Deck 9: Payroll

Question 1

A self-employed person has at least three employees.

Answer 1

False

Question 2

FICA stands for federal withholding tax.

Answer 2

False

Question 3

In the portion formula, the commission a worker receives would be the base.

Answer 3

False

Question 4

A married person will pay in more Social Security and Medicare tax than a single person.

Question 5

Being paid biweekly means the salary is paid twice a month.

Question 6

The Fair Labor Standards Act entitles employees to time and a half over 36 1/2 hours.

Question 7

Differential pay means that there is one fixed rate per unit that is produced.

Question 8

An employee's commission is always based on total dollar sales.

Question 9

The Federal Insurance Contributions Act funds the federal income tax program.

Question 10

Net pay - deductions = gross pay.

Question 11

A draw is an advance that need not be repaid if the commission does not exceed the draw.

Question 12

Straight piece rate pay provides a worker an incentive to produce more since pay is based on the number of units produced.

Question 13

The number of dependents one claims does not affect the amount of Social Security and Medicare tax paid.

Question 14

A calendar year is July 1 to June 30.

Question 15

The employer will match the employee's Social Security and Medicare contribution.

Question 16

An override can never help increase a manager's total pay.

Question 17

Being paid biweekly is the same as being paid semimonthly.

Question 18

Overtime is always calculated at time and a half the regular rate.

Question 19

Gross pay = hours worked × rate per hour.

Question 20

A variable commission scale means that for different levels of net sales there are different commission rates.

Question 21

Exempt wages means not taxable wages.

Question 22

Social Security and Medicare tax:

A) Have different rates
B) Are paid only by employees
C) Are based on the number of dependents not claimed
D) Are paid by only the employer
E) None of these

Question 23

The base amount for calculating Social Security taxes never changes from year to year.

Question 24

FUTA tax is computed by the wage-bracket table.

Question 25

The FICA tax now requires separate reporting for Social Security and Medicare.

Question 26

Payroll registers cannot record cumulative earnings.

Question 27

The higher the number claimed on form W-2, the less in taxes will be taken out of one's paycheck.

Question 28

Differential pay schedule is based on:

A) FICA
B) Different levels of performance
C) FUTA
D) Gross pay
E) None of these

Question 29

A quarter is 13 weeks.

Question 30

SUTA tax is usually paid quarterly.

Question 31

The more allowances claimed on Form W-4:

A) The less money deducted for FIT
B) The more money deducted for FIT
C) No FIT ever deducted
D) FUTA increase
E) All of these

Question 32

Circular E from the Internal Revenue Service contains many tax tables.

Question 33

The W-4 is used strictly to calculate Social Security and Medicare taxes.

Question 34

SUTA tax has no maximum amount that can be paid in a calendar year.

Question 35

The Labor Fair Standards Act:

A) Sets minimum wage standards
B) Sets overtime regulations
C) Is a federal act
D) May exempt certain workers
E) All of these

Question 36

John Flynn works at Stutz Toyota and is paid a(n) __________ against his earned commissions.

A) Bonus to one's salary
B) Salary
C) Draw
D) Amount that is never paid back
E) None of these

Question 37

The percentage method aids in calculating:

A) SUTA
B) FUTA
C) FICA
D) FIT
E) None of these

Question 38

The percentage method can be used to determine the amount of FIT.

Question 39

The taxable earnings column of a payroll register shows the actual tax.

Question 40

If you are paid twice a month, you are being paid:

A) Weekly
B) Biweekly
C) Semimonthly
D) Monthly
E) None of these

Question 41

Jasper works at Panera Company for $11.25 per hour plus a commission of 2% of her sales. Assuming Jasper worked 26 hours last week and had sales of $2,610, her gross pay is:

A) $290.50
B) $344.70
C) $351.20
D) $342.00
E) None of these

Question 42

Jill Hartman earns $750 per week plus 3% of sales in excess of $6,500. If Jill sells $25,000 in the first week, her earnings are:

A) $945
B) $1,305
C) $1,500
D) $1,503
E) None of these

Question 43

Alvin Shore sells jewelry at Ross Jewelers. Ross pays Alvin $8.50 per hour plus a 6% commission on all sales. Assume Alvin works 36 hours and had sales of $4,900. What is Alvin's gross pay?

