Deck 10: The Employers Tax Responsibilities: Principles and Procedures

Question 1

The employer pays CPP premiums in what ratio to employee CPP deductions?

A) 1.4 times employee CPP deductions
B) 1/4 of employee CPP deductions
C) Matching employee CPP deductions
D) 1/2 employee CPP deductions

Answer 1

C

Question 2

If the employees had $250 CPP, $350 EI and $450 Income Tax deducted from their paycheques, then the Employer's Benefits expense would be

A) $1,790.
B) $600.
C) $740.
D) $1,050.

Answer 2

C

Question 3

If the employee's EI deductions for the week total $300, the employer's EI contribution will be

A) $30.
B) $300.
C) $3.
D) $420.

Answer 3

D

Question 4

If the employees have had $200 in CPP contributions and $300 in EI contributions deducted from their paycheques, then the Employer's Benefits Expense would be

A) $500.
B) $580.
C) $620.
D) $700.

Question 5

If the employees have had $300 in CPP contributions and $400 in EI contributions deducted from their paycheques, then the amount to be remitted to the Receiver General would be (excluding income taxes)

A) $700.
B) $1,560.
C) $860.
D) $1,520.

Question 6

The general journal entry to record payroll benefits and taxes generally includes

A) a debit to Salaries Expense.
B) a credit to Salaries Payable.
C) a debit to Employee Benefits Expense.
D) a debit to Sales Tax Expense.

Question 7

What type of an account is Wages and Salaries Payable?

A) Asset
B) Liability
C) Revenue
D) Expense

Question 8

If the employees' CPP deductions for the week total $500, the employer's CPP contribution will be

A) $500.
B) $50.
C) $20.
D) $700.

Question 9

The employer pays EI premiums in what ratio to employee EI deductions?

A) 1.4 times employee EI deductions
B) 4 times employee EI deductions
C) 2 times employee EI deductions
D) Does not contribute

Question 10

If the employees had $250 CPP, $350 EI and $450 Income Tax deducted from their paycheques, then the total amount to be remitted to the Receiver General would be

A) $1,790.
B) $600.
C) $740.
D) $1,050.

Question 11

If the employee's CPP deductions for the week total $300, the employer's CPP contribution will be

A) $30.
B) $300.
C) $3.
D) $420.

Question 12

If Geharty Company had deducted $2,000 Income tax, $200 CPP, and $120 EI from the employee's cheques, then the Employee Benefits Expense would be

A) $2,320.
B) $320.
C) $400.
D) $368.

Question 13

The employer records deductions from the employee's paycheque

A) as debits to expense accounts.
B) as credits to liability accounts until paid.
C) as debits to asset accounts until paid.
D) as credits to capital accounts.

Question 14

The entry to record the payroll tax expenses would include

A) a credit to Federal Income Taxes Expense.
B) a credit to EI Payable and CPP Payable.
C) a credit to Taxes Payable.
D) a credit to Wages Payable.

Question 15

If the employees had $200 CPP, $300 EI and $400 Income Tax deducted from their paycheques, the employer would remit

A) $900.
B) $1,120.
C) $1,520.
D) $1,920.

Question 16

Which of the following is a payroll tax paid by both employee and employer?

A) CPP & EI
B) EI only
C) CPP only
D) Income Tax

Question 17

Employment Insurance premiums are paid by

A) the employer.
B) the employee.
C) both the employer and employee.
D) the Provincial Government.

Question 18

In addition to CPP and EI, employers often share the expense of

A) garnishees.
B) savings plans.
C) health care plans.
D) income tax.

Question 19

Personal Income Tax rates

A) vary from province to province.
B) are the same in every province.
C) vary according to the employee's cash on hand.
D) are set by the Municipal Government annually.

Question 20

If the employees' EI deductions for the week total $500, the employer's EI contribution will be

A) $500.
B) $50.
C) $20.
D) $700.

Question 21

The account credited for all payroll deductions is Employee Benefits Expense.

Question 22

Wages and Salaries Expense is

A) equal to net pay.
B) equal to gross pay.
C) equal to the employer's taxes.
D) None of the above are correct.

Question 23

What type of account is Payroll Tax Expense?

A) Asset
B) Liability
C) Revenue
D) Expense

Question 24

The payroll tax expense is recorded at the same time the payroll is recorded.

Question 25

CPP Payable normally has a credit balance.

Question 26

The Employee Benefits Expense entry is recorded at the time the payroll is recorded.

