# Accounting Knowledge: Payroll, sales tax, 1099s, fixed assets & period close

Questions with answers and explanations, from the Questiva Learning skills tests.
Version 2, authored 2026-08-23.
Take it interactively: https://www.questivalearning.com/qbcu-certification-prep#skills
## Payroll, sales tax, 1099s, fixed assets & period close

### Q1. In a paycheck entry, the taxes withheld from the employee go to:

- a) Payroll Tax Expense.
- **✓ b) Payroll Liabilities.**
- c) Checking, along with the net pay.
- d) Nowhere. Only the net pay is recorded.

> Withheld taxes are the employee's money that you owe the government. They sit in Payroll Liabilities until you pay them, and Wages Expense is the full gross pay.

### Q2. For your financial statements, straight-line depreciation spreads evenly over an asset's useful life:

- **✓ a) Its cost, less what you expect to sell it for.**
- b) Its full purchase price, whatever it sells for later.
- c) The loan payments on it.
- d) Its drop in market value.

> You depreciate the cost less salvage value (what you expect to sell it for), split evenly over the years you use it.

### Q3. Before you hand over last month's financial statements, you should:

- a) Pay every open bill so Accounts Payable is zero.
- b) Delete bank feed transactions that aren't categorized yet.
- c) Run this month's payroll.
- **✓ d) Reconcile the bank and credit card accounts.**

> Reconciling proves every bank and card transaction is in the books once. Until then, you can't trust the cash balance.

### Q4. Your payroll journal records wages and what's owed. The payroll service's withdrawal goes to:

- a) Payroll Expense.
- **✓ b) Payroll Liabilities.**
- c) Wages Expense and Payroll Tax Expense.
- d) Nowhere. The journal already covers it.

> The journal already records the expense and what's owed, so the withdrawal pays down Payroll Liabilities. Coding it to expense counts payroll twice.

### Q5. Can taxes withheld from paychecks pay the rent when cash is short?

- a) Yes, as long as they're deposited before the quarterly return is due.
- b) Yes, if it's recorded as a loan from the owner.
- c) Small amounts, yes.
- **✓ d) No. They have to be deposited on time.**

> Withheld taxes are the employees' money, held in trust until they're paid over. Late deposits bring penalties, and the people responsible can be held personally liable.

### Q6. When you refund a sale and its sales tax, you reduce:

- **✓ a) Sales and Sales Tax Payable.**
- b) Sales, by the full refund.
- c) Sales, and record the tax as a refund expense.
- d) Nothing. The whole refund is an expense.

> The tax was collected for the state. Once you refund it you no longer owe it, so Sales Tax Payable goes down along with Sales.

### Q7. The bank account reconciles, but Undeposited Funds still holds payments that were deposited. Why?

- **✓ a) The deposits were entered as new income.**
- b) That account always carries a balance.
- c) The deposits are still in transit.
- d) The payments weren't applied to their invoices.

> A deposit entered straight to income skips the payments waiting in Undeposited Funds. They stay there, and the income is counted twice.