Deck 10: Payroll Computations, Records, and Payment

Question 1

If an employee whose regular hourly rate is $9 and whose overtime rate is 1.5 times the regular rate works 42 hours in one week, the employee's gross pay is $378.

Answer 1

False

Question 2

Time sheets or time cards are used to keep a record of hours worked each day by each employee paid on an hourly basis.

Answer 2

True

Question 3

The net amount due employees for their wages is recorded as a debit to Salaries and Wages Payable.

Answer 3

False

Question 4

FICA tax is commonly referred to as ____________________ tax.

Question 5

Earnings in excess of the social security base amount are not taxed.

Question 6

Salaried employees who hold supervisory or managerial positions generally are not subject to wage and hour laws.

Question 7

The Medicare tax is levied to provide medical care for the employee and the employee's spouse after they reach age 65.

Question 8

If an employee works for more than one employer during the year, the social security tax is deducted and matched by only one employer.

Question 9

An independent ____________________ is paid by the company to carry out a specific task or job but is not under the direct supervision, control, and direction of the company.

Question 10

The overtime rate is one and one-half times the regular hourly rate.

Question 11

Employers are required to pay workers' ____________________ insurance that will reimburse employees for losses suffered from job-related injuries.

Question 12

One who is hired by an employer and who is under the control and direction of the employer is called a(n) ___________________.

Question 13

Employees of firms engaged in interstate commerce must receive an overtime rate of at least 1.5 times the regular hourly rate of pay for time worked in excess of ____________________ hours per week.

Question 14

Withholding for federal income taxes places employees on a pay-as-you-go basis.

Question 15

The employee's marital status is one factor that determines the amount of federal income tax withheld by the employer.

Question 16

Employees submit Form W-4 to their employers to show the number of withholding allowances they claim for federal income tax withholding purposes.

Question 17

Publication 15, Circular E contains federal income tax withholding tables.

Question 18

When a firm records its payroll, the amount of federal income tax withheld from employees is entered as a liability.

Question 19

The maximum base for the social security tax is the same as that for the Medicare tax.

Question 20

The gross pay of an hourly employee is determined by subtracting the overtime premium from the regular earnings.

Question 21

If employees in a manufacturing business are paid wages based on the number of units produced, they are paid on the ____________________ basis.

Question 22

Federal law requires that the employer withhold _________ from the employee's pay.

A) federal income tax, social security tax, Medicare tax, and FUTA
B) federal income tax, social security tax, and Medicare tax
C) federal income tax, social security tax, Medicare tax, and state and local taxes
D) Federal and state income tax, social security tax, Medicare tax, and FUTA

Question 23

An employee whose regular hourly rate is $10 and whose overtime rate is 1.5 times the regular rate worked 44 hours in one week. In the payroll register, the employer should record an overtime premium of

A) $440.
B) $220.
C) $20.
D) $5.

Question 24

A worker who is paid an agreed amount for each week or month or year is said to be paid on a(n) ____________________ basis.

Question 25

An employee whose regular hourly rate is $20 and whose overtime rate is 1.5 times the regular rate worked 44 hours in one week. In the payroll register, the employer should record an overtime premium of

A) $880.
B) $440.
C) $120.
D) $40.

Question 26

The employer records the amount of federal income tax withheld from employees as

A) Income Tax Expense.
B) Employee Federal Income Tax Payable.
C) Social Security Tax Expense.
D) Social Security Tax Payable.

Question 27

Which of the following statements is correct?

A) A company is required to withhold various employee taxes from amounts paid independent contractors.
B) The accountant who performs the independent audit for a company is an employee of the company.
C) All employees must be paid at the minimum wage rate set by the Fair Labor Standards Act.
D) Disability benefits for the worker and the worker's dependents are provided by the Federal Insurance Contributions Act.

Question 28

An employee whose regular hourly rate is $10 and whose overtime rate is 1.5 times the regular rate worked 48 hours in one week. In the payroll register, the employer should record an overtime premium of

A) $480.
B) $240.
C) $80.
D) $40.

Question 29

Because salaried employees who hold supervisory or managerial positions generally are not subject to wage and hour laws, they are known as ____________________ employees.

