Question

In: Accounting

Either the gross method or net method may be used to record sales with cash discounts,...

Either the gross method or net method may be used to record sales with cash discounts, but the net method requires a period-end adjusting entry to estimate expected future sales discounts taken. True or False

Under FIFO, the most recent costs are assigned to ending inventory.   True or False

Installment accounts receivable is another name for aging of accounts receivable. True or False

An employee earned $62,500 during the year working for an employer. The FICA tax rate for Social Security is 6.2% of the first $128,400 of employee earnings per calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee’s pay. What is the amount of total unemployment taxes the employee must pay?

  • $434.00

  • $56.00

  • $0.00

  • $378.00

  • $101.50

Solutions

Expert Solution

Answer 1
FALSE
Gross method requires a period-end adjusting entry to estimate expected future sales discounts taken.
Either the gross method or net method may be used to record sales with cash discounts, but the gross method requires a period-end adjusting entry to estimate expected future sales discounts taken.
Answer 2
TRUE
As per the FIFO method, older costs are assigned to the cost of goods sold and the newest costs are assigned to the ending inventory.
Answer 3
FALSE
Installment accounts receivable means the payment term set by the vendors to the customer on a monthly basis payment.
aging of accounts receivable is the behavior if a customer to pay their due on time or after how many months.
Installment accounts receivable and aging of accounts receivable both are different concepts.
Answer 4
What is the amount of total unemployment taxes the employee must pay? (answer = $0)
The employer must be liable to pay total unemployment taxes (SUTA + FUTA). Therefore, the employee is not liable to pay any amount for unemployment taxes.
SUTA stands for State Unemployment Tax Act
FUTA stands for Federal Unemployment Tax Act

ekkarill92 answered 1 year ago
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