Question 1

Which of the following is a factor in the determination of the amount of social security tax to withhold from an employee's pay?
A) hours worked during the pay period
B) marital status
C) withholding allowances claimed on Form W-4
D) gross wages

Accepted Answer

Social security tax is based on a set percentage of an employee's gross wages. The amount of gross wages earned during the pay period is a factor in the determination of the amount of social security tax to withhold from an employee's pay. The other choices are not directly related to social security tax withholding.

Question 2

To compute ____________________ pay,it is necessary to subtract the total of an employee's deductions from the employee's gross pay.

Accepted Answer

The answer of To compute ____________________ pay,it is necessary to...

Question 3

Salespeople who are paid a percentage of net sales are paid on a(n)
A) commission basis.
B) salary basis.
C) hourly-rate basis.
D) piece-rate basis.

Accepted Answer

Salespeople who are paid a percentage of net sales are typically paid on a commission basis. This means that their pay is directly tied to the amount of sales they make, incentivizing them to sell as much as possible.

Question 4

Which of the following statements is correct?
A) A company is required to withhold various employee taxes from amounts paid independent contractors.
B) The accountant who performs the independent audit for a company is an employee of the company.
C) All employees must be paid at the minimum wage rate set by the Fair Labor Standards Act.
D) Disability benefits for the worker and the worker's dependents are provided by the Federal Insurance Contributions Act.

Accepted Answer

The answer of Which of the following statements is correct?
A)...

Question 5

An employee whose regular hourly rate is $9 and whose overtime rate is 1.5 times the regular rate worked 44 hours one week.The employee's gross pay was
A) $378.
B) $396.
C) $414.
D) $594.

Accepted Answer

The answer of An employee whose regular hourly rate is...

Question 6

Federal law requires that the employer withhold _________ from the employee's pay.
A) federal income tax,social security tax,Medicare tax,and FUTA
B) federal income tax,social security tax,and Medicare tax
C) federal income tax,social security tax,Medicare tax,and state and local taxes
D) Federal and state income tax,social security tax,Medicare tax,and FUTA

Accepted Answer

According to the Federal Insurance Contributions Act (FICA), employers are required to withhold federal income tax, social security tax, and Medicare tax from their employees' pay. FUTA (Federal Unemployment Tax Act) is not withheld from the employee's pay, but is paid entirely by the employer. State and local taxes may also be withheld if mandated by the state. However, the question specifically asks for federal law requirements, so only federal taxes need to be considered. Therefore, the correct answer is B.

Question 7

After payroll computations are made,the hours worked,rates,earnings,and deductions are entered into a record called a(n)___________________.

Accepted Answer

The answer of After payroll computations are made,the hours worked,rates,earnings,and...

Question 8

Assuming a Medicare tax rate of 1.45% and monthly gross wages of $2,500,the amount recorded in Medicare Tax Payable for one quarter for the employee's payroll deduction is
A) a debit for $36.25.
B) a credit for $36.25.
C) a debit for $108.75.
D) a credit for $108.75.

Accepted Answer

The Medicare tax for one month is $2,500 * 1.45% = $36.25. For one quarter (3 months), it is $36.25 * 3 = $108.75. Since it's a payroll deduction, it is recorded as a credit in Medicare Tax Payable.

Question 9

An employee whose regular hourly rate is $10 and whose overtime rate is 1.5 times the regular rate worked 48 hours in one week.In the payroll register,the employer should record an overtime premium of
A) $480.
B) $240.
C) $80.
D) $40.

Accepted Answer

The overtime premium is the additional amount paid for overtime hours. The regular rate is $10, so the overtime rate is $15 ($10 x 1.5). The employee worked 8 overtime hours (48 total hours - 40 regular hours). The overtime premium is the extra $5 per hour for 8 hours, totaling $40 (8 hours x $5).

Question 10

Publication 15,Circular E contains withholding information
A) for social security and Medicare taxes only.
B) for federal income taxes only.
C) for social security,Medicare,and federal income tax taxes.
D) for federal and state income taxes.

Accepted Answer

The answer of Publication 15,Circular E contains withholding information
A) for...

Question 11

Which of the following statements is not correct?
A) The amount of social security tax withheld depends on an employee's gross earnings,marital status,and number of withholding allowances.
B) Federal law requires that social security,Medicare,and federal income taxes be deducted from the gross pay of most employees.
C) Medicare taxes are levied in an equal amount on both employers and employees.
D) Once an employee's year-to-date wages reach a certain amount prescribed by law,social security tax is no longer withheld.

Accepted Answer

Social security tax withholding is based on an employee's gross earnings and not on marital status or number of withholding allowances.

Question 12

Assuming a Medicare tax rate of 1.45% and monthly gross wages of $5,000,the amount recorded in Medicare Tax Payable for one quarter for the employee's payroll deduction is
A) a debit for $217.50.
B) a credit for $217.50.
C) a debit for $72.50.
D) a credit for $72.50.

Accepted Answer

The Medicare tax for one month is 1.45% of $5,000, which is $72.50. For one quarter (3 months), it is $72.50 x 3 = $217.50. This amount is recorded as a credit in Medicare Tax Payable.

Question 13

The amount of employees' ____________________ pay is recorded in the Wages Expense account.

Accepted Answer

The answer of The amount of employees' ____________________ pay is...

