Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

4. Merchandising Operations

Net Sales

Financial Accounting

4. Merchandising Operations

Net Sales

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Multiple Choice

Employees' gross earnings differ from their net pay because of ______.

commissions earned on sales

bonuses received during the year

overtime pay added to regular wages

deductions such as taxes and benefits withheld

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Verified step by step guidance

Understand the difference between gross earnings and net pay: Gross earnings represent the total amount earned by an employee before any deductions, while net pay is the amount the employee actually receives after deductions.

Identify the types of deductions that reduce gross earnings to net pay: These typically include mandatory deductions such as income taxes, Social Security, and Medicare, as well as voluntary deductions like health insurance premiums, retirement contributions, and other benefits.

Recognize that commissions, bonuses, and overtime pay are components of gross earnings: These are additional earnings added to the employee's regular wages and do not directly affect the calculation of net pay.

Clarify that deductions are the key factor in the difference between gross earnings and net pay: These deductions are subtracted from the gross earnings to arrive at the net pay amount.

Conclude that the correct answer is deductions such as taxes and benefits withheld, as these are the primary reason for the difference between gross earnings and net pay.