Deck 8: Employer Taxes, Payments, and Reports

Question 1

Which of the following amounts does Form 941 ask for?

A)Total number of employees during the quarter
B)Total wages and tips subject to federal tax withholding
C)Total federal income tax withheld
D)All of these
E)None of these

Answer 1

D

Question 2

John Smith has cumulative yearly earnings of $24,700, counting his current pay period salary amount of $3,500. Assume the FICA tax rate is 6.2 percent for Social Security, with a limit of $113,700, and 1.45 percent for Medicare, applied to all earnings. The FUTA tax is 0.6 percent, with a limit of $7,000, and the SUTA tax is 5.4 percent, with a limit of $7,000. The employer's payroll tax expense entry will include a credit to

A)FICA Tax Payable for $217.00.
B)FICA Tax Payable for $267.75.
C)Federal Unemployment Tax Payable for $28.00.
D)State Unemployment Tax Payable for $189.00.
E)Federal Unemployment Tax Payable for $280.00.

Answer 2

B

Question 3

Nguyen has cumulative earnings of $112,400and earns $6,800 during the current pay period. If the FICA rate is 6.2 percent for Social Security, with a limit of $113,700, and 1.45 percent for Medicare, applied to all earnings, the total FICA tax to be withheld for this pay period is

A)$520.20.
B)$179.20.
C)$18.85.
D)$80.60.
E)$98.60.

Answer 3

B

Question 4

The entry to record the employer's payroll taxes includes a

A)credit to Employees' Federal Income Tax Payable.
B)debit to FICA Tax Expense.
C)debit to Salaries Payable.
D)credit to FICA Tax Payable.
E)debit to Federal Unemployment Tax Payable.

Question 5

If the limit for Social Security (6.2%) is $113,700 and Medicare (1.45%) is applied to all earnings and Sally Reena's gross earnings this pay period are $7,300, with cumulative earnings prior to this pay period of $112,460, the amount of tax is

A)Social Security, $452.60; Medicare, $105.85.
B)Social Security, $0; Medicare, $0.
C)Social Security, $76.88; Medicare, $105.85.
D)Social Security, $0; Medicare, $17.98.
E)Social Security, $76.88; Medicare, $17.98.

Question 6

An employer's deposit of federal taxes includes

A)the employees' federal income taxes withheld.
B)the employees' share of FICA taxes withheld (Social Security and Medicare).
C)the employer's share of FICA taxes (Social Security and Medicare).
D)none of these.
E)all of these.

Question 7

Generally, employers are required to withhold from employees for

A)Medicare taxes.
B)excise taxes.
C)federal unemployment taxes.
D)sales taxes.
E)property taxes.

Question 8

If the limit for Social Security is $113,700 and Medicare is applied to all earnings and George Rory's gross earnings this pay period are $7,300, with cumulative earnings prior to this pay period of $112,460, the taxable earnings for FICA taxes are

A)Social Security, $0; Medicare, $1,240.
B)Social Security, $1,240; Medicare, $0.
C)Social Security, $1,240; Medicare, $6,060.
D)Social Security, $1,240; Medicare, $7,300.
E)Social Security, $0; Medicare, $0.

Question 9

Fernando Black has $6,800 cumulative earnings during the calendar year and earned $950 during the current pay period. If the state unemployment tax is 5.4 percent of the first $7,000, the federal unemployment tax is 0.6 percent of the first $7,000, the FICA Social Security tax is 6.2 percent of the first $113,700, and FICA Medicare tax is 1.45 percent on all earnings, the amounts placed in the Taxable Earnings columns of the payroll register are

A)state unemployment, $0; federal unemployment, $0; Social Security, $850; Medicare, $850.
B)state unemployment, $950; federal unemployment, $950; Social Security, $950; Medicare, $950.
C)state unemployment, $200; federal unemployment, $200; Social Security, $950; Medicare, $950.
D)state unemployment, $200; federal unemployment, $200; Social Security, $200; Medicare, $200.
E)state unemployment, $10.80; federal unemployment, $1.60; Social Security, $58.90; Medicare, $13.78.

