Accounting Exam 3

What account is debited when salaries are incurred, but not yet paid?

Wages Expense or Payroll Expense

What account is credited when salaries are incurred, but not yet paid?

Wages Payable or Payroll Payable

Current Assets

Things a business owns that it expects to turn into cash or use up within one year

Non-Current Assets

Long-term investments or property a business owns that it plans to keep and use for more than one year

Current Liabilities

Debts and bills a business owes that must be paid off within one year

Non-Current Liabilities

Money a business owes that does not have to be paid back until after one year

If Sally takes out a loan for $7,000 at a 4% rate on 1/1/25 and is due 180 days later (6/30/25) how much will Sally pay in total interest on the loan?

$7,000 × 0.04 × 6/12 = $140

If Sally takes out a loan for $7,000 at a 4% rate on 1/1/25 and is due 60 days later (2/28/25) how much will Sally pay in total interest on the loan?

$7,000 × 0.04 × 2/12 = $46.67

What tax must be matched by an employer in the federal court of law?

Social Security and/or Medicare

When accruing interest what account is debited?

Interest Expense

Whenever you record depreciation what account is debited?

Depreciation Expense

Whenever you record depreciation what account is credited?

Accumulated Depreciation