Question 30

An employee whose regular hourly rate is $12 and whose overtime rate is 1.5 times the regular rate worked 45 hours in one week. The employer should record an overtime premium of ____________________ in the payroll register.

Question 31

The employer records the amount of federal income taxes withheld from employees in the Employee Income Tax ____________________ account.

Question 32

The amount of employees' ____________________ pay is recorded in the Wages Expense account.

Question 33

Which of the following statements is not correct?

A) The amount of social security tax withheld depends on an employee's gross earnings, marital status, and number of withholding allowances.
B) Federal law requires that social security, Medicare, and federal income taxes be deducted from the gross pay of most employees.
C) Medicare taxes are levied in an equal amount on both employers and employees.
D) Once an employee's year-to-date wages reach a certain amount prescribed by law, social security tax is no longer withheld.

Question 34

Salespeople who are paid a percentage of net sales are paid on the basis of ___________________.

Question 35

After payroll computations are made, the hours worked, rates, earnings, and deductions are entered into a record called a(n) ___________________.

Question 36

To compute ____________________ pay, it is necessary to subtract the total of an employee's deductions from the employee's gross pay.

Question 37

Which of the following statements is correct?

A) The FUTA tax provides benefits for employees who become unemployed.
B) The federal unemployment tax rate can be reduced by the rate charged by state for the state unemployment tax.
C) The earnings base for the federal and state unemployment taxes are the same, the first $7,000 of an employee's earnings for the year.
D) All of the above are correct.

Question 38

An employee whose regular hourly rate is $9 and whose overtime rate is 1.5 times the regular rate worked 44 hours one week. The employee's gross pay was

A) $378.
B) $396.
C) $414.
D) $594.

Question 39

Salespeople who are paid a percentage of net sales are paid on

A) commission basis.
B) salary basis.
C) hourly-rate basis.
D) piece-rate basis.

Question 40

The details that are entered on the employee's individual earnings record for each pay period are obtained from the _______________________.

Question 41

Lacy Crawford has a regular hourly rate of $21.50. In a week when she worked 40 hours and had deductions of $110 for federal income tax, $53.50 for social security tax, and $12.50 for Medicare tax, her net pay was

A) $860.
B) $684.
C) $750.
D) $794.

Question 42

Assuming a Medicare tax rate of 1.45% and monthly gross wages of $5,000, the amount recorded in Medicare Tax Payable for one quarter for the employee's payroll deduction is

A) a debit for $217.50.
B) a credit for $217.50.
C) a debit for $72.50.
D) a credit for $72.50.

Question 43

Which of the following is a factor in the determination of the amount of social security tax to withhold from an employee's pay?

A) hours worked during the pay period
B) marital status
C) withholding allowances claimed on Form W-4
D) gross wages

Question 44

Lisa Ramos has a regular hourly rate of $10.75. In a week when she worked 40 hours and had deductions of $55 for federal income tax, $26.75 for social security tax, and $6.25 for Medicare tax, her net pay was

A) $430.
B) $342.
C) $375.
D) $397.

Question 45

Sabrina Duncan had gross earnings for the pay period ending 10/15/13 of $5,785. Her total gross earnings as of 9/30/13 were $104,500. If Social Security taxes are 6.2% on a maximum earnings of $106,800 per year, Sabrina's Social Security withheld from her 10/15/13 paycheck would be:

A) $358.67
B) $142.60
C) $216.07
D) $198.88

Question 46

Which of the following is NOT typically an employee payroll withholding?

A) federal income taxes
B) state unemployment taxes
C) union dues
D) medical insurance

Question 47

It is best not to pay wages and salaries by

A) cash.
B) a check from the regular cash account.
C) the direct-deposit method.
D) a check from the payroll cash account.

Question 48

Jill Monroe earns $25 per hour. She worked 48 hours this pay period and receives time-and-a-half for any hours worked over 40 hours per week. Jill's gross earnings are:

A) $1,200
B) $1,300
C) $1,100
D) $1,920

Question 49

The column totals in a payroll register

A) are used in the journal entry to record the payroll.
B) are posted directly to the general ledger accounts.
C) are unnecessary.
D) are neither recorded in a journal entry nor posted to the general ledger accounts.

Question 50

An employee whose regular hourly rate is $18 and whose overtime rate is 1.5 times the regular rate worked 44 hours one week. The employee's gross pay was

A) $1,188.
B) $828.
C) $792.
D) $756.

