Deck 10: Payroll Computations, Records, and Payment

Question 1

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

Answer 1

True

Question 2

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 $567.

Answer 2

False

Question 3

Which of the following statements is not correct?

A)The SUTA tax protects employees against losses from job-related injuries or illnesses.
B)The FUTA tax provides benefits for employees who become unemployed.
C)The federal unemployment tax rate can be reduced by the rate charged by state for the state unemployment tax.
D)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.

Answer 3

A

Question 4

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)$20.
C)$220.
D)$5.

Question 5

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

Question 6

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 7

Federal law requires employers to pay which of the following employment related taxes?

A)Federal and state income tax, social security tax, Medicare tax, and FUTA.
B)FICA tax, federal and state income tax and federal unemployment compensation tax
C)only federal and state unemployment compensation tax
D)FICA tax and federal unemployment compensation tax

Question 8

Federal law requires employers to withhold which of the following taxes from the employee's pay?

A)Federal and state income tax, social security tax, Medicare tax, and FUTA.
B)federal income tax, social security tax, Medicare tax, and state and local taxes.
C)federal income tax, social security tax, and Medicare tax.
D)federal income tax, social security tax, Medicare tax, and FUTA.

Question 9

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

A)Social Security Tax Expense.
B)Social Security Tax Payable.
C)Income Tax Expense.
D)Employee Federal Income Tax Payable.

Question 10

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 11

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

Question 12

Which of the following statements is not correct?

A)Medicare taxes are levied in an equal amount on both employers and employees.
B)The amount of social security tax withheld depends on an employee's gross earnings, marital status, and number of withholding allowances.
C)Once an employee's year-to-date wages reach a certain amount prescribed by law, social security tax is no longer withheld.
D)Federal law requires that social security, Medicare, and federal income taxes be deducted from the gross pay of most employees.

Question 13

Which of the following statements is correct?

A)All employees must be paid no more than the minimum wage rate set by the Fair Labor Standards Act.
B)Disability benefits for the worker and the worker's dependents are provided by the Federal Insurance Contributions Act.
C)A company is required to withhold various employee taxes from amounts paid independent contractors.
D)The accountant who performs the independent audit for a company is an employee of the company.

Question 14

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

Question 15

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

Question 16

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

Question 17

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

Question 18

Identify the statement below that is not true regarding social security tax.

A)Social security is sometimes referred to as FICA.
B)In any given year, there is no limit on the amount of wages subject to social security tax.
C)Both the employee and the employer pay an equal amount of social security tax on the employee's wages.
D)The social security tax provides benefits for retirement as well as worker disability.

Question 19

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

Question 20

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

Question 21

ABC Grocers uses a separate checking account to pay their employees. The gross pay for the period was $850. However, after deductions were taken out, the net pay for the period was $790. The journal entry to record the issuance of payroll checks to their employees would include:

A)a credit to Salaries Payable for $850
B)a debit to Salaries Payable for $790
C)a debit to Salaries Payable for $850
D)a debit to Salaries Expense for $790

Question 22

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

A)salary basis.
B)hourly-rate basis.
C)commission basis
D)piece-rate basis.

Question 23

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 credit for $108.75.
B)a credit for $36.25.
C)a debit for $36.25.
D)a debit for $108.75.

Question 24

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, $53.32 for social security tax, and $12.47 for Medicare tax, her net pay was

A)$684.21
B)$860.00
C)$794.21
D)$750.00

Question 25

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)gross wages
B)marital status
C)withholding allowances claimed on Form W-4
D)hours worked during the pay period

Question 26

Michael Miller is paid twice a month and had total gross earnings as of 10/15 of $116,800. His gross earnings for the period ending 10/31 were $6,000. If social security taxes are 6.2% on a maximum earnings of $122,700 per year and Medicare tax is 1.45% on all earnings, how much medicare tax will be paid by Michael and how much will be paid by his employer for the period ending 10/31?

A)Michael will pay $24.65 and his employer will also pay $24.65.
B)Michael will pay $87.00 and his employer is not required to pay any social security tax.
C)Michael will pay $24.65 and his employer will pay $87.00.
D)Michael will pay $87.00 and his employer will also pay $87.00.

Question 27

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 wages expense of

A)$460.
B)$340.
C)$400.
D)$60.

Question 28

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

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

Question 29

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)$396.
B)$594.
C)$378.
D)$414.

Question 30

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 federal income tax withheld would include:

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

Question 31

Lisa Ramos has a regular hourly rate of $12.75. In a week when she worked 40 hours and had deductions of $67.00 for federal income tax, $31.62 for social security tax, and $7.40 for Medicare tax, her net pay was

A)$616.02
B)$403.98
C)$510.00
D)$106.02

Question 32

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, $24.80 for social security tax, and $5.80 for Medicare tax. The journal entry to record her gross pay would include:
A)a credit to Salaries Payable for $400.00

A)a debit to Salaries Expense for $319.40
B)a debit to Salaries Payable for $319.40
D)a debit to Salaries Expense for $400.00

Question 33

Junkman Autos uses a separate checking account to pay their employees. The gross pay for the period was $1,000. However, after deductions were taken out, the net pay for the period was $820. The journal entry to record the issuance of payroll checks to their employees is:

A)

B)

C)

D)

Question 34

Publication 15, Circular E contains withholding information

A)for federal and state income taxes.
B)for social security and Medicare taxes only.
C)for federal income taxes only.
D)for social security, Medicare, and federal income tax taxes.

