Deck 11: Payroll Taxes, Deposits, and Reports

Question 1

The FUTA tax, like the social security tax, is levied on both the employer and the employee and, therefore, is withheld from employee's pay.

Answer 1

False

Question 2

Both the employer and the employee are responsible for paying

A)Social Security, Medicare, and unemployment taxes.
B)FUTA taxes.
C)SUTA taxes.
D)Social Security and Medicare taxes.

Answer 2

D

Question 3

The frequency of deposits of federal income taxes withheld and social security and Medicare taxes is most dependent on

A)the profit reported by the firm.
B)the number of employees on the payroll.
C)the number of payroll periods a firm has.
D)the amount owed.

Answer 3

D

Question 4

At the end of each quarter, the individual earnings records are totaled.

Question 5

The unemployment compensation tax program is often called the unemployment insurance program.

Question 6

For the purpose of internal control, the same person who prepares payroll checks should also distribute them.

Question 7

To achieve internal control over payroll operations, no changes in employee pay rates should be made without written authorization from management.

Question 8

The frequency of deposits of federal income taxes withheld and social security and Medicare taxes is determined by the amount owed.

Question 9

Form 940, which is used to report the employer's federal unemployment tax, must be filed quarterly.

Question 10

On Form 941, the Employer's Quarterly Federal Tax Return, a firm calculates its liability for the quarter for

A)federal income taxes withheld, social security and Medicare taxes, and FUTA taxes.
B)federal and state income taxes withheld.
C)social security and Medicare taxes and FUTA taxes.
D)federal income taxes withheld and social security and Medicare taxes.

Question 11

The information for preparing Form W-2 is obtained from the employees' individual earnings records.

Question 12

During the week ended June 15, Wiley Automotive's employees earned $2,000 of gross wages and had $300 of federal income tax withheld. All of their employees had already earned over $7,000 of gross wages for the year so none of their wages were subject to FUTA or SUTA tax. However, all of their wages were still subject to Social Security tax of 6.2% and Medicare tax of 1.45%. The journal entry to record Payroll Tax Expense for the pay period would be:

A)

B)

C)

D)

Question 13

If an employee leaves the firm before the end of the year, the employee may ask for and receive a
Form W-2 within 30 days after the request or after the final wage payment.

Question 14

The entry to record a deposit of federal income taxes withheld and social security and Medicare taxes, would include a

A)debit one or more liability accounts and credit an asset account.
B)debit one or more expense accounts and credit one or more liability accounts.
C)debit an expense account and credit one or more liability accounts.
D)debit an asset account and credit an expense account.

Question 15

The payments of employees' federal income taxes withheld and social security and Medicare taxes are periodically

A)deposited in a special-purpose bank account, controlled by the company, until year-end when the funds are sent to the U.S. Treasury Department.
B)deposited in a government-authorized financial institution.
C)sent directly to the Internal Revenue Service.
D)sent to the local office of the Internal Revenue Service.

Question 16

The entry to record the Social security and Medicare taxes paid by a business includes a debit to Payroll Taxes Expense.

Question 17

The entry to record the employer's payroll taxes would include a debit to an expense account and a credit to one or more liability accounts.

Question 18

A business pays the social security tax at the same rate and on the same taxable wages as its employees.

Question 19

Which of the following statements is NOT correct?

A)Payroll tax deposits can be made electronically or by using a Federal Tax Deposit Coupon, Form 8109.
B)The "lookback period," in regard to payroll taxes, is defined as the previous month.
C)The accountant obtains information about wages subject to payroll taxes from the payroll register.
D)Most commercial banks are authorized to accept the employee's tax deposits for federal income taxes withheld and the employer's and employees' shares of social security taxes.

Question 20

Only the employer is responsible for paying

A)FUTA taxes.
B)federal income taxes.
C)social security, Medicare, and FUTA taxes.
D)social security and Medicare taxes.

Question 21

Generally, the maximum earnings subject to state unemployment taxes is

A)the same as the base for social security.
B)smaller than the base for social security.
C)larger than the base for social security.
D)the amount of total earnings.

Question 22

Jackson Autos has one employee. As of March 30, their employee had already earned $6,300. For the pay period ending April 15, their employee earned an additional $2,000 of gross wages. Only the first $7,000 of annual earnings are subject to FUTA of 0.6% and SUTA of 5.4%. The journal entry to record the employer's unemployment payroll taxes for the period ending April 15, would be:

A)

B)

C)

D)

Question 23

All of the following taxes are withheld from an employee's pay except

A)Medicare tax.
B)SUTA tax.
C)Social security tax.
D)Federal income tax.