Question 51

Jason McCurdy has a regular hourly rate of $10.75. During a two week period, he worked 80 hours and had deductions of $110 for federal income tax, $53.50 for social security tax, and $12.50 for Medicare tax. His net pay was

A) $860.
B) $684.
C) $750.
D) $794.

Question 52

For which of the following taxes is there no limit on the amount of annual earnings subject to the tax?

A) Federal unemployment compensation tax
B) Social Security tax
C) Federal income tax
D) State unemployment compensation tax

Question 53

Each type of deduction made from the employees' earnings is recorded in a separate

A) asset account.
B) expense account.
C) liability account.
D) revenue account.

Question 54

All details related to an employee's earnings, deductions, and net pay throughout the year would be found in

A) the payroll register.
B) the individual earnings record.
C) the general journal.
D) the Wages Expense account in the general ledger.

Question 55

When checks are issued to employees after the entry to record the payroll has been made, the accountant would

A) debit Salaries Expense, debit Wages Expense, and credit Cash.
B) debit Salaries and Wages Payable, debit Social Security Tax Payable, debit Medicare Tax Payable, debit Employee Income Tax Payable, and credit Cash.
C) debit Salaries and Wages Payable and credit Cash.
D) debit Salaries and Wages Payable and credit Salaries Expense and Wages Expense.

Question 56

Publication 15, Circular E contains withholding information

A) for social security and Medicare taxes only.
B) for federal income taxes only.
C) for social security, Medicare, and federal income tax taxes.
D) for federal and state income taxes.

Question 57

The Payroll Tax Expense account is used to record which of the following taxes?

A) Federal unemployment compensation tax
B) Federal Income Tax
C) State Income Taxes
D) Sales Taxes

Question 58

The Social Security Tax Payable account will normally have a(n)

A) debit balance.
B) credit balance.
C) debit or credit balance depending on the timing of payments.
D) zero balance.

Question 59

The amount debited to Wages Expense when a payroll is recorded is the

A) regular gross earnings.
B) earnings after taxes.
C) net earnings.
D) total gross earnings.

Question 60

Assuming a Medicare tax rate of 1.45% and monthly gross wages of $2,500, the amount recorded in Medicare Tax Payable for one quarter for the employee's payroll deduction is

A) a debit for $36.25.
B) a credit for $36.25.
C) a debit for $108.75.
D) a credit for $108.75.

Question 61

During the week ended April 26, 2013, Andy Tyler worked 40 hours. His regular hourly rate is $15. Assume that his earnings are subject to social security tax at a rate of 6.2 percent and Medicare tax at a rate of 1.45 percent. He also has deductions of $31 for federal income tax and $21 for health insurance.

A) What is his gross pay for the week?
B) What is the total of his deductions for the week?
C) What is his net pay for the week?

Question 62

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 July, his federal income taxes withheld are $180, state income taxes withheld are $37, social security is 6.2%, Medicare tax is 1.45%, State Unemployment Tax is 4%, and Federal Unemployment tax is .8%. What is the total amount of employer payroll taxes for the month of July for Hunter Furniture Company? (Assume all earnings are subject to employer payroll taxes.)

A) $311.25
B) $120.00
C) $191.25
D) $155.00

Question 63

The Royal Company has office employees and sales employees. A summary of their earnings and deductions for the week ended April 26, 2013, is shown below. On page 18 of a general journal, record the April 26 payroll and the entry to summarize the effect of the checks written to pay the payroll.

Question 64

FICA taxes are paid by:

A) employees only.
B) employer and federal government.
C) both the employee and employer.
D) neither the employee nor employer.

Question 65

The monthly salaries for December and the year-to-date earnings as of November 30 for the three employees of the Barbara's Bookstore, Inc. are listed below. Compute the amount of social security tax and Medicare tax to be withheld from each of the employee's gross pay for December. Assume a 6.2 percent social security tax rate and a base of $106,800 for the calendar year. Assume a 1.45 percent Medicare tax rate.

Question 66

During the week ended January 11, 2013, Darlene Marcussen worked 40 hours. Her regular hourly rate is $18. Assume that her earnings are subject to social security tax at a rate of 6.2 percent and Medicare tax at a rate of 1.45 percent. She also has deductions of $40 for federal income tax and $21 for health insurance.

