Credits increase liabilities (such as amounts withheld but not paid), decrease assets and decrease expenses. Debits increase assets (such as a deposit to the payroll checking account), decrease liabilities (such as when a liability is paid), and increase expenses (such as wages paid to an employee).
For more information, refer to Module 9, Lesson 1
Which of the following transactions is posted as a credit?
- State income tax withheld, posted to the liability account – Correct Answer
- Gross pay, posted to an expense account
- A deposit to the payroll checking account, posted to the payroll checking account
- A mortgage payment, posted to the liability account
**
Accrued tax liabilities are recorded as a credit in a tax liability account until paid.
For more information, refer to Module 9, Lesson 3
A company withheld federal income, social security, and Medicare taxes in the amount of $65,498.00. Until deposited, the $65,498.00 will be:
- accrued as a credit in a tax liability account. – Correct Answer
- accrued as a debit in the tax expense account.
- reversed as a debit in a tax liability account.
- reversed as a credit in the tax expense account.
Withheld Federal Income
**
The repayment of overpaid wages by an employee impacts both accounting and tax records.
For more information, refer to Module 9, Lesson 4
The repayment of overpaid wages by an employee impacts:
- accounting and tax records. Correct Answer
- monthly totals of the payroll register.
- electronic funds transfers.
- end-of-month balances.
**
The journal entry recording the deposit of accrued tax liabilities is recorded as a debit in a tax liability account and a credit to the asset account cash.
For more information, refer to Module 9, Lesson 3
On payday, a company has accumulated a $3,600.00 federal income tax liability. When the taxes are deposited, the journal entry is to:
- debit accrued taxes payable; credit federal tax expense.
- debit cash; credit federal income tax payable.
- debit federal income tax payable; credit cash.- Correct Answer
- debit federal income tax payable; credit accrued taxes payable.
**
Accounts are listed on a typical balance sheet beginning with assets, followed by liabilities, then equity (net worth).
For more information, refer to Module 9, Lesson 1
What is the order of accounts that are listed on a typical balance sheet?
- assets, liabilities, equity- Correct Answer
- equity, assets, liabilities
- liabilities, assets, equity
- assets, equity, liabilities
**
Debits increase assets (such as deposits to the payroll checking account) and decrease liabilities. Credits increase liabilities (such as taxes or expenses not yet paid) and decrease assets (such as the payment of employees).
For more information, refer to Module 9, Lesson 1
What transaction is posted as a debit?
- Payroll tax liability of $55,000.00, posted to the liability account
- $6,000.00 liability for medical insurance premiums withheld, posted to the liability account
- $250,000.00 deposit, posted to the payroll checking account- Correct Answer
- Payroll checks issued to employees, posted to the payroll checking account
**
In a journal entry, credits decrease assets (such as the payroll checking account). Debits decrease liabilities (such the payment of a mortgage) and increase expenses (such as the employee’s wages).
For more information, refer to Module 9, Lesson 1
Which of the following journal entries is posted as a credit?
- $250,000.00 gross pay, posted to an expense account
- $10,000.00 mortgage payment, posted to the liability account
- $250,000.00 deposit posted to the payroll checking account
- $15,000.00 in payroll checks issued to employees, posted to the payroll checking account – Correct Answer
**
On the balance sheet, assets are listed in the order in which they can be most readily converted into cash.
For more information, refer to Module 9, Lesson 1
Of the following accounts, which would most likely be listed first on the balance sheet?
- Buildings and other property
- Land and improvements
- Investments in subsidiary companies
- Cash – Correct Answer
**
The reconciliation of the general ledger checks the posting of payments to employees verifies the withholding and depositing of taxes and compares the account balances in the general ledger to the amount of taxes withheld.
For more information, refer to Module 9, Lesson 4
When checking the general ledger periodically, all the following procedures are used EXCEPT:
- reversing the payroll accrual entry. – Correct Answer
- ensuring that employee paychecks are posted correctly.
- comparing general ledger accounts to the records for taxes withheld and paid.
- verifying the correct amount of taxes are withheld, deposited, and reported on time.
**
The correct answer is: $220,000.00
To calculate a company’s owner’s equity, subtract liabilities (current and long term) from assets (current, property, and intangibles).
For more information, refer to Module 9, Lesson 2
A company has current assets of $210,000.00, other assets of $200,000.00, revenue of $670,000.00, expenses of $650,000.00, current liabilities of $80,000.00, and long-term liabilities of $110,000.00. What is the company’s owner’s equity?
**
The journal entry recording the liability for accrued vacation is recorded as a debit in a vacation accrued expense account and a credit to the accrued vacation liability account.
For more information, refer to Module 9, Lesson 3
A company accrues 105 days of vacation time for its employees valued at $9,665.00. When earned, it is accrued as a:
debit to a liability account.
credit to an expense account.
debit to a cash account.
debit to an expense account. . – Correct Answer
**
Internal control procedures require reconciliation of the payroll bank account should be accomplished outside of the payroll department. Generating the direct deposit file, processing deductions, and reporting payroll data are the responsibility of the payroll department.
For more information, refer to Module 9, Lesson 4
A Payroll Administrator responsible for regularly processing payroll may be responsible for all of the following duties, EXCEPT:
- processing payroll deductions.
- reporting payroll data.
- reconciling the payroll bank account. – Correct Answer
- generating direct deposit files.
**
In a journal entry, debits increase expense accounts (such as wage expense). In a journal entry, credits increase liabilities (such as withheld taxes) and decrease assets (such as the payroll checking account).
For more information, refer to Module 9, Lesson 1
Which of the following journal entries is posted as a debit?
- $5,000.00 paycheck, posted to the cash account
- $8,000.00 off-cycle check, posted to the asset account
- $250,000.00 gross payroll, posted to an expense account. – Correct Answer
- $1,000.00 state income tax withheld, posted to the liability account
**
On the balance sheet, items are listed in the order: assets, liabilities, stockholders’ equity.
For more information, refer to Module 9, Lesson 1
Of the following accounts, which would most likely be listed first on the balance sheet?
- Common stock
- Payroll tax payable
- Accounts Receivable– Correct Answer
- Salary expense
**
Liabilities are listed on the balance sheet as current liabilities are those required to be paid in the next 12-month period (such as wages and taxes payable. The mortgage payments required to be made more than 12 months in the future and a two-year note are long term liabilities. Depreciation is an asset account that reduces the value of the asset.
For more information, refer to Module 9, Lesson 1
Which account is listed as a current liability on the balance sheet?
- Depreciation
- Accrued taxes– Correct Answer
- Mortgage on plant
- Two-year note
**