Question 24

To record the deposit of FUTA tax, the accountant would

A)debit Payroll Taxes Expense and credit Federal Unemployment Tax Payable.
B)debit Federal Unemployment Tax Payable and credit Cash.
C)debit Social Security Taxes Payable and credit Cash.
D)debit Payroll Taxes Expense and credit Cash.

Question 25

Employers usually record unemployment taxes at the end of each

A)year.
B)month.
C)quarter.
D)payroll.

Question 26

All of the following are internal control procedures that are recommended to protect payroll operations except

A)make voluntary deductions from employee earnings based only on a signed authorization from the employee.
B)keep payroll records in locked files.
C)retain all Forms W-4.
D)assign new employees to work in payroll operations.

Question 27

Which of the following statements is correct?

A)The employer sends one copy of the Form 941 for each employee to the Internal Revenue Service.
B)Form 941 is often referred to as a withholding statement.
C)An employee must attach one copy of Form W-4 to his or her personal federal income tax return.
D)An employee must attach one copy of Form W-2 to his or her personal federal income tax return.

Question 28

Most states require that the employer file the state return for unemployment taxes

A)each payroll period.
B)monthly.
C)annually.
D)quarterly.

Question 29

Mr. Zee worked 48 hours during the week ended January 18, 2019. He is paid $12 per hour, and is paid time and a half for all hours over 40 in a week. He had $100 withheld from his pay for federal income taxes, and $20 withheld for health insurance. The combined social security and Medicare tax rate is 7.65%, and the federal and state unemployment tax rates are 0.6% and 3.8%, respectively. All earnings are taxable. What is the net pay for Mr. Zee's current pay check?

A)$167.74
B)$428.81
C)$624.00
D)$456.26

Question 30

Which of the following taxes is not withheld from an employee's pay?

A)Social security tax
B)Medicare tax
C)Federal income tax
D)FUTA tax

Question 31

This preprinted government form is used to report federal unemployment taxes.

A)Form 8109
B)Form W-2
C)Form 940
D)Form 941

Question 32

To record the payment of SUTA tax, the accountant would

A)debit Payroll Taxes Expense and credit State Unemployment Tax Payable.
B)debit State Unemployment Tax Payable and credit Cash.
C)debit Social Security Taxes Payable and credit Cash.
D)debit Payroll Taxes Expense and credit Cash.

Question 33

A copy of the Form W-2 for each employee is submitted to the Social Security Administration along with

A)Form 8109.
B)Form W-3.
C)Form 940.
D)Form 941.

Question 34

Tax returns for the federal unemployment tax are due

A)weekly.
B)monthly.
C)quarterly.
D)annually.

Question 35

Form 941 is filed

A)each payroll period.
B)quarterly.
C)annually.
D)monthly.

Question 36

Mr. Zee worked 48 hours during the week ended January 18, 2019. He is paid $12 per hour, and is paid time-and-a-half for all hours over 40 in a week. He had $100 withheld from his pay for federal income taxes, and $20 withheld for health insurance. The combined social security and Medicare tax rate is 7.65%, and the federal and state unemployment tax rates are 0.6% and 3.8%, respectively. All earnings are taxable. What is the total employer payroll tax expense for Mr. Zee's current paycheck?

A)$47.74
B)$75.19
C)$0
D)$27.45

Question 37

Each employee of a firm will receive several copies of Form W-2, the Wage and Tax Statement, from the

A)employer once a quarter.
B)federal government once a year.
C)employer with each paycheck.
D)employer once a year.

Question 38

Which of the following statements is not correct?

A)A few states levy an unemployment tax on the employee that must be withheld from the employee's pay.
B)The reduction of state unemployment taxes because of favorable experience ratings reduces the credit allowable against the federal unemployment tax.
C)One of the purposes of the unemployment insurance program is to stabilize employment and reduce unemployment.
D)The unemployment insurance program is a federal program.

Question 39

Which of the following forms is submitted with a copy of the Form W-2 for each employee to the Social Security Administration?

A)Form W-3
B)Form 941
C)Form W-4
D)Form 940

Question 40

If at the end of the year the firm owes a balance for workers' compensation insurance, the adjusting entry includes a

A)a debit to Payroll Taxes Expense and a credit to cash.
B)debit to Workers' Compensation Insurance Payable a credit to Workers' Compensation Insurance Expense.
C)a debit to Workers' Compensation Insurance Expense and a credit to Workers' Compensation Insurance Payable.
D)a debit to Workers' Compensation Refund Receivable and a credit to Workers' Compensation Insurance Expense.

Question 41

For which of the following is there no limit to the amount of wages subject to the tax?

