FPC Domain 7: Accounting Welcome to your FPC Domain 7: Accounting 1. FPC: Accounting When preparing a payroll reconciliation, what is the impact of identifying unclaimed paychecks on the accounting records? A. Increase in cash and decrease in salaries payable. B. Decrease in cash and increase in salaries payable. C. No impact, as the checks are still outstanding. D. Increase in salaries expense and decrease in cash. None 2. FPC: Accounting Which accounting principle requires payroll expenses to be matched with the revenue they helped earn? A. Going concern principle B. Matching principle C. Revenue recognition principle D. Economic entity assumption None 3. FPC: Accounting What type of account is 'Payroll Tax Expense' and where does it appear? A. Asset on the balance sheet B. Liability on the balance sheet C. Expense on the income statement D. Equity on the statement of owner's equity None 4. FPC: Accounting How should bonuses paid to employees be recorded in the financial statements? A. As a reduction in equity on the balance sheet B. As a liability on the balance sheet until paid C. As an expense on the income statement D. As a receivable on the balance sheet None 5. FPC: Accounting In payroll accounting, what is the double entry for recording the employer's contribution to employee's health insurance? A. Debit Health Insurance Expense, credit Cash B. Debit Cash, credit Health Insurance Expense C. Debit Health Insurance Expense, credit Health Insurance Payable D. Debit Health Insurance Payable, credit Health Insurance Expense None 6. FPC: Accounting Upon discovering an overpayment to an employee due to a payroll processing error, how should the correction be accounted for? A. Debit Salaries Payable, credit Cash B. Debit Cash, credit Salaries Expense C. Debit Salaries Expense, credit Salaries Payable D. Debit Salaries Expense, credit Overpayment Liability None 7. FPC: Accounting What is the purpose of the payroll clearing account? A. To accumulate funds for employee bonuses. B. To reconcile payroll advances made to employees. C. To act as a temporary account to aggregate payroll costs before they are distributed. D. To hold funds withheld for employee taxes until remitted. None 8. FPC: Accounting During a payroll audit, an auditor would expect to find the withholding taxes in which account before remittance? A. Taxes Expense B. Taxes Payable C. Accumulated Taxes D. Withholding Taxes Receivable None 9. FPC: Accounting When an employer incurs a payroll liability for accrued vacation time, how is this recorded in the financial statements? A. Debit Vacation Expense, credit Cash B. Debit Vacation Payable, credit Vacation Expense C. Debit Vacation Expense, credit Vacation Payable D. Debit Cash, credit Vacation Payable None 10. FPC: Accounting In the event of a payroll overpayment, the journal entry to record the recovery from the employee would include: A. Debit Overpayment Liability, credit Salaries Expense B. Debit Cash, credit Overpayment Liability C. Debit Overpayment Liability, credit Cash D. Debit Salaries Expense, credit Cash None 1 out of 10 Time is Up! Time's up
