internal controls can a business use to protect cash?
Define internal controls.
Dexter Shuman owns a bowling alley called Ten Pin Alley. Each night, Dexter counts the cash in the two cash registers and makes a night deposit at the local bank. For the month of May, Dexter made
Imagine that you are a cashier at a grocery store like Ralphs. In a four-hour shift, you handle thousands of dollars. At the end of your shift, you total receipts and cash to see if they match. One
Review the Global Travel Agency bank statement and answer the follow ing ques tions in your working papers.1. What is the amount of the returned check?2. How much did the bank charge Global Travel
As a personal banker for Citizen’s First National Bank, your duties include opening personal bank accounts, taking loan applications, and serving bank customers. Today Ms. Kelley wants to open a
a. What is the purpose of a signature card?b. In addition to a signature card, what other forms are involved in using a checking account?
Explain why the balance in the checkbook can differ from the balance on the bank statement.
Imagine how difficult it would be to control cash for hundreds of locations in the United States, Europe, and Asia. Many international companies select one large bank that can handle transactions in
On October 4 the owner of Wilder ness Rentals deposited the following in the business checking account at First National Bank. The beginning balance in the account is $3,306.54 before these
a. What is the purpose of a check stub?b. Why should you complete the check stub before writing the check?
Your bank sent you a dishonored check. What should you do?
If you have a checking account, you know that the balances on the bank statement and in the checkbook seldom agree. You recognize the importance of reconciling the two balances so that you will know
As the accounting clerk for Hot Suds Car Wash, you write checks and make deposits. The current checkbook balance is $3,486.29. For each transaction:1. Record the necessary information on the
a. How should the amount be written on the check?b. Why should checks be written in ink or by typewriter, computer, or check-writing machine?
The bank statement shows a checking account balance of $5,500. There are outstanding checks totaling $600, an outstanding deposit of $400, and a bank service charge of $15. The cash account balance
On October 31 Juanita Ortega, owner of Outback Guide Service, received a bank statement dated October 30. Juanita found the following:1. The checkbook has a balance of $2,551.34.2. The bank statement
Contrast check processing before Check 21 to check processing after Check 21. What are the differences?
One measure of a company’s ability to pay debts is its working capital. Working Capital Current Assets Current Liabilities Current assets are cash and assets that will be converted to cash
On October 31 George Flaum, the accountant for Kits & Pups Groom ing, received the bank statement dated October 30. After comparing the company’s checkbook with the bank statement, George found
On October 31 Showbiz Video received the bank statement dated October 30. The accountant reviewed it and found the following: 1. The checkbook balance on October 31 is $13,462.96.2. The ending
a. How often should a business deposit cash as part of its internal controls?b. What information should you include on a deposit slip?
The first step in balancing a checkbook isa. Subtracting fees on the bank statement from the checkbook balance.b. Comparing checks in the check record with those on the statement.c. Adding interest
On October 20 Job Connect received its bank statement dated October 18.1. The checkbook balance on October 20 is $880.84.2. The ending bank statement balance is $344.58.3. A $14.00 service charge
Suppose you carry out all your transactions electronically. How do you reconcile your bank statement?
a. What information does a bank statement contain?b. List the steps to reconcile a bank statement.
Assess the value of the electronic funds transfer system.
a. What is a bank service charge?b. How does a business record bank service charges in its checkbook and in its accounting records?
a. How do banks use the electronic funds transfer system (EFTS)?b. What are some of the ways customers make electronic purchases?
Define gross earnings.
You are employed by Tallman Financial Advisors, owned by Marcy Tallman. Parker’s Framing hired Tallman to design its payroll system. Parker’s Framing will offer group health insurance to its
Payroll clerks have access to personal information about employees, such as rate of pay and marital status. Imagine that you are the payroll clerk for a clothing store like Gap. Your friend Janet,
Cleary’s Music Center has nine employees. The employees are paid weekly with overtime after 40 hours per week. The overtime rate is 1½ times the regular rate of pay. Payroll information for the
A new co-worker has the choice of receiving a paycheck or using direct deposit. She asks for your recommendation. Write a paragraph explaining direct deposit and recommending whether or not your
a. What are two goals of a payroll system?b. List five tasks that an effective payroll system performs.