A)Social Security tax
B)State unemployment tax
C)Medicare tax
D)Federal unemployment tax

Question 42

Alfred Spindle earned gross wages of $1,850 for the week ended June 21, 2019. His gross wages year to date, prior to his June 21 paycheck, were $42,620. He had $136 withheld from his pay for federal income taxes, and $86 for health insurance. Social Security tax is 6.2% and Medicare tax is 1.45%; the federal unemployment tax rate is 0.6% and the state unemployment tax rate is 4.2%, both on a maximum of $7,000 per each employee's annual earnings. What is the total employer payroll tax expense associated with Alfred's June 21, 2019, paycheck?

A)$141.53
B)$114.70
C)$230.33
D)$26.83

Question 43

Identify the list of accounts below that would normally all have a credit balance.

A)Social Security Tax Payable, Medicare Tax Payable, Employee Income Tax Payable.
B)Worker's Compensation Insurance Expense, Prepaid Insurance, Medicare Tax Payable.
C)Worker's Compensation Insurance Payable, Salaries Payable, Salaries Expense.
D)Payroll Taxes Expense, State Unemployment Tax Payable, Wages Payable.

Question 44

Roy DeSoto earns a regular hourly salary of $24.50. He is paid time-and-a-half for all hours in excess of 40 in the week. For the week ended March 8, 2019, he worked a total of 50 hours. His gross wages year to date, prior to his March 8, paycheck, are $11,980. Social Security Tax is 6.2% on a maximum of $122,700 of gross wages per year, Medicare Tax is 1.45%, federal unemployment tax is 0.6% and state unemployment tax is 4.2%, both on a maximum of $7,000 of gross wages per year. What is the employer's payroll tax expense for Roy for the week ended March 8, 2019?

A)$154.96
B)$103.09
C)$170.47
D)$123.97

Question 45

Samantha Rodriguez had gross earnings for the pay period ending 10/15/19 of $5,785. Her total gross earnings as of 9/30/19 were $116,700. Social Security taxes are 6.2% on a maximum earnings of $122,700 per year. The Social Security tax due by her employer from her 10/15/19 paychecks is:

A)$61.07
B)$372.00
C)$358.67
D)$442.55

Question 46

Jerry Little's gross wages as of October 31 were $110,000. He earned gross wages of $4,000 for the pay period ended November 15, 2019. Deducted from his paycheck this period, were federal income taxes of $400, state income taxes of $150, social security of 6.2% on the first $122,700 and Medicare tax of 1.45%. State Unemployment Tax is 4%, and Federal Unemployment tax is 0.6% on the first $7,000 of annual earnings. Calculate the employer payroll income taxes associated with Jerry's November 15 paycheck.

A)$58.00
B)$306.00
C)$248.00
D)$490.00

Question 47

ABC Consulting had two employees with the following earnings information:


-
Use the table above to calculate the employer payroll income taxes associated with Henry's December 15 paycheck given the following tax rates: Social Security tax of 6.2% is levied on the first $122,700 of annual wages and the Medicare tax rate is 1.45% on all earnings. State unemployment tax of 5.4% and federal unemployment tax of 0.6% are both levied on only the first
$7,000 of each employee's annual earnings.

A)$484.00
B)$244.00
C)$58.00
D)$111.60

Question 48

Identify the list of accounts below that would normally all have a debit balance.

A)Social Security Tax Payable, Medicare Tax Payable, Employee Income Tax Payable.
B)Worker's Compensation Insurance Expense, Prepaid Insurance, Medicare Tax Payable.
C)Payroll Taxes Expense, Salaries Expense, Workers' Compensation Insurance Expense.
D)Worker's Compensation Insurance Payable, Salaries Payable, Salaries Expense.

Question 49

George's Gameroom had two employees with the following earnings information:


-
Use the table above and calculate how much of Hillary's December 15 paycheck is still subject to Social Security tax given that the tax is levied on the first $122,700 of annual wages and the Medicare tax rate is 1.45% on all earnings.

A)$4,400
B)$2,500
C)$2,800
D)$6,000

Question 50

Mary Gonzalez had total cumulative gross earnings of $5,800 as of 1/31/19. Her gross earnings for the pay period ending 2/15/19 were $3,000. If federal unemployment taxes are 0.6% on a maximum earnings of $7,000 per year, how much federal unemployment tax will be paid by Mary and how much will be paid by her employer for her earnings of 2/15/19?

A)Mary will pay $7.20 and her employer will also pay $7.20.
B)Mary will pay $0 and her employer will pay $7.20.
C)Mary will pay $0 and her employer will pay $10.80.
D)Mary will pay $0 and her employer will pay $0.