A) What is her gross pay for the week?
B) What is the total of her deductions for the week?
C) What is her net pay for the week?

Question 67

During one week, three employees of the Siesta Inn worked the number of hours shown below. All these employees receive overtime pay at one and a half times their regular hourly rate for any hours worked beyond 40 in a week. Compute the regular earnings, overtime earnings, and gross pay for each employee.

Question 68

The monthly salaries for December and the year-to-date earnings as of November 30 for the three employees of Heather's Hair Salon are listed below. Compute the amount of social security tax and Medicare tax to be withheld from each of the employee's gross pay for December. Assume a 6.2 percent social security tax rate and a base of $106,800 for the calendar year. Assume a 1.45 percent Medicare tax rate.

Question 69

The Rollins Company has office employees and shipping employees. A summary of their earnings and deductions for the week ended June 14, 2013, is shown below. On page 6 of a general journal, record the June 14 payroll and the entry to summarize the effect of the checks written to pay the payroll.

Question 70

The monthly salaries for December and the year-to-date earnings as of November 30 for the three employees of the Lakeview Medical Center are listed below. Compute the amount of social security tax and Medicare tax to be withheld from each of the employee's gross pay for December. Assume a 6.2 percent social security tax rate and a base of $106,800 for the calendar year. Assume a 1.45 percent Medicare tax rate.

Question 71

The monthly salaries for December and the year-to-date earnings as of November 30 for the three employees of the Design Warehouse are listed below. Compute the amount of social security tax and Medicare tax to be withheld from each of the employee's gross pay for December. Assume a 6.2 percent social security tax rate and a base of $106,800 for the calendar year. Assume a 1.45 percent Medicare tax rate.

Question 72

The total amount earned by the employee is called the

A) gross pay
B) take home pay
C) net pay
D) payroll

Question 73

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 July, his federal income taxes withheld are $180, state income taxes withheld are $37, social security is 6.2%, Medicare tax is 1.45%, State Unemployment Tax is 4%, and Federal Unemployment tax is .8%. What is Rick's net pay for July?

A) $2,500.00
B) $2,283.00
C) $2,308.75
D) $2,091.75

Question 74

During the week ended May 15, 2013, Scott Fairchild worked 40 hours. His regular hourly rate is $14. Assume that his earnings are subject to social security tax at a rate of 6.2 percent and Medicare tax at a rate of 1.45 percent. He also has deductions of $31 for federal income tax and $21 for health insurance.

A) What is his gross pay for the week?
B) What is the total of his deductions for the week?
C) What is his net pay for the week?

Question 75

During the week ended February 8, 2013, Stuart Wayne worked 40 hours. His regular hourly rate is $10. Assume that his earnings are subject to social security tax at a rate of 6.2 percent and Medicare tax at a rate of 1.45 percent. He also has deductions of $31 for federal income tax and $21 for health insurance.

A) What is his gross pay for the week?
B) What is the total of his deductions for the week?
C) What is his net pay for the week?

Question 76

During one week, three employees of the Pampered Pooch Pet Salon worked the number of hours shown below. All these employees receive overtime pay at one and a half times their regular hourly rate for any hours worked beyond 40 in a week. Compute the regular earnings, overtime earnings, and gross pay for each employee.

Question 77

During one week, three employees of the Tea Leaf Cafe worked the number of hours shown below. All these employees receive overtime pay at one and a half times their regular hourly rate for any hours worked beyond 40 in a week. Compute the regular earnings, overtime earnings, and gross pay for each employee.

Question 78

The employer records the amount of federal income tax withheld as:

A) an asset.
B) a payroll tax expense.
C) a liability.
D) an expense.

Question 79

During one week, three employees of the Snowshoe Lodge worked the number of hours shown below. All these employees receive overtime pay at one and a half times their regular hourly rate for any hours worked beyond 40 in a week. Compute the regular earnings, overtime earnings, and gross pay for each employee.

Question 80

The Burns Company has two office employees and two shipping employees. A summary of their earnings and deductions for the week ended August 23, 2013, is shown below. On page 10 of a general journal, record the August 23 payroll and the entry to summarize the effect of the checks written to pay the payroll.