Question 44

Bob Neff, owner of an automotive dealership, pays one of his salesmen, Mike, a $1,300 draw per week plus 6% on all commission sales. Mike sold seven cars over the four-week period, totaling $186,900 for the month. Mike's commission minus the draw is:

A) $6,410
B) $6,041
C) $6,014
D) $5,200
E) None of these

Question 45

Bill Burne's earnings are subject to deductions for Social Security, Medicare, and FIT. To date his cumulative earnings are $110,000. This week Bill earns $1,200. Bill, who is married, is paid weekly and claims three exemptions. Assume the Social Security rate is 6.2% on $118,500 and 1.45% for Medicare. His net pay for the week is (use percentage table in handbook to calculate FIT):

A) $528.43
B) $1,005.30
C) $1,690.93
D) $1,609.93
E) None of these

Question 46

Percentage method tables can show:

A) Weekly period rates
B) Biweekly payroll rates
C) Semimonthly payroll rates
D) Monthly payroll rates
E) All of these

Question 47

Lana Powell has cumulative earnings of $116,000 at the end of September. In the first week in October she earns $2,000. The amount deducted for Social Security and Medicare from her check is (assume Social Security rate of 6.2% on $118,500 and Medicare of 1.45%):

A) $29.00
B) $153.00
C) $53.20
D) $92.00
E) None of these

Question 48

Leo Corporation pays its employees on a graduated commission scale: 6% on the first $40,000 in sales, 7% on sales from $40,000 to $80,000, and 9% on sales greater than $80,000. Bernie Kaminsky had sales of $105,000. His commission is:

A) $2,400
B) $7,450
C) $5,200
D) $1,350
E) None of these

Question 49

David is paid on a graduated commission scale at Nooter Company. He receives 2% commission on the first $20,000, 6% on sales from $20,000 to $70,000, 8.5% commission on sales from $70,000 to $100,000, and 10% commission on sales over $100,000. David had sales of $82,000. His commission is:

A) $8,200
B) $6,200
C) $4,240
D) $4,420
E) None of these

Question 50

FUTA tax is paid:

A) By an employee
B) By the employer
C) By both the employee and the employer
D) Only weekly
E) None of these

Question 51

Mindy makes boots for Belleville Boot Factory. She is paid on the following differential pay scale: What is Mindy's pay if she produced 192 boots for the week?

A) $602.30
B) $702.90
C) $1,152.00
D) $620.30
E) None of these

Question 52

FICA tax base:

A) Never changes
B) Changes yearly
C) Changes once every two years
D) Is never more than $60,000
E) None of these

Question 53

Lee Wong is a sales clerk at Sears. She is paid $8.00 per hour plus a commission of 4% on all sales. Assuming Lee works 39 hours and has sales of $4,000, her gross pay is:

A) $312
B) $321
C) $472
D) $427
E) None of these

Question 54

The taxable earnings column of a payroll register records:

A) What wages will be taxed
B) The actual tax
C) The estimated tax
D) All of these
E) None of these

Question 55

Sandi works for Elizabeth Arden Cosmetics and earns $500 per week salary plus 4% commission on sales over $2,000. If Sandi sold $2,733 last week, what was her salary?

A) $1,046.66
B) $2,743.00
C) $609.32
D) $906.32
E) None of these

Question 56

Jim Ross is an automobile salesman who receives a salary of $500 per week plus a commission of 3% on all sales. During a four-week period he sold $42,000 worth of cars. What were Jim's average earnings?

A) $404
B) $1,760
C) $1,670
D) $440
E) None of these

Question 57

Jim Smith is a salesman who receives a $1,100 draw per week. He receives a 12% commission on all sales. Sales for Jim were $205,000 for the month. Assuming a four-week month, Jim's final commission after the draw for the month is:

A) $24,600
B) $20,200
C) $23,500
D) $26,400
E) None of these

Question 58

Ron Swift earned $1,500 last week. He is married, is paid biweekly, and claims two exemptions. Using the percentage method (use tables in the handbook), his income tax is:

A) $109.69
B) $116.40
C) $93.76
D) $140.88
E) None of these

Question 59

To date, Jay Ward has cumulative earnings of $118,000. This week he is paid $3,000. The total amount of Social Security tax for this week is (assume a rate of 6.2% on $118,500 for Social Security and 1.45% for Medicare):

A) $186.00
B) $31.00
C) $57.66
D) $180.00
E) None of these

Question 60

A merit rating system for SUTA means:

A) Rates cannot change
B) State rates will always be lower
C) Rate varies with employment record
D) FUTA will increase
E) None of these

Question 61

Calculate the gross pay of Alice Flynn, a corn picker, assuming she picked 4,150 ears of corn:

Question 62

Aley Company pays all its employees a graduated commission scale: 3% on the first $30,000 sales, 5% on sales from $30,001 to $110,000, and 7% on sales more than $110,000. Jim Jones, an employee of Aley, had $130,000 in sales. What commission did Jim earn?