Deck 10: Payroll Computations, Records, and Payment

Question 1

Publication 15,Circular E contains federal income tax withholding tables.

Answer 1

True

Question 2

Employees submit Form W-4 to their employers to show the number of withholding allowances they claim for federal income tax withholding purposes.

Answer 2

True

Question 3

One who is hired by an employer and who is under the control and direction of the employer is called a(n)___________________.

Answer 3

employee

Question 4

Time sheets or time cards are used to keep a record of hours worked each day by each employee paid on an hourly basis.

Question 5

The net amount due employees for their wages is recorded as a debit to Salaries and Wages Payable.

Question 6

Employers are required to pay workers' ____________________ insurance that will reimburse employees for losses suffered from job-related injuries.

Question 7

Because salaried employees who hold supervisory or managerial positions generally are not subject to wage and hour laws,they are known as ____________________ employees.

Question 8

The overtime rate is one and one-half times the regular hourly rate.

Question 9

The Medicare tax is levied to provide medical care for the employee and the employee's spouse after they reach age 65.

Question 10

An independent ____________________ is paid by the company to carry out a specific task or job but is not under the direct supervision,control,and direction of the company.

Question 11

If an employee whose regular hourly rate is $9 and whose overtime rate is 1.5 times the regular rate works 42 hours in one week,the employee's gross pay is $378.

Question 12

The employee's marital status is one factor that determines the amount of federal income tax withheld by the employer.

Question 13

An employee whose regular hourly rate is $12 and whose overtime rate is 1.5 times the regular rate worked 45 hours in one week.The employer should record an overtime premium of ____________________ in the payroll register.

Question 14

Withholding for federal income taxes places employees on a pay-as-you-go basis.

Question 15

If an employee works for more than one employer during the year,the social security tax is deducted and matched by only one employer.

Question 16

Employees of firms engaged in interstate commerce must receive an overtime rate of at least 1.5 times the regular hourly rate of pay for time worked in excess of ____________________ hours per week.

Question 17

When a firm records its payroll,the amount of federal income tax withheld from employees is entered as a liability.

Question 18

FICA tax is commonly referred to as ____________________ tax.

Question 19

The maximum base for the social security tax is the same as that for the Medicare tax.

Question 20

A worker who is paid an agreed amount for each week or month or year is said to be paid on a(n)____________________ basis.

Question 21

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

Question 22

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

Question 23

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.

Question 24

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.

Question 25

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.

Question 26

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

Question 27

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

Question 28

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.

Question 29

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.

Question 30

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.

Question 31

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.

Question 32

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.

Question 33

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

Question 34

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.

Question 35

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.

Question 36

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

Question 37

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.

Question 38

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.

Question 39

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.

Question 40

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.

Question 41

The Social Security Tax Payable account will normally have a(n)

A) debit balance.
B) credit balance.
C) debit or credit balance depending on the timing of payments.
D) zero balance.

Question 42

The amount debited to Wages Expense when a payroll is recorded is the

A) regular gross earnings.
B) earnings after taxes.
C) net earnings.
D) total gross earnings.

Question 43

Identify the list of accounts below that would normally all have a credit balance.

A) Salaries Payable,Employee Income Tax Payable,Owner's Capital
B) Salaries Payable,Prepaid Insurance,Medicare Tax Payable
C) Wages Expense,Salaries Payable,Equipment
D) Employee Income Tax Payable,Social Security Tax Payable,Salaries Expense

Question 44

Identify the list of accounts below that would normally all have a debit balance.

A) Salaries Expense,Salaries Payable,Cash
B) Salaries Payable,Medicare Tax Payable,Office Salaries Expense
C) Cash,Salaries Expense,Insurance Expense
D) Employee Income Tax Payable,Social Security Tax Payable,Wages Expense

Question 45

Ramon Gonzalez's gross pay for the week was $700.He had deductions of $85 for federal income tax,$43.40 for social security tax,$10.15 for Medicare tax as well as $5 for union dues.The journal entry to record his salary would include:

A) a debit to Employee Income Tax Payable for $85
B) a credit to Employee Income Tax Payable for $85
C) a debit to Salaries Payable for $700
D) a debit to Salaries Expense for $556.45

Question 46

Jason McCurdy has a regular hourly rate of $10.75.During a two week period,he worked 80 hours and had deductions of $110 for federal income tax,$53.50 for social security tax,and $12.50 for Medicare tax.His net pay was

A) $860.
B) $684.
C) $750.
D) $794.

Question 47

For which of the following taxes is there no limit on the amount of annual earnings subject to the tax?

