Deck 6: Analyzing and Journalizing Payroll Transactions

Question 1

FUTA Taxes Payable is an expense account in which are recorded the employer's federal unemployment taxes.

Answer 1

False

Question 2

In order to prepare Forms W-2, an employer would utilize the employee's earnings record.

Answer 2

True

Question 3

The wage and salaries expense account is an operating expense account debited for total net pay each payroll period.

Answer 3

False

Question 4

Deductions from gross pay in the payroll register are reflected on the credit side of the journal entry to record the payroll.

Question 5

Companies usually provide a separate column in the payroll register to record the employer's payroll taxes.

Question 6

When recording FICA taxes, different liability accounts should be set up for the employees' and employer's portions of the tax.

Question 7

Tax withholdings from employees' pays reduce the amount of the debit to Salary Expense in the payroll entry.

Question 8

An employer will use the payroll register to keep track of an employee's accumulated wages.

Question 9

Service charges that are passed on to the employee by the employer are not part of the disposable earnings subject to garnishment.

Question 10

A debit to the employees FIT payable account removes the liability for the amount of federal income taxes withheld from employees' wages.

Question 11

Each payday, the total of net pays that the employer incurs is the wage expense that must be debited.

Question 12

Amounts withheld from employees' wages for health insurance are credited to a liability account.

Question 13

Under the provisions of the Consumer Credit Protection Act, an employer can discharge an employee simply because the employee's wage is subject to garnishment for a single indebtedness.

Question 14

When withheld union dues are turned over to the union by the employer, a journal entry is made debiting the liability account and crediting the cash account.

Question 15

The total of the net amount paid to employees each payday is credited to either the cash account or the salaries payable account.

Question 16

Once the journal entry for the payroll is complete, the information is posted to the appropriate general ledger accounts.

Question 17

If wages are paid weekly, postings to the employee's earnings record would be done once a month.

Question 18

FIT Payable is a liability account used to record employees' withheld federal income tax and also the employer's match of that tax.

Question 19

An employee's marital status and number of withholding allowances never appear on the payroll register.

Question 20

Every state allows employers to make e-payment options as a condition of employment.

Question 21

The entry to record the employer's payroll taxes usually includes credits to the liability accounts for FICA (OASDI and HI), FUTA, and SUTA taxes.

Question 22

In the adjusting entry to accrue wages at the end of the accounting period, there is no need to credit any tax withholding accounts.

Question 23

If employees must contribute to the state unemployment fund, this deduction should be shown in the payroll tax entry.

Question 24

The adjusting entry to record the accrued vacation pay at the end of an accounting period includes credits to the tax withholding liability accounts.

Question 25

The FUTA tax part of the payroll tax entry is recorded at the net amount (0.6%) of the taxable payroll.

Question 26

Union Dues Payable is a liability account credited with the deductions made from union members' wages for their union dues.

Question 27

Carmen Gaetano worked 46 hours during this payweek. He is paid time-and-a-half for hours over 40 and his pay rate is $17.90/hour. What was his overtime premium pay for this workweek?

A) $107.40
B) $161.10
C) $50.70
D) $53.70
E) $26.85

Question 28

The payroll taxes incurred by an employer are FICA, FUTA, and SUTA.

Question 29

Since the FUTA tax is a social security tax, it can be charged to the same expense account as the other payroll taxes on the employer, the payroll taxes account.

Question 30

Posting to the general ledger for payroll entries is done only at the end of each calendar year.

Question 31

Since the credit against the FUTA tax (for SUTA contributions) is made on Form 940, the employer's payroll tax entries should include the FUTA tax at the gross amount (6.0%).

Question 32

When the federal tax deposit is made, the employees' and employer's shares of FICA taxes are paid along with the employees' FIT taxes withheld.

Question 33

The employer's payroll tax expenses are recorded by all employers at the time these taxes are actually paid.

Question 34

At the time that the entry is made to record the employer's payroll taxes, the SUTA tax is recorded at the net amount (0.6%).

Question 35

The payroll taxes account is an expense account that is debited for the FICA, FUTA, and SUTA taxes on the employer.

Question 36

The FICA taxes on the employer represent both business expenses and liabilities of the employer.

Question 37

Since FUTA tax is paid only once a quarter, the FUTA tax expense is recorded only at the time of payment.

Question 38

FICA Taxes Payable-OASDI is a liability account debited for the employer's portion of the FICA tax.

Question 39

Since vacation time is paid when used, there is no need to accrue this time in a liability account at the end of each accounting period.

Question 40

The employee's earnings record provides information for each of the following except:

A) completing Forms W-2.
B) completing the journal entry to record the payroll.
C) determining when the accumulated wages of an employee reach cutoff levels.
D) preparing reports required by state unemployment compensation laws.
E) preparing the payroll register.

Question 41

The entry to deposit FICA taxes and federal income taxes withheld involves all of the following accounts except:

A) Payroll Taxes.
B) FICA Taxes Payable-OASDI.
C) FICA Taxes Payable-HI.
D) Employees FIT Payable.
E) Cash.

Question 42

When recording the deposit of FUTA taxes owed, the proper entry is:

A) FUTA Tax Expense Cash
B) Payroll Taxes Cash
C) Payroll Taxes FUTA Taxes Payable
D) FUTA Taxes Payable Cash
E) FUTA Tax Expense FUTA Taxes Payable

Question 43

Which of these accounts shows the total gross earnings that the employer incurs as an expense each payday?

A) Payroll Taxes
B) Federal Income Taxes Payable
C) Wages Expense
D) Salaries Payable
E) None of the above

Question 44

Which of the following is not an expense of the employer?

A) FUTA tax
B) FICA tax-HI
C) FICA tax-OASDI
D) SUTA tax
E) Union dues withheld

Question 45

In recording the monthly adjusting entry for accrued wages at the end of the accounting period, the amount of the adjustment would usually be determined by:

A) collecting the timesheets for the days accrued.
B) using the same amount as the prior month's adjustment.
C) using the wages of the salaried workers only.
D) a percentage of the previous week's gross payroll.
E) a percentage of the previous week's net payroll.

Question 46

Which of the following items would require an adjusting entry at the end of each accounting period?

A) Garnishment for child support payments
B) Withholdings for a 401(k) plan
C) Vacation pay earned by employees
D) Union dues withheld
E) None of the above

Question 47

Which of the following accounts is an expense account in which an employer records the FICA, FUTA, and SUTA taxes?

A) Wages Expense
B) Payroll Taxes
C) SUTA Taxes Payable
D) Salaries Payable
E) None of the above