Chapter 13 - Accounting 1

All the payroll information needed to prepare payroll and tax reports is found on

(C) the payroll register and the employee earnings record

The payroll journal entry is based on the totals of the payroll register

(A) Total Earnings column, each deduction column, and the Net Pay column

The Total Earnings column total of a payroll register is journalized as a debit to

(B) Salary Expense

The total of the Federal Income Tax column of a payroll register is credited to

(C) a liability account

The total of the Net Pay column of the payroll register is credited to

(C) an asset account

When a semimonthly payroll is paid, the credit to Cash is equal to the

(D) net pay of all employees

Employer payroll taxes are

(B) expenses

Payroll taxes that are paid by both the employer and the employee are

(C) social security tax and Medicare tax

A federal tax used for state and federal administrative expenses of the unemployment program is the

(C) federal unemployment tax

A state tax used to pay benefits to unemployed workers is the

(D) state unemployment tax

An employee's earnings subject to unemployment taxes are referred to as

(C) FUTA earnings

Each employer who withholds income tax, social security tax, and Medicare tax from employee earnings must furnish each employee an

(B) IRS Form W-2

Each employer is required by law to report payroll taxes on an

(B) IRS Form 941

The form used to report annual earnings and payroll taxes for all employees to the Social Security Administration is the

(C) W-3

To record the payment of federal unemployment tax, the account debited is

(C) a liability account

t or f: John Butler's total salary is more than his total social security salary

false

t or : This Form W-2 shows John Butler's net pay for the entire year

false

t or f: The amount withheld for Mr. Butler's social security and Medicare tax was more than the amount withheld for his federal income tax

true

t or f: State income tax was withheld from Mr. Butler's salary

false

t or f: All deductions from Mr. Butler's salary for taxes and retirement plan contributions are shown on his Form W-2

false

t or f: This Form W-2 would indicate whether Mr. Butler had more than one employer during the year

false

t or f: If an employee works for several employers during the year, that employee must receive a Form W-2 from each employer

true

t or f: An employer is required to provide employees with a Form W-2 no later than January 31 of the year following the one for which the report has been completed

true

t or f: When John Butler files his federal income tax return, he must attach Copy A of Form W-2 to his return

false

t or f: Businesses in states with state income tax must prepare additional copies of Form W-2

true

A state tax paid by employers that is used to pay benefits to unemployed workers

state unemployment tax

The payment of payroll taxes to the government

deposit

The chief accountant in an organization, having responsibility for both financial and managerial accounting activities. Sometimes called comptroller

controller

A process that requires an employer to withhold a portion of an employee’s paycheck to pay a court-ordered debt settlement

wage garnishment

The total of gross earnings for all employees earning hourly wages, salaries, and commissions

salary expense

The 12-month period that ends on June 30th of the prior year that is used to determine how frequently a business must deposit payroll taxes

lookback period

t or f: Form W-2 reports an employee’s annual earnings and the withholdings for federal income, social security, and Medicare taxes.

true

t or f: Some employers must deposit payments for withheld employees’ federal income tax and social security and Medicare taxes on the next banking day.

true

t or f: If 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

t or f: The tax base for Medicare tax is the same as the tax base for social security tax.

false

t or f: Employer payroll taxes are business expenses.

true

t or f: 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

t or f: The payroll register provides all the payroll information needed to prepare a payroll.

false

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

true

t or f: The employer social security tax rate is different than the employee social security tax rate.

false

t or f: A business deposits the total of gross wages in a separate payroll checking account.

false

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

true

t or f: Federal unemployment insurance laws require that employers and employees pay taxes for unemployment compensation.

false

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

false

t or f: The timing of payroll tax payments is based on the amount owed.

true

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

false

The source document for paying state unemployment tax is

a- a check

Employees are required to furnish each employee with an annual statement of earnings and withholdings before

d- January 31 of the following year

A state tax used to pay benefits to unemployed workers is

d- state unemployment tax

In general, employers are required to pay state unemployment taxes

b- during the month following each calendar quarter

Until the amounts withheld from employee salaries are paid by the employer, they are recorded as

b- liabilities

The source document for paying employee income tax and social security and Medicare tax is

a- a check

The total earnings subject to federal unemployment tax is referred to as

a- unemployment taxable earnings

The payment of payroll taxes to the government is referred to as a

c- deposit

Each employer must file a _________ federal tax return showing the federal income tax, social security tax, and Medicare tax due the government.

b- quarterly