A) Federal unemployment tax
B) Social Security tax
C) Federal income tax
D) State unemployment tax

Question 48

The employer records the amount of federal income tax withheld as:

A) an asset.
B) a payroll tax expense.
C) a liability.
D) an expense.

Question 49

It is best not to pay wages and salaries by

A) cash.
B) a check from the regular cash account.
C) the direct-deposit method.
D) a check from the payroll cash account.

Question 50

When checks are issued to employees after the entry to record the payroll has been made,the accountant would

A) debit Salaries Expense,debit Wages Expense,and credit Cash.
B) debit Salaries and Wages Payable,debit Social Security Tax Payable,debit Medicare Tax Payable,debit Employee Income Tax Payable,and credit Cash.
C) debit Salaries and Wages Payable and credit Cash.
D) debit Salaries and Wages Payable and credit Salaries Expense and Wages Expense.

Question 51

Lacy Crawford has a regular hourly rate of $21.50.In a week when she worked 40 hours and had deductions of $110 for federal income tax,$53.50 for social security tax,and $12.50 for Medicare tax,her net pay was

A) $860.
B) $684.
C) $750.
D) $794.

Question 52

Lila Harrison's is the sole employee of ABC Grocers.Her gross pay for the week was $400.She had deductions of $50 for federal income tax,$25 for social security tax,and $5.80 for Medicare tax.The journal entry to record her salary would include:

A) a debit to Salaries Expense for $319.20
B) a debit to Salaries Expense for $400
C) a debit to Salaries Payable for $319.20
D) a credit to Salaries Payable for $400

Question 53

Lisa Ramos has a regular hourly rate of $10.75.In a week when she worked 40 hours and had deductions of $55 for federal income tax,$26.75 for social security tax,and $6.25 for Medicare tax,her net pay was

A) $430.
B) $342.
C) $375.
D) $397.

Question 54

Abe Carter had gross earnings of $6,000 for the pay period ending 11/30.His total gross earnings as of 11/15 were $112,000.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,the journal entry to record his earnings for the period ending 11/30 would include:

A) a credit to Salaries Expense for $6,000
B) a credit to Medicare Tax Payable for $870.00
C) a credit to Social Security Tax Payable for $87.00
D) a credit to Medicare Tax Payable for $87.00

Question 55

Each type of deduction made from the employees' earnings is recorded in a separate

A) asset account.
B) expense account.
C) liability account.
D) revenue account.

Question 56

Jill Monroe earns $25 per hour.She worked 48 hours this pay period and receives time-and-a-half for any hours worked over 40 hours per week.Jill's gross earnings are:

A) $1,200
B) $1,300
C) $1,100
D) $1,920

Question 57

Which of the following is NOT typically an employee payroll withholding?

A) federal income taxes
B) state unemployment taxes
C) union dues
D) medical insurance

Question 58

All details related to an employee's earnings,deductions,and net pay throughout the year would be found in

A) the payroll register.
B) the individual earnings record.
C) the general journal.
D) the Wages Expense account in the general ledger.

Question 59

Sabrina Duncan had gross earnings for the pay period ending 10/15/16 of $5,785.Her total gross earnings as of 9/30/16 were $111,400.If Social Security taxes are 6.2% on a maximum earnings of $113,700 per year,Sabrina's Social Security withheld from her 10/15/16 paycheck would be:

A) $358.67
B) $142.60
C) $216.07
D) $198.88

Question 60

The column totals in a payroll register

A) are used in the journal entry to record the payroll.
B) are posted directly to the general ledger accounts.
C) are unnecessary.
D) are used at the end of the year to record payroll taxes owed to the IRS.

Question 61

The Rollins Company has office employees and shipping employees.A summary of their earnings and deductions for the week ended June 14,2016,is shown below.On page 6 of a general journal,record the June 14 payroll and the entry to summarize the effect of the checks written to pay the payroll.

Question 62

The monthly salaries for December and the year-to-date earnings as of November 30 for the three employees of the Lakeview Medical Center are listed below.Compute the amount of social security tax and Medicare tax to be withheld from each of the employee's gross pay for December.Assume a 6.2 percent social security tax rate and a base of $113,700 for the calendar year.Assume a 1.45 percent Medicare tax rate.

Question 63

During the week ended May 15,2016,Scott Fairchild worked 40 hours.His regular hourly rate is $14.Assume that his earnings are subject to social security tax at a rate of 6.2 percent and Medicare tax at a rate of 1.45 percent.He also has deductions of $31 for federal income tax and $21 for health insurance.

A)What is his gross pay for the week?
B)What is the total of his deductions for the week?
C)What is his net pay for the week?

Question 64

During one week,three employees of the Pampered Pooch Pet Salon worked the number of hours shown below.All these employees receive overtime pay at one and a half times their regular hourly rate for any hours worked beyond 40 in a week.Compute the regular earnings,overtime earnings,and gross pay for each employee.

