Which of the following deductions is a required deduction?Name ________________________ POINTS POINTS PROBLEM POSSIBLE RECEIVED 1 10 2 20 3 20 4 20 TOTAL 70 Problem #1 (10 points) 1.
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Name ________________________ POINTS POINTS PROBLEM POSSIBLE RECEIVED 1 10 2 20 3 20 4 20 TOTAL 70 Problem #1 (10 points) 1. Interest expense should be recorded in the period: a. that the expense is incurred b. a note payable is recorded c. when the note is paid d. on the date that the note is issued 2. Which of the following deductions is a required deduction? a. Charitable contributions b. Income taxes c. Insurance premiums d. Union dues 3. Which payroll tax is “shared” by both the employer and employer? a. State unemployment tax b. Federal income tax c. Social security tax d. Federal Unemployment 4. Which of the following is a characteristic of a current liability? a. A current liability is a liability that is due within 30 days. b. A current liability is a liability that is due within one year or one operating cycle, whichever is longer. c. A current liability is a liability that is due within 10 days. d. A current liability is a liability that is due in longer than a one-year period, or one operating cycle. 5. Which of the following principles requires that warranty expense be recorded in the period that revenue is recorded? a. Consistency principle b. Matching principle c. Revenue principle d. Materiality concept PROBLEM #2 (20 Points) Marty’s German Restaurants incurred salary expense of $70,000 for 2012. The payroll expense includes employer FICA tax of 7.65%, in addition to state unemployment tax of 5.4% and federal unemployment tax of .8%. Of the total salaries, $15,000 is subject to unemployment tax. Also, the company provides the following benefits for employees health insurance (cost to the company $3050), life insurance (cost to the company, $400), and retirement benefits (cost to the company, 5% of salary expense.) Directions: Journalize Marty’s…
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