Question 51

Which of the following payroll taxes is not paid by the employee?

A)FICA (Social Security and Medicare)
B)federal unemployment tax
C)federal income tax
D)state income tax

Question 52

Alfred Spindle earned gross wages of $1,850 for the week ended January 18, 2019. His gross wages year to date, prior to his January 18 paycheck, were $3,700. He had $96 withheld from his pay for federal income taxes, and $56 for health insurance. Social Security tax is 6.2% and Medicare tax is 1.45%; the federal unemployment tax rate is 0.6% and the state unemployment tax rate is 4.2%, both on a maximum of $7,000 per each employee's annual earnings. What is the total employer payroll tax expense associated with Alfred's January 18, 2019, paycheck?

A)$230.33
B)$114.70
C)$92.50
D)$26.83

Question 53

ABC Consulting had two employees with the following earnings information:


-
Use the table above to calculate the employer payroll income taxes associated with Poppy's December 15 paycheck given the following tax rates: Social Security tax of 6.2% is levied on the first $122,700 of annual wages and the Medicare tax rate is 1.45% on all earnings. State unemployment tax of 5.4% and federal unemployment tax of 0.6% are both levied on only the first
$7,000 of each employee's annual earnings.

A)$37.20
B)$45.90
C)$69.90
D)$81.90

Question 54

Alfred Spindle earned gross wages of $1,850 for the week ended June 21, 2019. His gross wages year to date, prior to his June 21 paycheck, were $42,620. He had $136 withheld from his pay for federal income taxes, and $86 for health insurance. Social Security and is 6.2% and Medicare tax is 1.45%; the federal unemployment tax rate is 0.6% and the state unemployment tax rate is 4.2%, both on a maximum of $7,000 per each employee's annual earnings. The journal entry to record the employer payroll tax expense associated with Alfred's June 21, 2019, paycheck would include

A)A debit to Payroll Tax Expense
B)A debit to FICA Tax Payable
C)A debit to Unemployment Compensation Tax Payable
D)A credit to Payroll Tax Expense

Question 55

Samantha Rodriguez had gross earnings for the pay period ending 10/15/19 of $5,785. Her total gross earnings as of 9/30/19 were $115,700. Social Security taxes are 6.2% on a maximum earnings of $122,700 per year and Medicare taxes are 1.45% of all earnings. The Medicare tax due by her employer from her 10/15/19 paychecks is:

A)$83.88
B)$442.55
C)$297.60
D)$358.67

Question 56

Which of the following are employer payroll taxes:

A)state unemployment tax and state income tax
B)federal income tax withheld and social security tax
C)FICA (Social Security and Medicare)and federal and state unemployment taxes
D)federal and state unemployment tax and federal income tax withheld

Question 57

George's Gameroom had two employees with the following earnings information:


-
Use the table above to calculate how much of Barbara's December 15 paycheck is still subject to state unemployment tax given that the rate is 4% and federal unemployment tax is 0.6% and both taxes are levied on only the first $7,000 of each employee's annual earnings.

A)$1,800
B)$5,900
C)$1,100
D)$700

Question 58

Which of the following is not an employer payroll tax:

A)FICA (Social Security and Medicare)
B)federal unemployment tax
C)state unemployment tax
D)federal income tax

Question 59

Kristy Casey earns $39,000 per year and is paid once a month. For January, she had $188 withheld from her pay for federal income taxes, and $52 withheld for health insurance. Social Security tax is 6.2% on a maximum of $122,700 of gross wages per year, and Medicare tax is 1.45%; the federal unemployment tax rate is 0.6% and state unemployment tax rate is 4.2%. What is the total employer payroll tax expense for Kristy's January paycheck?

A)$248.63
B)$404.63
C)$385.13
D)$162.50

Question 60

Rick O'Shea, the only employee of Hunter Furniture Company, makes $30,000 per year and is paid once a month. For the month of January, his federal income taxes withheld are $180, state income taxes withheld are $37, social security is 6.2% on a maximum wages of $122,700, Medicare tax is 1.45%, State Unemployment Tax is 4.2%, and Federal Unemployment tax is 0.6%, both on a maximum wages of $7,000 per employee. What is the employer's payroll tax expense associated with Rick's paycheck?

A)$120.00
B)$311.25
C)$150.00
D)$191.25

Question 61

Form 941 is used to report federal income taxes withheld, social security taxes, and ________ taxes.