Question 65

The monthly salaries for December and the year-to-date earnings as of November 30 for the three employees of the Barbara's Bookstore,Inc.are listed below.Compute the amount of social security tax and Medicare tax to be withheld from each of the employee's gross pay for December.Assume a 6.2 percent social security tax rate and a base of $113,700 for the calendar year.Assume a 1.45 percent Medicare tax rate.

Question 66

During one week,three employees of the Siesta Inn worked the number of hours shown below.All these employees receive overtime pay at one and a half times their regular hourly rate for any hours worked beyond 40 in a week.Compute the regular earnings,overtime earnings,and gross pay for each employee.

Question 67

The Royal Company has office employees and sales employees.A summary of their earnings and deductions for the week ended April 26,2016,is shown below.On page 18 of a general journal,record the April 26 payroll and the entry to summarize the effect of the checks written to pay the payroll.

Question 68

The monthly salaries for December and the year-to-date earnings as of November 30 for the three employees of Heather's Hair Salon are listed below.Compute the amount of social security tax and Medicare tax to be withheld from each of the employee's gross pay for December.Assume a 6.2 percent social security tax rate and a base of $113,700 for the calendar year.Assume a 1.45 percent Medicare tax rate.

Question 69

Social Security taxes are paid by:

A) employees only.
B) the employer and federal government.
C) both the employee and employer.
D) solely by the employer.

Question 70

The monthly salaries for December and the year-to-date earnings as of November 30 for the three employees of the Design Warehouse are listed below.Compute the amount of social security tax and Medicare tax to be withheld from each of the employee's gross pay for December.Assume a 6.2 percent social security tax rate and a base of $113,700 for the calendar year.Assume a 1.45 percent Medicare tax rate.

Question 71

The Santa Fe Company has office employees and shipping employees.A summary of their earnings and deductions for the week ended July 12,2016,is shown below.On page 16 of a general journal,record the July 12 payroll and the entry to summarize the effect of the checks written to pay the payroll.

Question 72

During one week,three employees of the Snowshoe Lodge worked the number of hours shown below.All these employees receive overtime pay at one and a half times their regular hourly rate for any hours worked beyond 40 in a week.Compute the regular earnings,overtime earnings,and gross pay for each employee.

Question 73

The Burns Company has two office employees and two shipping employees.A summary of their earnings and deductions for the week ended August 23,2016,is shown below.On page 10 of a general journal,record the August 23 payroll and the entry to summarize the effect of the checks written to pay the payroll.

Question 74

The total amount earned by the employee is called the

A) gross pay.
B) take home pay.
C) net pay.
D) payroll.

Question 75

During the week ended January 11,2016,Darlene Marcussen worked 40 hours.Her regular hourly rate is $18.Assume that her earnings are subject to social security tax at a rate of 6.2 percent and Medicare tax at a rate of 1.45 percent.She also has deductions of $40 for federal income tax and $21 for health insurance.

A)What is his gross pay for the week?
B)What is the total of his deductions for the week?
C)What is his net pay for the week?

Question 76

Rick O'Shea,the only employee of Hunter Furniture Company,makes $30,000 per year and is paid once a month.For the month of July,his federal income taxes withheld are $180,state income taxes withheld are $37,social security is 6.2%,Medicare tax is 1.45%,State Unemployment Tax is 4%,and Federal Unemployment tax is .8%.What is Rick's net pay for July?

A) $2,500.00
B) $2,283.00
C) $2,308.75
D) $2,091.75

Question 77

During the week ended February 8,2016,Stuart Wayne worked 40 hours.His regular hourly rate is $10.Assume that his earnings are subject to social security tax at a rate of 6.2 percent and Medicare tax at a rate of 1.45 percent.He also has deductions of $31 for federal income tax and $21 for health insurance.

A)What is his gross pay for the week?
B)What is the total of his deductions for the week?
C)What is his net pay for the week?

Question 78

During the week ended April 26,2016,Andy Tyler worked 40 hours.His regular hourly rate is $15.Assume that his earnings are subject to social security tax at a rate of 6.2 percent and Medicare tax at a rate of 1.45 percent.He also has deductions of $31 for federal income tax and $21 for health insurance.

A)What is his gross pay for the week?
B)What is the total of his deductions for the week?
C)What is his net pay for the week?

Question 79

During one week,three employees of the Tea Leaf Cafe worked the number of hours shown below.All these employees receive overtime pay at one and a half times their regular hourly rate for any hours worked beyond 40 in a week.Compute the regular earnings,overtime earnings,and gross pay for each employee.