Accounts Payable Test
Who typically calculates the tax liability to be paid?
a. The State government, which informs the company what is owed
b. The Accounts Payable staff
c. The CFO
d. The General or Tax Accountant within the company
Lime & Co.’s payroll for the month ended January 31,2007 is summarized as follows: Total wages $10000 Federal income tax withheld $1200 All wages paid were subject to FICA. FICA tax rates were 7% each for the employees and the employer. The company remits payroll taxes on the 15th of the following month. In its financial statements for the month ended January 31, 2007, what amounts should it report as total payroll tax liability and as payroll tax expense?
a. $1200 $1400
b. $1900 $1400
c. $1900 $700
d. $2600 $700
When are sales & use taxes due?
a. The date varies from State to State
b. On the 15th of every month
c. Annually, on the same date as federal taxes
d. Quarterly, on the 15th of the following month
Of the following, which is a typical situation involving a deposit?
a. The company uses a recruiting firm to find key employees
b. In order to buy office supplies, the company has to put a deposit down
c. The business has leased a new location and is required to put a deposit for the last month’s rent
d. Federal taxes for the upcoming year
The correct journal entry to record a purchase of inventory on credit using a perpetual inventory system includes:
a. debit Cost of Goods Sold, credit Inventory
b. debit Accounts Payable, credit Inventory
c. debit Accounts Receivable, credit Sales Revenue
d. debit Inventory, credit Accounts Payable
A bill is a form on which you record details of _________ .
a. the sales made
b. the expenses incurred
c. a purchase made by a vendor to whom the Company owe money
d. the income accrued
If a prepaid expense is expiring (the final month is expensed), and the company has not received an invoice for the upcoming prepaid period, the accounting should:
a. Continue to book the monthly expense in the upcoming month and contact the company to find if an invoice will be issued for the coming year
b. Do not book the monthly expense and assume your company is no longer in business with the company
c. Send an email to the CFO
d. Delete the line from Excel and assume no further expense
Why do companies require deposits & advances?
a. They don’t trust the customers to pay
b. It improves cash flow, especially for long duration projects
c. They want to make sure customers have money to pay
What level of detail should invoices contain?
a. Summary, only the total due
b. Totals by item
c. Totals by date
d. Specific details – dates, quantities, individual pricing