Test 2 on Chapters 4 & 9 multiple choice

Question 1
In the reconciliation process the unrecorded bank service charge is:

Answer: Deducted from checkbook balance

Question 2
Which of the following results in crediting the checkbook balance?

Answer:       
Interest earned

           
Question 3
The checkbook balance of Lester Co. is $922.55. The bank statement reveals a balance of $3,881.14. The bank statement showed interest earned of $77, a service charge of $38.22, along with a deposit in transit of $9,555.88. Outstanding checks totaled $6,142.88. The bookkeeper in further analyzing the bank statement noticed a collection of a note by bank for $6,815.00. Lester Co. forgot to deduct a check for $482.19 during the month. The reconciled balance is:

Answer:       
$7,294.14

           
Question 4   
Electronic funds transfer:

Answer:       
Does not use paper checks

           
Question 5
An unrecorded credit memo for collection of a note should be:
            
Answer:       
Added to checkbook balance

           
Question 6
 On December 31 the checkbook balance of Ray Co. was $5,420.95. The bank statement balance showed $5,102.88. Checks outstanding totaled $813.53. The statement did not show a deposit in transit of $1,102.95. Check charges were $15.88. The company earned interest income of $29.32 that was shown on the report. The bookkeeper forgot to record a check for $42.09. The reconciled balance is:

Answer:       
$5,392.30

           
Question 7
The bank statement of July 31 for Savon Co. showed a balance of $6,008.10 while the checkbook showed a balance of $1,900.40. The bookkeeper of Savon Co. noticed from the bank statement the bank had collected a note for $666.66. There was a deposit in transit made on July 1 for $1,100.10 along with the outstanding checks of $4,580.54. Check charges were $39.40. The reconciled balance is:
            
Answer:       
$2,527.66

           
Question 8   
The bank statement of Ali Co. indicated a current balance of $32,900.10. The current checkbook balance indicated a balance of $34,509.11. In the reconciliation process a deposit in transit for $6,821.11 was discovered. Check number 600 for $3,988.33 was outstanding. The statement also revealed a NSF of $110.11 along with interest earned by Ali of $1,333.88. The reconciled balance is:

Answer:       
$35,732.88

           
Question 9
The process of analyzing the differences between the bank statement balance and the checkbook balance is:

Answer:       
Bank reconciliation

           
Question 10   
Jane Co. checkbook currently has a balance of $295.10. The bank statement shows a balance of $205.10. The statement revealed interest income of $10.03 along with check charges of $2.95. Jane recorded a $200 check as $150. Deposits in transit were $402.80. Check numbers 85, 88 and 92 for $90.80, $108.10, and $156.82 were not returned with the statement. The reconciled balance is:

Answer:       
$252.18

           
Question 11
Outstanding checks:
   
Have not been received by bank for processing

           
Question 12
The beginning checkbook balance of Shelley Co. is $5,559.10. Her bank statement showed a bank balance of $7,888.44. The bookkeeper of Shelley Co. noticed a $111.10 deposit in transit along with check numbers 90 and 97 for $499.88 and $1,256.45 respectively as outstanding. The bank statement credited Shelley's account for $750.99 for a note collected. The bank statement revealed a check printing charge of $66.88. The reconciled balance is:
            
Answer:       
$6,243.21

           
Question 13
Ron Swift earned $1,500 last week. He is married, paid bi-weekly, and claims two exemptions. Using the percentage method (use tables in the handbook) his income tax is:
           
Answer:       
$106.04

           
Question 14
Social Security and Medicare tax:
            
Answer:       
Have different rates

           
Question 15
To date, Jay Ward has a cumulative earnings of $95,000. This week he is paid $3,000. The total amount of Social Security Tax for this week is: (Assume a rate of 6.2% on $97,500 for Social Security and 1.45% for Medicare).
           
Answer:       
$155.00

           
Question 16
The more allowance claimed on Form W-4 means:

Answer:       
Less money deducted for FIT

           
Question 17
Lana Powell has cumulative earnings of $97,400 at the end of September. In the 1st week in October she earns $2,000. The amount deducted for Social Security and Medicare from her check is: (Assume Social Security rate of 6.2% on $97,500 and Medicare of 1.45%).

Answer:       
$35.20

           
Question 18
Leo Corporation pays its employees on a graduated commission scale: 6 percent on 1st $40,000 sales; 7% on sales above $40,000 to $80,000; and 9 percent on sales greater than $80,000. Bernie Kaminsky had sales of $105,000. His commission is:
       
Answer:       
$7,450

           
Question 19
Lee Wong is a sales clerk at Sears. She is paid $8.00 per hour plus a commission of 4 percent on all sales. Assuming Lee works 39 hours and has sales of $4,000, her gross pay is:

Answer:       
$472

           
Question 20
Jill Hartman earns $750 per week plus 3 percent of sales in excess of $6,500. If Jill sells $25,000 in 1st week, her earnings are:

Answer:       
$1,305

           
Question 21
The taxable earnings column of a payroll register records:

Answer:       
what wages will be taxed.

           
Question 22  
Percentage method tables can show:
            
Answer:       
All of these

           
Question 23
Bill Burne's earnings are subject to deductions for Social Security, Medicare and FIT. To date his cumulative earnings is $97,400. This week Bill earns $1,200. Bill, who is married, is paid weekly and claims 3 exemptions. Assume Social Security rate is 6.2% on $97,500 and 1.45% for Medicare. His net pay for the week is: (use percentage table in handbook to calculate FIT)

Answer:       
$1,066.44

           
Question 24
If you are paid twice a month, you are being paid:

Answer:       
Semimonthly

           
Question 25
Jim Smith is a salesman who receives a $1,100 draw per week. He receives a 12 percent commission on all sales. Sales for Jim were $205,000 for the month. Assuming a 4-week month, Jim's commission after the draw is:

Answer:
$20,200