Question 10

Richard Edwards has cumulative yearly earnings of $112,800, counting his current pay period salary amount of $7,500. Assume the FICA tax rate is 6.2 percent for Social Security, with a limit of $113,700, and 1.45 percent for Medicare, applied to all earnings. The FUTA tax is 0.6 percent, with a limit of $7,000, and the SUTA tax is 5.4 percent, with a limit of $7,000. The employer's payroll tax expense entry will include a credit to

A)FICA Tax Payable for $164.55.
B)FICA Tax Payable for $573.75.
C)Federal Unemployment Tax Payable for $60.00.
D)State Unemployment Tax Payable for $405.00.
E)Federal Unemployment Tax Payable for $7,209.00.

Question 11

Payroll tax expense represents the amount of taxes contributed by the

A)employee.
B)employer.
C)employee and employer combined.
D)employer plus gross pay.
E)employer plus the employee's net pay.

Question 12

Which of the following payroll taxes do employers pay on employees?

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

Question 13

Lee Loren has cumulative earnings of $6,750 and earned $745 during the current pay period. If the FUTA tax rate is 0.6 percent, with a ceiling of $7,000, the employer payroll tax expense for FUTA is

A)$54.00.
B)$5.96.
C)$0.
D)$1.50.
E)$15.00.

Question 14

Robert Martin's gross earnings for the week ended December 20 amount to $2,200. His cumulative gross earnings for the year up through the last pay period amount to $91,500. If the FICA tax rate is 6.2 percent for Social Security, with a limit of $113,700, and 1.45 percent for Medicare, applied to all earnings, the total FICA tax to be withheld is

A)$168.30.
B)$136.40.
C)$31.90.
D)$290.00.
E)$124.00.

Question 15

In the journal entry to record the payment of the taxes shown on the quarterly 941 tax form, the debit(s) would be to

A)Cash only.
B)FICA Tax Payable (employee and employer) and Federal Income Tax Payable.
C)FICA Tax Payable (employee only) and Federal Income Tax Payable.
D)Federal Income Tax Payable only.
E)FICA Tax Payable (employer only) and Federal Income Tax Payable.

Question 16

The entry to record the payroll tax expense includes all of the following except

A)Federal Unemployment Tax Payable.
B)FICA Tax Payable.
C)Employees' Federal Income Tax Payable.
D)State Unemployment Tax Payable.
E)None of these are correct.

Question 17

Which of the following items is considered to be a cost of having an employee?

A)Federal unemployment
B)FICA Medicare
C)FICA Social Security
D)All of these
E)None of these

Question 18

Which of the following payroll taxes has a maximum of earnings subject to the tax?

A)State unemployment tax
B)FICA Social Security
C)FICA Medicare
D)All of these
E)Both state unemployment tax and FICA Social Security

Question 19

Sven Trent has cumulative earnings of $6,580 and earned $840 during the current payroll period. If the SUTA tax is 5.4 percent, with a ceiling of $7,000, the employer liability for state unemployment taxes is

A)$45.36.
B)$22.68.
C)$355.32.
D)$378.00.
E)$6.72.

Question 20

Form 941 requires reporting of which of the following taxes?

A)FICA and federal income taxes
B)FICA and FUTA
C)FUTA and SUTA
D)FICA, FUTA, and SUTA
E)State income taxes

Question 21

The Employer's Annual Federal Unemployment Tax Return is called

A)Form 941.
B)Form W-4.
C)Form W-2.
D)Form W-3.
E)Form 940.

Question 22

Employer Payroll Tax liability occurs when:

A)The employee comes to work
B)The payroll journal entry is completed
C)When the employee is actually paid
D)When the payroll liability is paid

Question 23

Which of the following statements is false:

A)Employers are required to pay FICA taxes matching the amount withheld from their employees.
B)Employers are responsible for paying FUTA Taxes.
C)Employers are responsible for withholding and remitting Federal Income Taxes.
D)Employers must file form 941 quarterly.

Question 24

If a tax payment is made, what is the effect on the FICA Taxes Payable Account?

A)Increase with a, CR
B)Increase with a, DR
C)Decrease with a DR
D)Decrease with a, CR

Question 25

Payroll Tax Expense includes all of the following EXCEPT:

A)FICA Taxes Payable
B)SUTA
C)FUTA
D)Federal Income Tax Withheld

Question 26

Which of the following statement is true?

