Deck 15: Personal Taxes, Payroll, and Financial Statements

Question 1

Assets - Liabilities = Proprietorship.

Answer 1

True

Question 2

Occupational expenses, also called the cost of ownership, are those that continue whether or not the restaurant is operating.

Answer 2

True

Question 3

There are situations in the food service industry where an employee is paid a salary plus a commission.

Answer 3

True

Question 4

Amount of sales ÷ Percent of commission = Amount of commission.

Question 5

State taxes are established and enforced by federal law so that each individual citizen pays what he or she properly owes to support the functions financed by the federal government.

Question 6

The gross margin or gross profit is found by subtracting the cost of food sold from the total sales.

Question 7

The formula to determine the break-even point is to take the fixed costs and divide them by the contribution rate percentage.

Question 8

The contribution rate percentage is calculated by multiplying the contribution rate by the sales.

Question 9

Under the terms of the Social Security Act, the employer is required by law to deduct a certain percentage of the employee's wages each payday and remit the amount deducted to the state government.

Question 10

Percentage of cost of food sold plus percentage of gross margin will equal 100%.

Question 11

Variable cost is the changeable cost or expenses that will increase or decrease with the level of sales volume.

Question 12

In a budget, the areas listed under the two major components, income and assets, will vary, depending on the size of the overall operation.

Question 13

Depreciation is the act of replacing an item as it wears out.

Question 14

A budget can be made up whenever the food service operator wants to know the business's financial situation or feels it necessary to review the financial situation.

Question 15

Your state income tax is not taxable if the money was earned in another state.

Question 16

Sales - Cost of food sold = Gross margin.

Question 17

Accounts payable refers to money that is owed to the company by various people or companies for various reasons.

Question 18

The profit and loss statement is a summary or report of the business operation for a given period of time.

Question 19

Because taxes affect you, the employee, as they show up in the form of deductions on your paychecks, it is important to learn as much as possible about them.

Question 20

If an employee does not earn enough money to pay taxes, he or she must file an income tax return to get the money back that was withheld by his or her employer for taxes.

Question 21

Which of the following is considered a state tax?

A) Personal Property Tax
B) Various Licenses
C) Real Estate Tax
D) Occupational Tax

Question 22

Which of the following is an example of a primary expense?

A) overtime wages
B) FICA
C) telephone service
D) charge accounts

Question 23

Calculate the following problems concerning Social Security tax. Round answers to the nearest cent. The catering manager of the Gourmet Catering Company works on a % commission of total sales for each week. During the first week in June total sales were $19,800. How much Social Security tax did she pay if the rate is 7.30%? $_______________

Question 24

_____ are the amount of money you earn before any deductions (the amount taken away) are made.

A) Net wages
B) Gross wages
C) Social Security taxes
D) Employee's withholding taxes

Question 25

The _____ is a summary or report of the business operation for a given period of time.

A) budget
B) income statement
C) FICA
D) profit and loss statement

Question 26

The manager of the food concession at the local swimming club receives a small weekly salary of $130, plus a commission of 5.5% on all food sales for the week. Last week, the food sales amounted to $4,877. What was her gross wage for the week? $_______________

Question 27

There are two major _____ that must be prepared and are essential to the operation of a business: the profit and loss (income) statement, sometimes referred to as the P&L sheet, and the balance sheet.

A) financial statements
B) tax forms
C) charge accounts
D) budgets

Question 28

The preparation cook at The Home Kitchen Catering Company receives a salary of $437 per week, plus a commission of 1.4% on all the catered party business. In a recent week, the catered party business amounted to $14,400. Deducted from her gross wages were the following: FICA tax $65.55, federal withholding tax $131.10, and city income tax $13.11. What was her net pay? $_______________

Question 29

_____ is the changeable cost or expenses that will increase or decrease with the level of sales volume.

A) Variable cost
B) A property tax
C) The inventory
D) Fixed cost

Question 30

____________________ ____________________ are taxes collected by the federal government.

Question 31

Which of the following is not considered a federal tax?

A) Personal Property Tax
B) Employee's Withholding Tax
C) Income Tax
D) Social Security

Question 32

The _____ is the amount of money that is left after the variable costs are subtracted from the sales.

A) total variable profit
B) contribution rate
C) gross profit
D) total sale

Question 33

The balance sheet is a necessary part of any business operation, almost as important as the profit and loss statement. It is a statement listing all the following except :

A) auto loan
B) supplies
C) depreciation
D) kitchen equipment

Question 34

The letters FICA stand for the _____, which became law in 1935.

A) Federal Insurance Contributions Act
B) Federal Indemnity Contributions Act
C) Federal Insurance Charity Act
D) Fixed Insurance Contributions Act

Question 35

Which of the following is not considered a local tax?

A) Employee's Withholding Tax
B) Real Estate Tax
C) FICA
D) Personal Property Tax

Question 36

_____ is money withheld from each employee's paycheck during the year to pay for the income tax that he or she owes the federal government at the end of the year.