Question 62

The payroll register of Reynolds Company showed total employee earnings of $2,320 for the week ended May 10, 2019. Compute the employer's payroll taxes for the period. The tax rates are: Social security tax, 6.2 percent; tax, 1.45 percent; FUTA tax, 0.6 percent; SUTA tax, 2.2 percent. All earnings are taxable. Record the employer's payroll taxes for the period on page 4 of a general journal.

Question 63

After the JPR Corporation paid its employees on May 15, 2019, and recorded the corporation's share of payroll taxes for the payroll paid that date, the firm's general ledger showed a balance of
$1,730 in the Social Security Tax Payable account, a balance of $356 in the Medicare Tax Payable account, and a balance of $1,972 in the Employee Income Tax Payable account. On May 16, 2019, the business issued a check to deposit the taxes owed in the local bank. Record this transaction on page 7 of a general journal.

Question 64

The payroll register of the Fox Manufacturing Company showed total employee earnings of
$32,000 for the week ended April 19, 2019. Compute each of the employer's payroll taxes for the period. Use a rate of 6.2 percent for the employer's share of the social security tax, 1.45 percent for Medicare tax, 0.6 percent for FUTA tax, and 5.4 percent for SUTA tax. Assume all earnings are taxable.

Question 65

After the Mansley Company paid its employees on July 15, 2019, and recorded the corporation's share of payroll taxes for the payroll paid that date, the firm's general ledger showed a balance of
$1,365 in the Social Security Tax Payable account, a balance of $321 in the Medicare Tax Payable account, and a balance of $1,962 in the Employee Income Tax Payable account. On July 16, 2019, the business issued a check to deposit the taxes owed in the local bank. Record this transaction on page 23 of a general journal.

Question 66

Form 940 must be filed________time(s)a year.

Question 67

Which of the following payroll taxes is not paid by the employee?

A)state income tax
B)federal unemployment tax
C)federal income tax
D)FICA (Social Security and Medicare)

Question 68

State Unemployment Tax Payable is ________ when the tax is paid to the state.

Question 69

Form 940 is used to report ________ taxes.

Question 70

The entry to record the deposit of federal income taxes withheld includes a ________ to the Employee Income Tax Payable account.

Question 71

After the ABC Corporation paid its employees on June 15, 2019, and recorded the corporation's share of payroll taxes for the payroll paid that date, the firm's general ledger showed a balance of
$2,380 in the Social Security Tax Payable account, a balance of $685 in the Medicare Tax Payable account, and a balance of $3,050 in the Employee Income Tax Payable account. On June 16, 2019, the business issued a check to deposit the taxes owed in the local bank. Record this transaction on page 15 of a general journal.

Question 72

The entry to record a payroll tax that is incurred by the employer would include a debit to a(n)
________ account.

Question 73

A firm must issue a Form ________ to each employee by January 31 of the year following the year during which the wages were earned.

Question 74

A business pays ________ and Medicare taxes at the same rate and on the same taxable wages as its employees.

Question 75

Form ________ is often referred to as a withholding statement.

Question 76

The payroll register of Rapid Repairs showed total employee earnings of $1,870 for the week ended April 5, 2019. Compute the employer's payroll taxes for the period. The tax rates are: Social security tax, 6.2 percent; Medicare tax, 1.45 percent; FUTAtax, 0.6 percent; SUTA tax, 2.2 percent. All earnings are taxable. Record the employer's payroll taxes for the period on page 4 of a general journal.

Question 77

The premium rate on ________ insurance is determined by the risk involved in the work performed.

Question 78

The payroll register of the Retro Manufacturing Company showed total employee earnings of
$37,000 for the week ended January 18, 2019. Compute the employer's payroll taxes for the period. Use a rate of 6.2 percent for the employer's share of the social security tax, 1.45 percent for Medicare tax, 0.6 percent for FUTA tax, and 5.4 percent for SUTA tax. Assume all earnings are taxable.

Question 79

The payroll register of the Hound Manufacturing Company showed total employee earnings of
$36,000 for the week ended September 20, 2019. Compute each of the employer's payroll taxes for the period. Use a rate of 6.2 percent for the employer's share of the social security tax, 1.45 percent for Medicare tax, 0.6 percent for FUTA tax, and 5.4 percent for SUTA tax. Assume all earnings are taxable.

Question 80

After the Marion Corporation paid its employees on November 15, 2019, and recorded the corporation's share of payroll taxes for the payroll paid that date, the firm's general ledger showed a balance of $1,925 in the Social Security Tax Payable account, a balance of $519 in the Medicare Tax Payable account, and a balance of $2,105 in the Employee Income Tax Payable account. On November 16, 2016, the business issued a check to deposit the taxes owed in the local bank. Record this transaction on page 5 of a general journal.