1) Every business is required to withhold amounts from an employee’s gross pay. These amounts are called:

Select one:

a. Statutory deductions

b. Required deductions

c. Voluntary deductions

d. Obligatory deductions

2) Payroll accounting involves which of the following types of payroll liabilities:

Select one:

a. Employer payroll contributions

b. Amounts deducted from employee paychecks and owed to the government or other organizations

c. All of the available choices

d. Net pay owed to employees

3) Marcus Corp. signed a note payable with Ryan Company on January 1, 2020. Marcus borrowed $3,000 from Ryan at a rate of 5%. Both interest and principal are payable on June 30, 2020. The journal entry to record the note on January 1, 2020 for Marcus Corp. is:

Select one:

a. Debit Note Payable $3,000; Credit Cash $3,000

b. Debit Cash $3,000; Credit Note Payable $3,000

c. Debit Cash $3,075; Credit Note Payable $3,075

d. Debit Note Payable $3,075; Credit Cash $3,075

4) Which of the following statement is incorrect?

Select one:

a. If the likelihood of the future event is remote (unlikely), and if the amount is not significant, the contingent liability is either recorded in the accounting records or disclosed in the notes to the financial statements.

b. If the likelihood of the future event is probable and the amount of the liability is estimable, the contingent liability is recorded in a journal entry and disclosed in the notes to the financial statements.

c. If the likelihood of the future event is probable but the amount of the liability is not estimable, the contingent liability is disclosed in the notes to the financial statements according to the principle of full disclosure.

d. If the likelihood of the future event is reasonably possible, the contingent liability is disclosed in the notes to the financial statements according to the principle of full disclosure.

5) Liabilities for which exact terms are not precisely known and cannot be determined until future events occur are:

Select one:

a. Judicable liabilities

b. Deductive liabilities

c. Non-determinable liabilities

d. Determinable liabilities

6) Provincial sales tax paid on purchased items:

Select one:

a. None of the available choices

b. Is collected in the Sales Taxes Paid account and the business files a claim to recover the amount at year end

c. Is recorded in the Sales Tax Payable account to reduce the amount of sales tax remitted to the government

d. Is added to the value of the asset or expense

7) Sales tax collected:

Select one:

a. Belongs to the customer

b. Belongs to the government

c. Is a type of revenue that is reported on a company’s annual income tax.

d. Belongs to the business, but the government claims part of it.

8)Short-term notes payable can be issued for different reasons, which includes:

Select one:

a. All of the available choices

b. To serve as a tender of payment

c. To borrow from a bank

d. To extend credit terms

9) Payment received for services to be provided in the future is called:

Select one:

a. Unearned Revenue

b. Prepaid Revenue

c. Earned Revenue

d. Excess Revenue