BOOKKEEPING TIPS is a twice monthly e-letter published by The American Institute of Professional Bookkeepers (AIPB), Suite 500, 6001 Montrose Road, Rockville, MD 20852. Tel.: 800-622-0121, Fax: 800-541-0066, email: info@aipb.org.

August 2, 2005

Self-Quiz for Bookkeepers—Do You Know the Answer?

Every month, AIPB members receive an 8-question skills quiz in their free monthly technical update, The General Ledger newsletter (www.aipb.org/general_ledger.html). The quiz is generally, but not exclusively, based on news from prior issues. For example, at tax time there may be added questions on taxes; at year-end, added questions on adjusting entries; and so on.

Below is a typical quiz. To find the answers, you will need to scroll way down to where they were placed so that you can’t see t hem while taking the quiz. Good luck!

1. Are on-the-job injuries for employees who work at home covered by workers’ comp?

2. Are new tires for a company car depreciated or expensed?

3. Can you treat new hires as independent contractors during their probationary period?

4. If you tell hourly employees not to work during meal periods but they do anyway, must you pay them for the meal period?

5. You hire Joan Smith. If “Smith” is spelled “Smit” on her Social Security card, you must use “____” on her paycheck.

6. If you give permanent, full-time employees paid vacation or holiday leave, must you do so for temps and part-timers?

7. Your company purchases in 2005, a passenger SUV weighing 6,100 pounds. For 2005, your company can take a Sec. 179 deduction of $_____ and depreciation of $_____.

8. Your company purchases in 2005, a passenger SUV weighing 6,000 pounds. For 2005, your company can take a maximum deduction for tax purposes of $_____.






Answers:

1. yes

2. depreciated

3. no

4. yes

5. “Smit”

6. no (but you should have a written company policy that states this)

7. $25,000, $2,000
To compute: $35,000 cost basis – $25,000 maximum depreciation for an SUV that weighs more than 6,000 pounds = $10,000 revised cost basis x 20% MACRS Table 1 depreciation for Year 1 = $2,000

8. 3,260.
This is the IRS limit on depreciation for an SUV, van or pickup purchased in 2005 that weighs 6,000 pounds or less, is built on a truck chassis, and is not specially modified to make personal use de minimis (such as having all seats but the driver’s removed).

Every month, you get an interesting, informative quiz like this in The General Ledger newsletter, yours free as a member. Here's just a sampling from your August 2005 monthly briefing, which you will receive upon joining:

- what to do if the IRS deems you to be the “responsible person” for remitting payroll and other taxes - IRS sets limits on sole proprietors’ medical expense deductions - How you will soon be able to add a Roth-IRA option to your 401(k) - Easy ways to present data the way you want to in Excel (instead of wasting time copying it to Word and reformatting it) - How nonqualified deferred compensation plans work—step by step - Are those collectibles investments—or inventory? Here's the rule - Member Q&A that includes: “How do we know which benefits are taxable?”
“We have a young man who cuts our grass. He will earn about $400 for the year. Must he be an employee?”
“Can we issue a 1099 to our 2 part-time employees?
“Must we pay Sue overtime if she works on a weekend that is not her regular day?”
“What happens if the payroll deduction we make for employee uniforms brings them below minimum wage?”
And other new developments that affect your company or clients

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