ACC 302 Midterm Exam Questions and
Correct Answers
Which of the following is not a correct statement about sales taxes?
a. Sales taxes are an expense of the seller.
b. Many companies record sales taxes in the sales account.
c. If sales taxes are included in the sales account, the first step to find the amount of
sales taxes is to divide sales by 1 plus the sales tax rate.
d. All of these are true.
a. sales taxes are an expense of the seller
An employee's net (or take-home) pay is determined by gross earnings minus amounts
for income tax withholdings and the employee's
a. portion of FICA taxes and unemployment taxes.
b. and employer's portion of FICA taxes, and unemployment taxes.
c. portion of FICA taxes, unemployment taxes, and any voluntary deductions.
d. portion of FICA taxes and any voluntary deductions.
d. portion of FICA taxes and any voluntary deductions.
During the month of June, Rowling Boutique had cash sales of $532,200 and credit sales
of $755,700, both of which include the 6% sales tax that must be remitted to the state by
July 15. The adjusting entry that should be recorded to fairly present the June 30
financial statements is to
a. debit cash $77,274 and credit sales tax payable $77,274.
, b. debit sales $77,274 and credit sales tax payable $77,274.
c. debit cash $72,900 and credit sales tax payable $72,900.
d. debit sales $72,900 and credit sales tax payable $72,900.
d. debit sales $72,900 and credit sales tax payable $72,900.
The total payroll of Teeter Company for the month of October, 2016 was $360,000, of
which $90,000 represented amounts paid to certain employees who earned in excess of
$118,500. $300,000 represented amounts paid to employees who earned in excess of the
$7,000 maximum subject to unemployment taxes. $90,000 of federal income taxes and
$9,000 of union dues were withheld. The state unemployment tax is 1%, the federal
unemployment tax is .8%, and the current F.I.C.A. tax is 7.65% on an employee's wages
to $118,500 and 1.45% in excess of $118,500. What amount should Teeter deduct from
employees' total payroll?
a. $120,960.
b. $113,040.
c. $23,040.
d. $28,440.
a. $120,960.
Which of the following does not demonstrate evidence regarding the ability to
consummate a refinancing of short-term debt?
a. Management indicated that they are going to refinance the obligation.
b. Actually refinance the obligation.
c. Have capacity under existing financing agreements that can be used to refinance the
Correct Answers
Which of the following is not a correct statement about sales taxes?
a. Sales taxes are an expense of the seller.
b. Many companies record sales taxes in the sales account.
c. If sales taxes are included in the sales account, the first step to find the amount of
sales taxes is to divide sales by 1 plus the sales tax rate.
d. All of these are true.
a. sales taxes are an expense of the seller
An employee's net (or take-home) pay is determined by gross earnings minus amounts
for income tax withholdings and the employee's
a. portion of FICA taxes and unemployment taxes.
b. and employer's portion of FICA taxes, and unemployment taxes.
c. portion of FICA taxes, unemployment taxes, and any voluntary deductions.
d. portion of FICA taxes and any voluntary deductions.
d. portion of FICA taxes and any voluntary deductions.
During the month of June, Rowling Boutique had cash sales of $532,200 and credit sales
of $755,700, both of which include the 6% sales tax that must be remitted to the state by
July 15. The adjusting entry that should be recorded to fairly present the June 30
financial statements is to
a. debit cash $77,274 and credit sales tax payable $77,274.
, b. debit sales $77,274 and credit sales tax payable $77,274.
c. debit cash $72,900 and credit sales tax payable $72,900.
d. debit sales $72,900 and credit sales tax payable $72,900.
d. debit sales $72,900 and credit sales tax payable $72,900.
The total payroll of Teeter Company for the month of October, 2016 was $360,000, of
which $90,000 represented amounts paid to certain employees who earned in excess of
$118,500. $300,000 represented amounts paid to employees who earned in excess of the
$7,000 maximum subject to unemployment taxes. $90,000 of federal income taxes and
$9,000 of union dues were withheld. The state unemployment tax is 1%, the federal
unemployment tax is .8%, and the current F.I.C.A. tax is 7.65% on an employee's wages
to $118,500 and 1.45% in excess of $118,500. What amount should Teeter deduct from
employees' total payroll?
a. $120,960.
b. $113,040.
c. $23,040.
d. $28,440.
a. $120,960.
Which of the following does not demonstrate evidence regarding the ability to
consummate a refinancing of short-term debt?
a. Management indicated that they are going to refinance the obligation.
b. Actually refinance the obligation.
c. Have capacity under existing financing agreements that can be used to refinance the
