ACCOUNTING MIDTERM

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In the journal entry for a payroll, the amount debited to Salary Expense is the total of the Net Pay column of the payroll register.

False

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

False

If the tax base for calculating unemployment taxes is $7,000 and an employee’s accumulated earnings are $6,500.00, and the employee earns another $1,500.00, the amount of new earnings subject to unemployment tax is $1,500.00.

False

Some employers must deposit payments for withheld employees’ federal income tax, social security tax, and Medicare taxes on the next banking day.

True

In each pay period, the payroll information for each employee is recorded on his or her employee earnings record.

True

The payroll register provides all the payroll information needed to prepare a payroll.

False

A business deposits the total of gross wages in a separate payroll checking account.

False

The transaction to record employer payroll taxes expense is journalized at the end of the quarter.

False

Each employer is required by law to periodically report the payroll taxes withheld from employee salaries.

True

The timing of payroll taxes payments is based on the amount owed.

True

Form W-2 reports an employee’s annual earnings and the withholdings for federal income, social security, and Medicare taxes.

True

Each employer who withholds income tax, social security tax, and Medicare tax from employee earnings must furnish each employee with a quarterly statement.

False

Employer payroll taxes are business expenses.

True

The employer social security tax rate is different than the employee social security tax rate.

False

Federal unemployment insurance laws require that employers and employees pay taxes for unemployment compensation.

False