Question 14

Michael Miller had total gross earnings as of 10/15 of $113,000.His gross earnings for the period ending 10/30 were $2,000.If social security taxes are 6.2% on a maximum earnings of $113,700 per year and Medicare tax is 1.45% on all earnings,how much social security tax will be paid by Michael and how much will be paid by his employer for the period ending 10/30?
A) Michael will pay $43.40 and his employer is not required to pay any social security tax.
B) Michael will pay $43.40 and his employer will also pay $43.40.
C) Michael will pay $124 and his employer will also pay $124.
D) Michael will pay $124 and his employer is not required to pay any social security tax.

Accepted Answer

The maximum taxable earnings for social security tax is $113,700 per year. As of 10/15, Michael has already earned $113,000, so his earnings for the period ending 10/30 ($2,000) are still within the taxable limit.

To calculate social security tax, we multiply the earnings by the tax rate of 6.2%. 
For Michael: $2,000 x 0.062 = $124 
For his employer: $2,000 x 0.062 = $124

Therefore, Michael will pay $124 and his employer will also pay $124 for social security tax for the period ending 10/30.

Question 15

An employee whose regular hourly rate is $20 and whose overtime rate is 1.5 times the regular rate worked 44 hours in one week.In the payroll register,the employer should record an overtime premium of
A) $880.
B) $440.
C) $120.
D) $40.

Accepted Answer

The answer of An employee whose regular hourly rate is...

Question 16

The employer records the amount of federal income taxes withheld from employees in the Employee Income Tax ____________________ account.

Accepted Answer

The answer of The employer records the amount of federal...

Question 17

An employee whose regular hourly rate is $18 and whose overtime rate is 1.5 times the regular rate worked 44 hours one week.The employee's gross pay was
A) $1,188.
B) $828.
C) $792.
D) $756.

Accepted Answer

The answer of An employee whose regular hourly rate is...

Question 18

The employer records the amount of federal income tax withheld from employees as
A) Income Tax Expense.
B) Employee Federal Income Tax Payable.
C) Social Security Tax Expense.
D) Social Security Tax Payable.

Accepted Answer

The amount of federal income tax withheld from employees is a liability owed by the employer to the government on behalf of the employee. As such, it should be recorded as an Employee Federal Income Tax Payable. Option A, Income Tax Expense, represents the tax expense incurred by the employer, not the liability owed. Option C, Social Security Tax Expense, represents a different type of tax altogether, and Option D, Social Security Tax Payable, also represents a different liability owed by the employer.

Question 19

An employee whose regular hourly rate is $10 and whose overtime rate is 1.5 times the regular rate worked 44 hours in one week.In the payroll register,the employer should record an overtime premium of
A) $440.
B) $220.
C) $20.
D) $5.

Accepted Answer

The overtime premium is the additional amount paid for overtime hours. The employee worked 4 hours of overtime (44 total hours - 40 regular hours). The overtime premium is 0.5 times the regular rate for these 4 hours: 0.5 * $10 * 4 = $20.

Question 20

Which of the following statements is not correct?
A) The FUTA tax provides benefits for employees who become unemployed.
B) The federal unemployment tax rate can be reduced by the rate charged by state for the state unemployment tax.
C) The earnings base for the federal and state unemployment taxes are the same,the first $7,000 of an employee's earnings for the year.
D) The SUTA tax protects employees against losses from job-related injuries or illnesses.

Accepted Answer

The SUTA tax (State Unemployment Tax Act) does not protect employees against losses from job-related injuries or illnesses. It is used to fund state unemployment insurance programs that provide benefits to workers who become unemployed.

Quiz 10: Payroll Computations, Records, and Payment

Which of the following is a factor in the determination of the amount of social security tax to withhold from an employee's pay?

To compute ____________________ pay,it is necessary to subtract the total of an employee's deductions from the employee's gross pay.

Salespeople who are paid a percentage of net sales are paid on a(n)

Which of the following statements is correct?

An employee whose regular hourly rate is $9 and whose overtime rate is 1.5 times the regular rate worked 44 hours one week.The employee's gross pay was

Federal law requires that the employer withhold _________ from the employee's pay.

After payroll computations are made,the hours worked,rates,earnings,and deductions are entered into a record called a(n)___________________.

Assuming a Medicare tax rate of 1.45% and monthly gross wages of $2,500,the amount recorded in Medicare Tax Payable for one quarter for the employee's payroll deduction is

An employee whose regular hourly rate is $10 and whose overtime rate is 1.5 times the regular rate worked 48 hours in one week.In the payroll register,the employer should record an overtime premium of

Publication 15,Circular E contains withholding information

Which of the following statements is not correct?

Assuming a Medicare tax rate of 1.45% and monthly gross wages of $5,000,the amount recorded in Medicare Tax Payable for one quarter for the employee's payroll deduction is

The amount of employees' ____________________ pay is recorded in the Wages Expense account.

An employee whose regular hourly rate is $20 and whose overtime rate is 1.5 times the regular rate worked 44 hours in one week.In the payroll register,the employer should record an overtime premium of

The employer records the amount of federal income taxes withheld from employees in the Employee Income Tax ____________________ account.

An employee whose regular hourly rate is $18 and whose overtime rate is 1.5 times the regular rate worked 44 hours one week.The employee's gross pay was

The employer records the amount of federal income tax withheld from employees as

An employee whose regular hourly rate is $10 and whose overtime rate is 1.5 times the regular rate worked 44 hours in one week.In the payroll register,the employer should record an overtime premium of

Which of the following statements is not correct?