Week 12 Quiz

A campus bookstore (illustrative) collects tax from customers on a day of sweatshirt sales and has not yet sent it to the state. Which account holds the tax it collected?

Select one.

• Sales Revenue
• Sales Tax Expense
• Sales Taxes Payable
• Unearned Sales Revenue

The bicycle shop's (illustrative) mechanic is paid $24 an hour, is covered by the Fair Labor Standards Act and not exempt, and worked 45 hours in one workweek. What is the mechanic's gross pay?

Select one.

• $1,080
• $1,140
• $1,620
• $960

The mechanic's gross pay for the week is $1,140, well below the 2026 Social Security wage base. At the 2026 rate the Social Security Administration and IRS Publication 15 (2026) state, how much Social Security tax is withheld from the paycheck?

Select one.

• $70.68
• $16.53
• $87.21
• $141.36

The mechanic's gross pay is $1,140. The shop withholds $70.68 of Social Security, $16.53 of Medicare, and an illustrative $95.00 of federal income tax, and it also owes its own matching $87.21. What is the mechanic's net pay?

Select one.

• $1,140.00
• $1,045.00
• $870.58
• $957.79

The shop records the mechanic's weekly payroll: gross pay of $1,140.00, withholdings of $70.68, $16.53, and $95.00, and net pay of $957.79 still owed to the mechanic. Which accounts are credited in this entry? Select all that apply.

Select every option that applies.

• Social Security Tax Payable
• Payroll Tax Expense
• Medicare Tax Payable
• Wages Expense
• Federal Income Tax Payable
• Wages Payable

The shop owes its own matching Social Security of $70.68 and Medicare of $16.53 on the mechanic's wages, $87.21 in all, and will pay it later. Which entry records this?

Select one.

• Debit Wages Expense 87.21; credit Cash 87.21
• Debit Payroll Tax Expense 87.21; credit Social Security Tax Payable 70.68 and Medicare Tax Payable 16.53
• Debit Wages Payable 87.21; credit Social Security Tax Payable 70.68 and Medicare Tax Payable 16.53
• Debit Social Security Tax Payable 70.68 and Medicare Tax Payable 16.53; credit Payroll Tax Expense 87.21 in all

A second employee at the shop has $184,000 of wages this year before a $1,140 paycheck. The 2026 Social Security wage base is $184,500. At the 2026 Social Security rate, how much Social Security tax is withheld from this paycheck?

Select one.

• $70.68
• $0.00
• $31.00
• $39.68

Federal income tax withholding, like Social Security tax, can be found by multiplying gross pay by one flat rate, which is why the course computes the mechanic's $95.00 from a rate.

True or false.

• True
• False

A landscaping company (illustrative) owes $50,000 on a five-year note that it repays at $10,000 a year. How does the note appear on its classified balance sheet?

Select one.

• $10,000 in current liabilities and $40,000 in long-term liabilities
• $50,000 in current liabilities
• $50,000 in long-term liabilities
• $10,000 as an expense this year and $40,000 in long-term liabilities

A customer files a claim against the bicycle shop, saying a repaired bicycle failed on a hill. The shop's lawyer says a loss is reasonably possible but not likely. How does the shop treat the claim?

Select one.

• It records a loss and a liability for the full amount of the claim
• It leaves the claim out of the statements and the notes
• It records a liability for half the amount claimed
• It describes the claim in the notes and records nothing