Question 1

Social Security benefits are paid

Accepted Answer

Social Security benefits can be paid when a person retires, if a person becomes disabled, and to surviving spouses in the event of the person's death. All of these scenarios are covered by Social Security benefits.

Question 2

Examples of voluntary deductions from pay include

Accepted Answer

Both A and C are correct. Voluntary deductions from pay include charitable donations and employee contributions to retirement plans. Local income taxes, on the other hand, are usually mandatory deductions required by the government.

Question 3

Which of the following statements is true about a Roth IRA?

Accepted Answer

Contributions to a Roth IRA are made with after-tax dollars, so they are not deductible on your tax return.

Question 4

The balance shown on the bank statement is $25,304.75. There is one outstanding check for $2,005.53, and one outstanding deposit for $5000.00.  What should the adjusted bank statement balance be on the bank reconciliation?

Accepted Answer

The adjusted bank statement balance is calculated by subtracting the outstanding check and adding the outstanding deposit to the bank statement balance: $25,304.75 - $2,005.53 + $5,000.00 = $28,299.22.

Question 5

A bank reconciliation is a type of

Accepted Answer

A bank reconciliation is a detective internal control because it is used to identify discrepancies between a company's records and its bank statement. It is not a preventative control because it does not prevent errors or fraud from occurring, nor is it a corrective control because it does not correct errors after they have occurred. Similarly, it is not a deductive control because it does not deduct anything from the company's accounts.

Question 6

Overtime pay is

Accepted Answer

Overtime pay is generally for hours worked beyond the standard hours per week (usually 40 hours in many countries) and is typically for workers paid on an hourly wage plan, not for salaried workers who often have fixed incomes regardless of extra hours worked.

Question 7

Electronic funds transfer (EFT) is the use of a computer network to transfer funds from

Accepted Answer

Electronic funds transfer (EFT) can be used for transferring funds from one company to another, a company to an individual, and also from one individual to another. Therefore, option D - "All of the above" - is the correct choice.

Question 8

Match between columns
                        Premises: Imitate or counterfeit for illegal purposes
A process in which a company agrees to pay compensation for loss in return for payments by the individual
A list of the amount of salary, wages, or other payments for work due to employees
A written order to a bank to make a payment using funds from the depositor's bank account
Salary or wages earned before deductions are made
Pay or benefits given for a service or a loss
To verify or check facts or procedures
Payment based on an amount of items sold or produced
Insurance for financial loss due to employee theft or fraud
A name placed on the back of a check that authorizes a bank to cash or deposit the check
Hours worked beyond the set standard hours per week
A type of card used to make payments from a depositor's bank account
The payment for an insurance plan

Accepted Answer

The Answer of compensation and forge and check and endorsement is...

Question 9

A document that shows the earnings and deductions for all employees for the payroll period is

Accepted Answer

A payroll register is a document that summarizes the earnings and deductions for all employees during the payroll period. An employee earnings record is a document that shows an individual employee's earnings and deductions over time, and a wage and tax statement (also known as a W-2) is a document that provides an annual summary of an individual employee's earnings and taxes paid. Therefore, the best answer is B, as it accurately describes the document that shows earnings and deductions for all employees during the payroll period.

Question 10

Which of the following are not detailed on a bank statement?

Accepted Answer

Bank statements typically include automatic withdrawals and the balance on the closing date but do not detail the amount of checks that are outstanding, as these have not yet been processed by the bank.

Question 11

Retirement accounts that are fully paid for by the employer are called

Accepted Answer

Defined benefit pension plans are retirement accounts that are fully paid for by the employer. These plans provide a specified monthly benefit to the employee at retirement, based on a formula that takes into account their years of service and salary history. Unlike other retirement accounts, the investment risk and responsibility is on the employer, not the employee.

Question 12

When preparing a bank reconciliation, you should

Accepted Answer

Outstanding checks and deposits are not added or subtracted directly from the check register balance or bank balance in a bank reconciliation. Instead, the process involves comparing the bank's records (bank statement) with the company's records (check register) to identify any discrepancies. The correct action is to compare the amount of each check with that shown on the bank statement to ensure both records match.

Question 13

The type of internal control to reduce loss of cash due to employee error or theft is a

Accepted Answer

Preventative internal controls are designed to prevent errors or fraud from occurring in the first place. In the case of reducing loss of cash due to employee error or theft, preventative controls might include implementing security measures such as having two employees count cash, requiring regular reconciliations of cash on hand, and limiting access to cash to only authorized employees. Detective controls, on the other hand, are designed to identify errors or fraud after they have occurred, such as monitoring bank statements for unusual transactions. Corrective controls are put in place after errors or fraud have been identified in order to address and resolve the issue, and deductive controls do not pertain to internal controls.

Question 14

Insurance that helps pay for costs such as doctors' bills, medicine, and hospital stays is

Accepted Answer

Health insurance is specifically designed to help pay for costs related to medical care, including doctors' bills, medication, and hospital stays. Life insurance and disability insurance are meant to provide financial protection for other types of expenses or situations, such as covering the costs of funeral expenses or replacing lost income due to a disability.

Question 15

A salesperson is paid $500 per week plus 5 percent commission on sales. The sales for the week were $2,500. What is this person's gross pay for the week?

Accepted Answer

The salesperson's gross pay is calculated as the base pay plus commission: $500 (base pay) + ($2,500 * 5%) = $500 + $125 = $625.

Question 16

Deductions from payroll that are required by law include

Accepted Answer

Federal income tax and contributions to Social Security and Medicare are both required by law to be deducted from payroll. Charitable contributions, while some employers may offer this option, are not legally required to be deducted from payroll.

Question 17

A bank reconciliation is used to

Accepted Answer

A bank reconciliation is used to verify that all deposits made have been recorded by the bank, to verify that all checks were written by authorized persons in the company, and to determine the cash balance at the date of the bank statement. Therefore, all of the given options are correct.

Question 18

Salary or wages earned before deductions are made is called

Accepted Answer

Gross pay is the total amount earned before any deductions, such as taxes or insurance, are taken out. Net pay, on the other hand, is the amount of pay received after deductions have been made. Overtime pay refers to the additional pay earned for working more than the standard number of hours per week, while disability pay is specifically for individuals who are unable to work due to a disability. Therefore, the best choice is B, gross pay.

Quiz 7: Banking and Payroll