You are the payroll clerk for Wild West Amusement Park. The new sales manager for the Western region, Will Klein, called and asked you to explain the items on his payroll check, dated January 31,
Which form is considered the Withholding Allowance Certificate?a. W-2b. W-4c. 1040d. 1099e. None of these answers
Compare and contrast gross earnings and net pay.
Employees who demonstrate integrity are able to make ethical decisions.ON THE JOB As a payroll clerk for Fun ‘n’ Games Amusement Park, you have access to confidential information about
Information related to the just-completed pay period of MegaCom Computer Upgrades is provided in the following chart. Determine the amounts to be withheld from each employee’s gross earnings for
a. List and describe five employee bases or categories used to compute gross pay.b. Define overtime rate.
Julie earns $18.50 per hour. She is paid overtime (time and one-half) for hours worked on Sunday. The first Sunday in June she worked 6 hours, giving her 46 hours for the week. What were her gross
Classify the following deductions as voluntary or required by law: county income tax, dental insurance payment, federal income tax, Medicare insurance payment, United Way donation, vision insurance
Examine the following partially completed payroll check stub. The employee, Melanie Galvin, is single and claims one allowance. What amount should be deducted for: 1. Medicare tax?2. Social
Offshoring is the practice of U.S. companies using overseas providers for certain tasks. For example, technology companies like IBM and Microsoft have used programmers in India, mainly because
a. List the three federal taxes that businesses are required to withhold from employees’ wages.b. What three factors determine the amount of federal income tax withheld from an employee’s
The Accumulated Earnings column of the employee earnings recorda. Shows net pay for the year.b. Is the total earnings since the first of the year.c. Shows net pay for one quarter.d. Is the gross
Use the information on the payroll register for Heather’s Dance School and the form in the working papers to prepare a payroll check for Janice Burns for the week ending March 23, 20--.
a. How is net pay calculated?b. Does an individual’s net pay appear on the payroll register, the employee’s earnings record, or both?
The Medicare tax is calculated bya. Multiplying total earnings by the tax rate.b. Multiplying net earnings by the tax rate.c. Using a tax table.d. None of these
One measure of productivity is the average sales dollars generated by each employee. For example, in a company with total revenue of $1,480,000 and 20 employees, sales per employee are $74,000,
You need to create a new employee’s earnings record for an employee whose record has been lost. What information will you need, and where will you find it?
Wilderness Rentals pays employees either an hourly wage or a salary plus commission based on rental revenue. Hourly wage employees can earn overtime. The overtime rate is 1½ times the regular hourly
a. What information does the payroll register contain?b. Each page of the payroll register covers a period of time. What time period does it cover?
Hot Suds Car Wash has four employees. They are paid on a weekly basis with overtime paid for all hours worked over 40 in a week. The overtime rate is 1½ times the regular rate of pay. The payroll
Justify the fact that a business can have different pay categories for employees.
The payroll register for Kits & Pups Grooming is presented here and also appears in your working papers. Instructions On the forms in your working papers:1. Prepare a payroll check and
a. Explain how direct deposit of earnings works.b. How does an employee who receives a payroll check know how the amount of net pay was determined?
Outback Guide Service has six employees and pays each week. Hourly employees are paid overtime for all hours worked over 40 in a week. The overtime rate is 1½ times the regular rate of pay. Outback
a. What is the purpose of the employee’s earnings record?b. What information does the Accumulated Earnings column on the employee’s earnings record contain?
Showbiz Video has six employees who are paid weekly. The hourly employees are paid overtime for hours worked over 40 in a week, at a rate 1½ times their regular rate of pay. Employee information
Job Connect has seven employees, all of whom are paid weekly. For hourly wage employees, overtime is paid at 1½ times the regular rate of pay for hours worked over 40 in a week.Barbara Miller, the
SweepIt Cleaning Service reported the following amounts for the week ending November 4. The total amount earned by all employees is $2,193.40. The amount withheld for federal income tax is $263.00.
