Question

1 False When an asset is purchased at a time other than the beginning of an accounting period, depreciation is recorded for the whole year and then no depreciation in the year of disposal is taken

2-------- Useful life or service life might not be as long as the asset’s total productive life.

3-------- Units-of-production depreciation charges a varying amount to expense for each period of an asset’s useful life depending on its usage.

4-------- Accelerated depreciation method yields less depreciation expenses in the early years of an asset’s life and more depreciation in later years.

5-------- Capital expenditures are additional costs of plant assets that provide benefits extending beyond the current period, thus are added to the book value of the asset.

6------- Payroll deductions, commonly called withholdings, are amounts withheld from an employee’s gross pay by law but not voluntary.

7------ A total of 15.3% is submitted by employers to social security and Medicare for each employee as deduction from their pay check.

8-------- A warranty is a seller’s obligation to replace or correct a product (or service) that fails to perform as expected within a specified period, thus is recorded as a liability.

9------- FUTA requires employers to pay a federal unemployment tax on all salary or wages paid to each employee.

10------- Amounts received in advance from customers for future products or services are recorded as liabilities.

Answer 1

1.	When an asset is purchased at a time other than the beginning of an accounting period, depreciation is recorded for the whole year and then no depreciation in the year of disposal is taken	False
2.	Useful life or service life might not be as long as the asset’s total productive life.	True
3.	Units-of-production depreciation charges a varying amount to expense for each period of an asset’s useful life depending on its usage.	True
4.	Accelerated depreciation method yields less depreciation expenses in the early years of an asset’s life and more depreciation in later years.	False
5.	Capital expenditures are additional costs of plant assets that provide benefits extending beyond the current period, thus are added to the book value of the asset.	True
6..	Payroll deductions, commonly called withholdings, are amounts withheld from an employee’s gross pay by law but not voluntary.	True
7.	A total of 15.3% is submitted by employers to social security and Medicare for each employee as deduction from their pay check. ***	False
8.	A warranty is a seller’s obligation to replace or correct a product (or service) that fails to perform as expected within a specified period, thus is recorded as a liability.	True
9.	FUTA requires employers to pay a federal unemployment tax on all salary or wages paid to each employee.	True
10.	Amounts received in advance from customers for future products or services are recorded as liabilities.	True

*** FICA tax (Social Security and Medicare taxes combined) is 15.3%. Only 50 % is deducted from an employee's gross pay. The other 50 % is borne by the employer.