Question 27

The Soup Company had made the following entry to record the payroll:
Salaries Expense 20,000.00
CPP Payable 770.00
EI Payable 376.00
Income Tax Payable 24180.00
Wages & Salaries Payable 14,674.00
Produce the entry to record the employer's contributions.

Question 28

The employer must contribute 1.4 times the employee's Income Tax contributions.

Question 29

The following entry has been made by the bookkeeper of Walter's Windows:
Salaries Expense 8,000.00
CPP Payable 200.00
EI Payable 110.00
Medical Plan Payable 80.00
Income Tax Payable 1,000.00
Wages and Salaries Payable 6,610.00
To Record the Payroll
Required:
The amount of the Employee Benefits Expense related to the payroll. Walter's Windows matches its employee's medical plan contribution.

Question 30

The following information from the payroll register of Orville's Oil Spray is available:
Name Gross Pay CPP EI FIT Net Pay
Joachim 800 36.27 15.04 130.81 617.88
Yourself 850 0.00 15.98 146.19 687.83
Steve 900 41.22 16.92 162.02 679.84
2550 77.49 47.94 439.02 1985.55
Produce the general journal entry to record the employer's contributions.

Question 31

The employer must match the employee's Income Tax deductions.

Question 32

The employer must contribute 1.4 times the employee's CPP contributions.

Question 33

The information needed to make the journal entries to record the wages and salaries expense comes from

A) form TD1-A.
B) the look-back period.
C) the payroll register.
D) form PD7A.

Question 34

The balance in the Wages and Salaries Expense account is equal to net pay.

Question 35

The debit amount to Payroll Tax Expense represents

A) the employer's portion of the payroll taxes.
B) the employees' portion of the payroll taxes.
C) the employer's and employees' portion of the payroll taxes.
D) None of the above are correct.

Question 36

The Super Sandwich Company had made the following entry to record the payroll:
Salaries Expense 10,000.00
CPP Payable 385.00
EI Payable 188.00
Income Tax Payable 2,090.00
Wages & Salaries Payable 7,337.00
Produce the entry to record the employer's contributions.

Question 37

The employer's EI contribution is 1.4 times that of the employee's deduction.

Question 38

Using the information below, determine the amount of the payroll benefits expense for Quinn's Quizzes.
Employee Gross Pay CPP Deducted EI Deducted
J. Gross 1,000 46.17 18.80
P. James 500 21.42 9.40
Q. Quan 600 26.37 11.28

Question 39

The premium for worker's compensation insurance is based on the total estimated gross payroll.

Question 40

The Wages and Salaries Expense account would be used to record

A) net earnings for the office workers.
B) a credit to the amount owed to the office workers.
C) gross earnings for the office workers.
D) a debit for the amount of net pay owed to the office workers.

Question 41

What is the purpose of the Canada Pension Plan and how are the employer's contributions calculated?

Question 42

The Wages and Salaries Payable account would be used to record

A) gross earnings of the employees.
B) net earnings of the employees not paid.
C) cumulative earnings of the employees.
D) the paid portion of the earnings.

Question 43

When remitting EI, the entry would be

A) debit EI Expense, credit Cash.
B) debit Cash, credit EI Expense.
C) debit Cash, credit EI Payable.
D) debit EI Payable, credit Cash.

Question 44

Payroll Tax Expense or Employee Benefits Expense are possible account titles employers use for the employer's payroll taxes (EI and CPP).

Question 45

Why is income tax NOT considered an expense of the employer?

Question 46

When remitting CPP, the entry would be

A) debit Cash, credit CPP Payable.
B) debit CPP Expense, credit Cash.
C) debit CPP Payable, credit Cash.
D) debit Cash, credit CPP Expense.

Question 47

An employer might agree to pay a portion of the following items to which the employees contribute.

A) Provincial tax
B) Federal tax
C) Union dues
D) Medical plan

Question 48

What is the threshold at which employers would be required to send in their remittance more often than monthly?

A) $10,000
B) $12,000
C) $15,000
D) $1,000

Question 49

Jungwirth Mechanical has five payrolls for the month. Each payroll had $9,000 salary, $1,800 income tax, $430 CPP, $165 EI, $300 Health Plan, and $6,305 net pay. What amount would the company send to the CRA as the remittance from this month?

Question 50

The 'entry' to record payment of statutory payroll deductions is generally recorded first in the

A) general or cash payments journal.
B) general ledger.
C) worksheet.
D) chart of accounts.