You are the owner of Accurate Financial Services. You have just been hired by Brad Justice, the owner of a new company called Snack Shack, to help establish a payroll system. As a new business owner,
For the week ending June 30, EZ Copy Center’s payroll has total gross earnings of $4,836.60. Calculate the employer’s payroll taxes. Use the following percentages: Social security tax
a. In what expense account are employees’ earnings often recorded?b. List the accounts in which the payroll liabilities for federal income tax and Medicare tax are recorded.
When a semimonthly payroll is paid, the credit to Cash is equal to thea. Total earnings of all employees.b. Total deductions for income tax and social security tax.c. Total deductions.d. Net pay for
When employees are paid, what amount is credited to Cash in Bank?
Morrison Distribution Center offers warehousing services. The company is considering adding a third shift with 12 new employees. Estimate the third shift payroll costs assuming: (1) The average
Suppose that you are an accounting clerk at Cybercafé. The business owner wants you to use employees’ 401(k) withholdings to pay off a pressing debt. She believes she can replace the funds within
As the senior payroll clerk for Fashion Square Gift Shop, you are to explain the deductions from employees’ payroll checks at a new employee orientation.1. Prepare an outline and visuals of the
a. Which payroll taxes are expenses to the business?b. On what amount are the employer’s FICA taxes computed?
The form that accompanies the payment of taxes to the federal government is aa. Form W-2.b. Form 8109.c. Form 940.d. Form 941.
Why do employees’ paycheck deductions become liabilities of the business?
The following list includes several payroll-related items used in preparing the weekly payroll for Outdoor Adventures. These items are included in either the entry to record the payroll or the entry
People with self-management skills can set attainable goals and motivate themselves.ON THE JOBAs a payroll clerk, you process all payroll and tax reports. It is December. What do you need to do now
a. How is the employer’s share of FICA tax calculated?b. The share of both the employer’s and employee’s FICA tax is calculated using the same percentages, but the amount for each can differ
The account payroll taxes expense is used fora. Recording employees’ federal income taxes withheld.b. Recording employees’ social security and Medicare taxes. c. Recording the employer’s
Suppose that a business is located in a state that has an income tax. The business allows employees to take deductions for U.S. savings bonds. List the payroll liability accounts this business would
The following account balances appear in the general ledger for Soap Box Laundry on April 30.Instructions Record the payment of the four liability accounts on page 34 of the general
Dutch sociologist Geert Hofstede interviewed thousands of employees worldwide to understand their cultures and values. One value dimension he studied was individualism—emphasis on the individual
a. What is the journal entry to record the FUTA tax expense?b. The amount of the FICA tax deposit is twice as much as the employer’s FICA tax expense. Why?
Until the amounts withheld from employee salaries are paid by the employer, they are recorded asa. Assets.b. Liabilities.c. Salary expense.d. Revenue.
Predict what might happen to the Social Security Tax Payable account balance if the Salaries Expense entry was posted but the Payroll Tax Expense entry was never posted.
You may have wondered how your employer pays the taxes and other deductions from your paycheck.PERSONAL FINANCE ACTIVITY Ask your friends what deductions are taken from their paychecks
Based on this payroll register, record the appropriate journal entry in your working papers. Use page 14 in the general journal. PAY PERIOD ENDING May 19 DATE OF PAYMENT May 19,
The Outback Guide Service payroll register for the week ending Dec. 31 follows: Instructions In your working papers:1. Record the entry for the payment of the payroll on page 15 of the
Design a diagram that shows FICA taxes from the payroll date through the tax deposit date.
Employee benefits might include paid vacations and health insurance. Many employers calculate the cost of bene fits as a percentage of total salaries.INSTRUCTIONS Use the payroll register on
Showbiz Video completed the following payroll transactions during the first two weeks of December. Showbiz Video pays its employees on a biweekly basis (every two weeks).Instructions In your
For each of the total gross earnings amounts recorded in the past five pay weeks for Hot Suds Car Wash, determine these taxes:• employer’s FICA taxes (social security 6.2%, Medicare 1.45%)•
Employers must deposit payroll taxes before they file the payroll tax returns. Do you agree with this practice? Why or why not?

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