A)Payroll Tax Expense increases on the credit side of the account
B)FICA Medicare Payable increases with a credit
C)Federal Income Tax Withholding Payable decreases with a credit
D)Employee Payroll Taxes withheld are recorded in Payroll Tax Expense

Question 27

The 940 Report is prepared and remitted:

A)Monthly
B)Quarterly
C)Annually
D)As soon as wages reach $7,000

Question 28

The report filed by employers showing total wages paid to employees and total wages subject to Federal Unemployment Taxes is:

A)941
B)940
C)W-2
D)8920

Question 29

The number assigned to employers by the IRS for use in submitting and reporting tax payments is:

A)EIN
B)TIPN
C)iPay
D)FUTA

Question 30

The Sales Wage Expense would be used to record:

A)Net pay for sales personnel
B)A holding account for wages due and payable
C)Gross Pay for Sales Personnel
D)Deductions for Sales Personnel

Question 31

Mary Jane's cumulative year-to-date earnings are $7,200. On June 30th, Mary Jane earned $600. What is the FUTA tax amount that Mary Jane's employer must record and pay on her most recent earnings?

A)$0
B)$4.80
C)$52.80
D)$56.00

Question 32

If a company is considered to have high employee turnover, what effect does the turnover have on the Payroll Tax expenses for the business?

A)Increases payroll tax expenses
B)Decreases payroll tax expenses
C)Would not have any effect
D)May increase or decrease payroll tax expenses depending on the time of the year.

Question 33

SUTA taxes are normally paid:

A)Annually
B)Quarterly
C)Monthly
D)Weekly

Question 34

Extra hours that are added to wage information in order to increase pay is an example of:

A)Ghost Employee Fraud
B)False Wage Claim Fraud
C)False Expense Reimbursement Fraud
D)None of the above

Question 35

A debit to the Payroll Tax Expense account means:

A)The employer's payroll taxes have increased
B)The employer's payroll taxes have decreased
C)Both the employer's and the employee's payroll taxes have increased
D)The employer's and employee's payroll taxes have not changed

Question 36

The quarterly report that shows the tax liability for federal employee withholding, FICA Social Security and Medicare (employee) and FICA Social Security and Medicare (employer).

A)941
B)940
C)W-3
D)8890

Question 37

This form is also called the Transmittal of Wage and Tax Statement.

A)W-2
B)941
C)940
D)W-3

Question 38

When someone is recorded in the payroll system that does not work for the business, this is an example of:

A)Fictional Employee Fraud
B)Ghost Employee Fraud
C)False Employee Fraud
D)False Expense Fraud

Question 39

The employer's counterpart to a Social Security number is the:

A)Employer Identification Number
B)Employer Information Number
C)Employer Item Number
D)Employer Interest Number

Question 40

Wages Payable is used to record:

A)Employee Gross Pay
B)Employee Net Pay
C)Cumulative Employee Earnings
D)Deductions and Taxes

Question 41

The 941 tax return form is reported ___________.

A)Semi-Weekly
B)Monthly
C)Quarterly
D)Annually

Question 42

Which of the following statements is true?

A)SUTA and FUTA Tax Rates are always the same
B)Payroll Tax Expense involves Federal Income Tax Withholding.
C)The FUTA wage taxable limit is $7,000
D)Withholding Federal Income Taxes is optional for the employer

Question 43

FUTA tax liability is generally deposited _________ and reported ___________.

A)Weekly, Monthly
B)Monthly, Quarterly
C)Quarterly, Annually
D)Deposits and Report Dates Vary

Question 44

The W-2 form contains all of the following EXCEPT:

A)Wages
B)Employee Social Security Number
C)EIN
D)Number of Allowances

Question 45

Which of the following statements is NOT true about Workers' Compensation Insurance.

A)Employers generally pay premiums in advance
B)Most states require employers to provide coverage
C)Employers normally pass along the cost of coverage to employees
D)Premium rates vary based on risk and claims

Question 46

What is NOT an example of internal control procedures that help prevent payroll fraud?

A)Require mandatory vacations
B)Outsource Payroll Administration
C)Conduct periodic unannounced audits
D)Make sure only one person handles payroll functions

Question 47

If the limit on unemployment taxes is $7,000, and Bart's accumulated earnings prior to his current earnings of $960 are $6,750, the amount of his check that is taxable for unemployment is

A)$7,000.00.
B)$250.00.
C)$840.00.
D)$6,750.00.
E)$960.00.