Question 51

The employer's remittance to CRA includes

A) CPP, EI, and extended health care.
B) income tax, CPP, and EI
C) income tax, CPP, EI, and extended health care.
D) income tax, CPP, EI, and Workers Compensation.

Question 52

The account credited for the employer's portion of CPP is CPP Payable.

Question 53

The payroll register for Marty's Marlin Boat reads as follows:
Name Gross Pay CPP EI FIT Union Medical Net Pay
John 300 11.52 5.64 11.86 10.00 15.00 245.98
Marty 250 9.04 4.70 0.00 10.00 15.00 211.26
550 20.56 10.34 11.86 20.00 30.00 457.24
The company matches the employee's medical plan contributions on a one-to-one basis.
Required:
The general journal entry to record the employer's portions.

Question 54

The employer records deductions from the employee's paycheque

A) as debits to expense accounts.
B) as credits to liability accounts until paid.
C) as debits to asset accounts until paid.
D) as credits to capital accounts.

Question 55

Employers share with their employees the total cost of

A) income tax.
B) EI and income tax.
C) CPP, EI, and income tax.
D) CPP and EI.

Question 56

Why would a company use a separate payroll cash account?

A) Provides for better internal control
B) Ease of account reconciliation
C) Determine whether or not the employee has cashed their cheque
D) All of the above are correct.

Question 57

If Wages and Salaries Payable is debited, what account would most likely be credited?

A) Cash
B) Wages and Salaries Expense
C) Payroll Expense
D) CPP Payable

Question 58

The employer's EI contribution is based on the employee's EI deductions.

Question 59

Explain the formula used to compute EI deductions. Is it easier or more difficult to calculate than the CPP deduction?

Question 60

Businesses with payroll deductions under $15,000 must remit payroll withholdings quarterly.

Question 61

Companies have a business number given by the federal government that uniquely identifies them.

Question 62

After sending the monthly payroll remittance, CPP Payable would decrease.

Question 63

Which of the following is NOT a form required by CRA in the payroll process?

A) T4
B) T4 Summary
C) T4X
D) PD7A

Question 64

Every business with employees must have a unique identification number issued by the Canada Revenue Agency.

Question 65

The last step in the payroll process for the year is

A) calculating gross pay.
B) mail the T4 Summary and the T4 Supplementary.
C) completing the payroll register.
D) mailing the record of employment.

Question 66

For a weekly payroll, the journal entry to record the employer's portions should also be done weekly.

Question 67

In completing the annual T4 Summary, which of the following is NOT true?

A) The total of all T4's CPP, EI and tax deductions must agree with the totals on the T4 Summary.
B) The T4 Summary must be filed each year by February 28.
C) The T4 Summary must contain your Canada Revenue Agency Account Number.
D) The T4 must be sent out by December 31.

Question 68

The employees collectively earn a gross wage of $98,000 for the pay period, but the employer says that they cost $123,300. Discuss the discrepancy.

Question 69

Employers should use a T4 Summary form to remit monthly employee deductions to the Canada Revenue Agency.

Question 70

Most smaller companies must send in their remittance every week if they have a weekly pay period.

Question 71

The employer's and the employee's contributions to CPP, EI and Income Tax must be remitted by all employers to the Provincial Government monthly.

Question 72

The form that contains information about gross earnings given to each employee by February 28 of the year following is the

A) T4 Summary.
B) ROE.
C) T4.
D) TD1.

Question 73

Different remittance rules apply to employers based on the amount collected and owed by that employer.

Question 74

Employers should use a PD7A form to remit monthly employee deductions to the Canada Revenue Agency.

Question 75

Use a Statement of Account for Current Source Deductions to remit monthly employee deductions to the Canada Revenue Agency.

Question 76

A T4 Summary is filed

A) annually.
B) quarterly.
C) monthly.
D) depends on the amount owed.

Question 77

The cheque to remit CPP, EI and Income Tax would be remitted to CRA by the 15th of the following month.

Question 78

Why are the employee deductions recorded as payables on the employer's books?

Question 79

The forms T4 and T4-T4A Summary must be submitted to the employees and Federal Government respectively by

A) the 15th of the month following.
B) when an employee leaves a job.
C) February 28 of the year following.
D) April 30 of the year following.

Question 80

Why should employers make every effort to submit the necessary deductions to CRA on or before the appropriate deadline?