Multiple choice - Accounting

1. The cost ratio in the retail method is found by the cost of goods available for sale at cost divided by:

a.net sales.
b.ending inventory at retail.
c.cost of goods available for sale at retail.
d.net purchases at cost.
e.none of these

2. Jill Hartman earns $750 per week plus 3 percent of sales in excess of $6,500. If Jill sells $25,000 in 1st week, her earnings are ___________.

a.$945.00
b.$1,305.00
c.$1,500.00
d.$1,503.00
e.None of these

3. Differential pay schedule is based on _____________.

a.FICA
b.different levels of production
c.FUTA
d.gross pay
e.None of these

4. Leo Corporation pays its employees on a graduated commission scale: 6 percent on 1st $40,000 sales; 7% on sales above $40,000 to $80,000; and 9 percent on sales greater than $80,000. Bernie Kaminsky had sales of $105,000. His commission is ________.

a.$2,400.00
b.$7,450.00
c.$5,200.00
d.$1,350.00
e.None of these

5. Inventory turnover at retail is equal to net sales divided by:

a.beginning inventory at retail.
b.average inventory at retail.
c.beginning inventory at cost.
d.average inventory at cost.
e.none of these.

6. Allison Co. has a beginning inventory costing $90,000 and an ending inventory costing $120,000. Sales were $380,000. Assume Allison's markup rate is 40 percent. Based on the selling price the inventory turnover at cost (to nearest hundredth) is______.

a.2.17
b.2.22
c.1.47
d.2.58
e.None of these

7. Lana Powell has cumulative earnings of $97,400 at the end of September. In the 1st week in October she earns $2,000. The amount deducted for Social Security and Medicare from her check is_________. (Assume Social Security rate of 6.2% on $97,500 and Medicare of 1.45%).

a.$29.00
b.$35.20
c.$53.20
d.$92.00
e.None of these

8. Inventory turnover at retail is usually _____________ than at cost due to theft, spoilage etc.

a.higher
b.much higher
c.lower
d.much lower
e.none of these

9. Bill Burne's earnings are subject to deductions for Social Security, Medicare and FIT. To date his cumulative earnings are $97,400. This week Bill earns $1,200. Bill, who is married, is paid weekly and claims 3 exemptions. Assume Social Security rate is 6.2% on $97,500 and 1.45% for Medicare. His net pay for the week is_________. (use percentage table in textbook to calculate FIT)

a.$554.86
b.$1,063.67
c.$1,603.76
d.$1,360.67
e.None of these

10. A Merit Rating System for SUTA means:

a.rates cannot change.
b.state rates will always be lower.
c.rate varies with employment record.
d.FUTA will increase.
e.none of these.