Deck 12: Preparing Payroll Records

Question 1

Businesses use payroll records to inform employees of their annual earnings and to prepare payroll reports for the government.

Answer 1

True

Question 2

Qualified retirement plans are approved by an act of Congress.

Answer 2

False

Question 3

The first task in preparing a payroll is to determine the number of days worked by each employee.

Answer 3

False

Question 4

Total earnings are sometimes referred to as net pay.

Question 5

Payroll taxes withheld represent a liability for an employer until payment is made.

Question 6

When an employee's earnings exceed the tax base, no more social security tax is deducted.

Question 7

The amount of income tax withheld from each employee's total earnings is determined solely from the number of withholding allowances.

Question 8

The investment income in a Roth IRA is not subject to federal income taxes when withdrawn.

Question 9

A business is required by law to withhold certain payroll taxes from employee salaries.

Question 10

A single person will have more income tax withheld than a married employee.

Question 11

The larger the number of withholding allowances claimed, the larger the amount of income tax withheld.

Question 12

Employee regular earnings are calculated as

A) regular hours times regular rate.
B) total hours divided by regular rate.
C) total hours plus overtime rate.
D) overtime hours minus overtime rate.

Question 13

A business form used to record details affecting payments made to an employee is a(n)

A) employee earnings record.
B) payroll journal.
C) employee accounts payable record.
D) tax withholding form.

Question 14

The Accumulated Earnings column of the employee earnings record

A) shows net pay for the year.
B) is the total earnings since the first of the year.
C) shows net pay for one quarter.
D) is the gross earnings for one quarter.

Question 15

Each employee name is listed in a payroll register along with

A) employee number.
B) marital status.
C) withholding allowances.
D) all of these.

Question 16

The total earnings paid to an employee after payroll taxes and other deductions is recorded in the payroll register's

A) Gross Pay column.
B) Total Earnings column.
C) Net Pay column.
D) Total Deductions column.

Question 17

Individual payroll checks are usually written on a(n)

A) company's regular checking account.
B) separate payroll checking account.
C) special purposes account.
D) employee earnings account.

Question 18

Federal income tax is withheld from employee earnings

A) only in those states electing to do so.
B) in states without a state income tax.
C) only in states where a state income tax is levied.
D) in all 50 states.

Question 19

The withholding allowances of an employee affect

A) social security tax withheld.
B) federal income tax withheld.
C) federal unemployment tax owed.
D) state unemployment tax owed.

Question 20

The amount on the employee earnings record used to determine if certain payroll taxes apply to an employee's earnings is

A) net pay.
B) accumulated earnings.
C) gross earnings.
D) social security taxes.

Question 21

Select the one term that best fits each definition.

-A qualified retirement plan that provides most individuals with a deferred federal income tax benefit.

A) 401(k)
B) commission
C) direct deposit
D) electronic funds transfer
E) individual retirement account
F) Medicare tax
G) net pay
H) qualified retirement plan
I) Roth individual retirement account
J) social security tax
K) tax base
L) withholding allowance

Question 22

Select the one term that best fits each definition.

-The payment of an employee's net pay using electronic funds transfer.

A) 401(k)
B) commission
C) direct deposit
D) electronic funds transfer
E) individual retirement account
F) Medicare tax
G) net pay
H) qualified retirement plan
I) Roth individual retirement account
J) social security tax
K) tax base
L) withholding allowance

Question 23

Select the one term that best fits each definition.

-A method of paying an employee based on the amount of sales the employee generates.

A) 401(k)
B) commission
C) direct deposit
D) electronic funds transfer
E) individual retirement account
F) Medicare tax
G) net pay
H) qualified retirement plan
I) Roth individual retirement account
J) social security tax
K) tax base
L) withholding allowance

Question 24

Select the one term that best fits each definition.

-A federal tax paid for old-age, survivors, and disability insurance.

A) 401(k)
B) commission
C) direct deposit
D) electronic funds transfer
E) individual retirement account
F) Medicare tax
G) net pay
H) qualified retirement plan
I) Roth individual retirement account
J) social security tax
K) tax base
L) withholding allowance

Question 25

Select the one term that best fits each definition.

-A qualified retirement plan sponsored by an employer.

A) 401(k)
B) commission
C) direct deposit
D) electronic funds transfer
E) individual retirement account
F) Medicare tax
G) net pay
H) qualified retirement plan
I) Roth individual retirement account
J) social security tax
K) tax base
L) withholding allowance

Question 26

Select the one term that best fits each definition.

-A deduction from total earnings for each person legally supported by a taxpayer, including the employee.

A) 401(k)
B) commission
C) direct deposit
D) electronic funds transfer
E) individual retirement account
F) Medicare tax
G) net pay
H) qualified retirement plan
I) Roth individual retirement account
J) social security tax
K) tax base
L) withholding allowance

Question 27

Select the one term that best fits each definition.

-The maximum amount of gross earnings on which a tax is calculated.

A) 401(k)
B) commission
C) direct deposit
D) electronic funds transfer
E) individual retirement account
F) Medicare tax
G) net pay
H) qualified retirement plan
I) Roth individual retirement account
J) social security tax
K) tax base
L) withholding allowance

Question 28

Select the one term that best fits each definition.

-A retirement plan that provides individuals with a tax benefit plan approved by the Internal Revenue Service.

A) 401(k)
B) commission
C) direct deposit
D) electronic funds transfer
E) individual retirement account
F) Medicare tax
G) net pay
H) qualified retirement plan
I) Roth individual retirement account
J) social security tax
K) tax base
L) withholding allowance

Question 29

Select the one term that best fits each definition.

-A computerized cash payments system that transfers funds without the use of checks, currency, or other paper documents.

A) 401(k)
B) commission
C) direct deposit
D) electronic funds transfer
E) individual retirement account
F) Medicare tax
G) net pay
H) qualified retirement plan
I) Roth individual retirement account
J) social security tax
K) tax base
L) withholding allowance

Question 30

Select the one term that best fits each definition.

-The total earnings paid to an employee after payroll taxes and other deductions.

A) 401(k)
B) commission
C) direct deposit
D) electronic funds transfer
E) individual retirement account
F) Medicare tax
G) net pay
H) qualified retirement plan
I) Roth individual retirement account
J) social security tax
K) tax base
L) withholding allowance

Question 31

Select the one term that best fits each definition.

-A qualified retirement plan that allows tax-free withdrawals from the account.

A) 401(k)
B) commission
C) direct deposit
D) electronic funds transfer
E) individual retirement account
F) Medicare tax
G) net pay
H) qualified retirement plan
I) Roth individual retirement account
J) social security tax
K) tax base
L) withholding allowance

Question 32

Select the one term that best fits each definition.

-A federal tax paid for hospital insurance.

A) 401(k)
B) commission
C) direct deposit
D) electronic funds transfer
E) individual retirement account
F) Medicare tax
G) net pay
H) qualified retirement plan
I) Roth individual retirement account
J) social security tax
K) tax base
L) withholding allowance