Question 35

An employee whose regular hourly rate is $12 and whose overtime rate is 1.5 times the regular rate worked 48 hours in one week. The total overtime earned by the employee for the week is

A)$96.
B)$144.
C)$480.
D)$48.

Question 36

Michael Miller is paid twice a month and had total gross earnings as of 10/15 of $116,800. His gross earnings for the period ending 10/31 were $6,000. If social security taxes are 6.2% on a maximum earnings of $122,700 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 10/31?

A)Michael will pay $105.40 and his employer is not required to pay any social security tax.
B)Michael will pay $365.80 and his employer will also pay $365.80.
C)Michael will pay $372.00 and his employer will also pay $372.00.
D)Michael will pay $372.00 and his employer will pay $105.40.

Question 37

An employee whose regular hourly rate is $12 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)$48.
B)$624.
C)$216.
D)$96.

Question 38

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)$120.
B)$880.
C)$440.
D)$40.

Question 39

An employee whose regular hourly rate is $20 and whose overtime rate is 1.5 times the regular rate worked 45 hours one week. The employee's gross pay was

A)$950.
B)$900.
C)$800.
D)$1,350.

Question 40

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 debit for $72.50.
C)a credit for $217.50.
D)a credit for $72.50.

Question 41

It is best not to pay wages and salaries by

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

Question 42

Social Security Tax is 6.2%; Medicare Tax is 1.45% and federal and state unemployment compensation taxes total 5.4% (both added together); the federal income tax for the month is $250 and the state income taxes for the month is $40. If employee George Glass earned $2,500 for the current month and he has not reached any maximums for taxes, what are the total employee payroll taxes withheld for the current month?

A)$290.00
B)$326.25
C)$481.25
D)$616.25

Question 43

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 used at the end of the year to record payroll taxes owed to the IRS.
D)are unnecessary.

Question 44

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

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

Question 45

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

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

Question 46

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 47

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

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

Question 48

Abe Carter had gross earnings of $6,000 for the pay period ending 11/30. His total gross earnings as of 11/15 were $116,000. If Social Security taxes are 6.2% on a maximum earnings of $122,700 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 FICA Tax Payable for $87.00
B)a credit to Salaries Expense for $6,000
C)a credit to Medicare Tax Payable for $36.25
D)a credit to Medicare Tax Payable for $87.00

Question 49

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

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

Question 50

The total amount earned by the employee is called the

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

Question 51

Sabrina Duncan had gross earnings for the pay period ending 10/15/19 of $5,785. Her total gross earnings as of 9/30/19 were $116,400. If Social Security taxes are 6.2% on a maximum earnings of
$122,700 per year, Sabrina's Social Security withheld from her 10/15/19 paycheck would be:

A)$220.47
B)$216.07
C)$358.67
D)$390.60

Question 52

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

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

Question 53

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

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

Question 54

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 tax is 6.2%, Medicare tax is 1.45%, State Unemployment Tax is 4%, and Federal Unemployment tax is 0.6%. What is Rick's net pay for July?

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

Question 55

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

Question 56

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

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

Question 57

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

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

Question 58

Social Security Tax is 6.2%; Medicare Tax is 1.45% and federal and state unemployment compensation taxes total 5.4% (both added together). The federal income tax for the month is $250 and the state income taxes for the month is $40. If employee George Glass earned $2,500 for the current month and he has not reached any maximums for taxes, what is George's total net pay for the month?

A)$1,883.75
B)$2,018.75
C)$2,500.00
D)$2,173.75

Question 59

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

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

Question 60

Social Security taxes are paid by:

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

Question 61

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

Question 62

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 63

A person who is hired by a company and who is under the control and direction of the employer is called a(n)________.

Question 64

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 on a maximum of $122,700 for the calendar year. Assume a 1.45 percent Medicare tax rate.

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 on a maximum of $122,700 for the calendar year. Assume a
1.45 percent Medicare tax rate.

Question 66

The employer records the amount of federal income taxes withheld from employees in the________ account.

Question 67

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.

Question 68

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 69

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

Question 70

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

Question 71

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 72

An employee's gross earnings minus the necessary payroll deductions equals the employee's________.

Question 73

During the week ended May 15, 2019, Scott Fairchild worked 40 hours. His regular hourly rate is $14 .Assume that all of 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 74

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

Question 75

A worker who is paid an agreed amount for each week or month or year, regardless of the actual hours worked, is said to be paid on a(n)________basis.

Question 76

FICA tax is commonly referred to as ________ tax.

Question 77

An ________ 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 78

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 $122,700 for the calendar year. Assume a 1.45 percent Medicare tax rate.

Question 79

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 on a maximum of $122,700 for the calendar year. Assume a 1.45 percent Medicare tax rate.

Question 80

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.