A) Employee's Withholding Tax
B) Personal Property Tax
C) Income Tax
D) Social Security

Question 37

Which of the following is not an example of an expenditure?

A) rent
B) fringe benefits
C) workmen's compensation
D) labor cost

Question 38

The catering manager at Elegant Fare Catering Company receives a basic salary of $1,070 per month, plus a 2% commission on all the catered business. Last month, the catered business amounted to $31,700. What was her gross wage? $_______________

Question 39

Calculate the following problems concerning Social Security tax. Round answers to the nearest cent. A waiter at the Golden Gate Restaurant is paid a salary of $383 per week, plus tips. During the first week of July his tips amounted to $328. Assuming that the Social Security tax rate is 7.30%, how much FICA tax was deducted from his earnings for that week? $_______________

Question 40

_____ is extremely important to any business operation when financial planning decisions must be made.

A) The cost of food sold
B) Planning profits
C) Paying taxes
D) Advertising

Question 41

____________________ ____________________ refers to money that is owed to the company by various people or companies for various reasons.

Question 42

The ____________________ ____________________ or gross profit is found by subtracting the cost of food sold from the total sales.

Question 43

____________________ stands for the Federal Insurance Contributions Act, which became law in 1935 and established the Social Security system and tax.

Question 44

A ____________________ ____________________ is defined as the time between one yearly settlement of financial accounts and another.

Question 45

____________________ ____________________ taxes are paid to the federal government for the purpose of retirement benefits.

Question 46

A(n) ____________________ ____________________ is the instrument used in a business operation to let management know its exact financial position.

Question 47

After paycheck deductions are made, the resulting pay is called ____________________ pay.

Question 48

____________________ is the act of lessening the value of an item as it wears out.

Question 49

____________________ ____________________ tax is money withheld from each employee's paycheck by the employer during the year for the purpose of paying the employee's state income tax at the end of the calendar year.

Question 50

____________________ ____________________ ____________________ are the sum of all the expenses incurred during the period or month that the P&L statement covered.

Question 51

The ____________________ ____________________ ____________________ is money withheld from each employee's paycheck during the year to pay for the income tax that he or she owes the federal government at the end of the year.

Question 52

____________________ ____________________ are collected for the purpose of operating all the state functions and agencies.

Question 53

____________________ ____________________ is found by subtracting total operating expenses from gross margin.

Question 54

The ____________________ ____________________ ____________________ ____________________ is a summary or report of the business operation for a given period of time.

Question 55

____________________ ____________________ is the amount of money one earns before any deductions are made.

Question 56

The ____________________ ____________________ is a statement listing all the company's assets and liabilities to determine net worth, proprietorship, or capital.

Question 57

The term ____________________ means "that which is paid or received for services" and includes salaries, commissions, fees, bonuses, tips, and so forth.

Question 58

The main source of income for operating the federal government is obtained from ____________________ ____________________, levied on the income of individuals and corporations.

Question 59

A ____________________ is generally a percentage of sales for a given period.

Question 60

The ____________________ ____________________ contains a record of all income and expenses.

Question 61

____________________ ____________________ is the sales revenue minus variable costs.

Question 62

Each food service operator must know how to determine the amount of sales dollars needed to show a profit or a loss. This is referred to as the ____________________ ____________________ ____________________.

Question 63

Adding together the cost of goods sold and the serving expenses results in the ____________________ cost.

Question 64

The contribution rate percentage is calculated by dividing the contribution rate by the ____________________.

Question 65

The ____________________ ____________________ is the amount of money that is left after the variable costs are subtracted from the sales.

Question 66

____________________ ____________________ ____________________ is a mathematical method for finding the dollar amount needed for a food service operation to break even.

Question 67

____________________ is a plan for adjusting expenditures to probable income for a calendar or fiscal year.

Question 68

____________________ ____________________ refers to money the food service operation owes for purchases made.

Question 70

____________________ ____________________ ____________________ calculates the level of economic activity where the operation neither makes a profit nor incurs a loss.

Question 71

____________________ expenses are additional expenses incurred as a result of serving customers.

Question 73

Total variable profit is calculated by subtracting the variable cost from ____________________ ____________________.

Question 74

____________________ expenses, also called the cost of ownership, are those that continue whether or not the restaurant is operating.

Question 75

____________________ cost is the changeable cost or expenses that will increase or decrease with the level of sales volume.

Question 76

In a budget, the areas listed under the two major components, ____________________ and expenditures, will vary, depending on the size of the overall operation.

Question 77

____________________ expenses are expenses such as utilities, basic staff (preparation, service, etc.), telephone service, repairs and maintenance, licenses, and exterminating costs.

Question 78

____________________ ____________________ is the expense that remains constant, regardless of the amount of goods that are sold.

Question 79

____________________ ____________________ is the money received from the sale of all products, food, beverages, and so forth.

Question 80

Examples of ____________________ expenses are replacement costs for china, laundry, paper supplies, and payroll or labor costs.