Question 48

Employers are required to pay FICA taxes higher in amount to the FICA taxes withheld than their employees.

Question 49

FUTA is an abbreviation for:

A)Future Unemployment Tax Act
B)Federal Unemployment Tax Act
C)Funding Unemployment Tax Act
D)None of the above

Question 50

There is no wage ceiling limit for which of the following:

A)FICA Medicare
B)SUTA
C)FUTA
D)FICA Social Security

Question 51

Sally Marks has cumulative earnings of $112,500 and earns $5,500 during the current pay period. If the FICA rate is 6.2% for Social Security, with a limit of $113,700, and 1.45% for Medicare, applied to all earnings, the total FICA tax to be withheld for this pay period is:

A)$154.15
B)$420.75
C)$74.40
D)$79.75

Question 52

Most states require employers to provide which of the following for the benefit of their employees:

A)Life insurance
B)Disability insurance
C)Workers' Compensation Insurance
D)Payroll Fraud Insurance

Question 53

The employer becomes liable for payroll tax expense when the employees are actually paid.

Question 54

The FUTA tax is imposed on employees on the first $7,000 of annual earnings per employee.

Question 55

Sharon Wilson has cumulative earnings of $106,900 and earns $5,500 during the current pay period. If the FICA rate is 6.2% for Social Security, with a limit of $113,700, and 1.45% for Medicare, applied to all earnings, the total FICA tax to be withheld for this pay period is:

A)$341.00
B)$79.75
C)$420.75
D)$520.20

Question 56

The Payroll Tax Expense account is used to record the employer's state unemployment tax, federal unemployment tax, and federal income tax.

Question 57

When improper claims are made for business expense reimbursement, this is an example of:

A)False Expense Reimbursement Fraud
B)Missing Claim Form Fraud
C)False Wage Claim Fraud
D)False Claims Fraud

Question 58

Rounding differences with the employee and employer amounts of FICA taxes are handled on the 941 report by:

A)Any differences are paid in or refunded as appropriate
B)Line 7 accommodates fraction differences, which accommodates rounding
C)When differences occur, the numbers are adjusted before the report to balance
D)None of the above

Question 59

Tom James has cumulative earnings of $6,825 and earned $750 during the current payroll period. The FUTA tax is 0.6%, with a ceiling of $7,000. What is the employers federal unemployment tax liability for the current payroll:

A)$10.50
B)$175.00
C)$1.05
D)$105.00

Question 60

The W-3 shows all of the following EXCEPT:

A)Employer Name
B)Total Company Wages
C)Employee Social Security Number
D)EIN

Question 61

Form 941 must be submitted quarterly.

Question 62

All companies have to pay the federal unemployment insurance quarterly.

Question 63

Employees, as well as employers, are required to make payments toward federal unemployment insurance.

Question 64

Required employee payroll deductions include income taxes, FICA taxes, union dues, and charitable contributions.

Question 65

The source of information to complete the W-2 form is the employee's individual earnings record.

Question 66

Most employers are required to withhold federal unemployment taxes from employees' earnings.

Question 67

Payments for state taxes are submitted to the state agency involved.

Question 68

The FUTA tax must be paid by the employer annually on December 31.

Question 69

The state unemployment tax is usually paid quarterly.

Question 70

The rate of the state unemployment tax varies considerably among states.

Question 71

The rate for the federal unemployment tax is higher than the rate for the state unemployment tax.

Question 72

Once the employee's income reaches the limit placed on Social Security tax, the amount deducted is reduced based on the number of exemptions claimed.

Question 73

There is a ceiling on each employee's annual earnings that are subject to federal income taxes.

Question 74

The federal unemployment tax is paid only by the employee.

Question 75

Salaries Expense is debited to record the employer's FICA contributions and the FUTA and SUTA taxes.

Question 76

Form 941 is submitted annually.

Question 77

The employer identification number is the same as the owner's Social Security number.

Question 78

FUTA is an abbreviation for Social Security taxes.

Question 79

Companies furnish their employees with W-2 forms quarterly.

Question 80

The FICA tax percentage is composed of both Social Security and Medicare taxes.