Question 1

The Wage and Tax Statement is:

Accepted Answer

The Wage and Tax Statement is Form W-2, which reports an employee's annual wages and the amount of taxes withheld from their paycheck by their employer.

Question 2

FUTA taxes are:

Accepted Answer

FUTA taxes are unemployment taxes paid by employers to fund unemployment compensation programs for their employees who become unemployed through no fault of their own.

Question 3

An employee earned $47,000 during the year working for an employer.The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%.The employee's annual FICA taxes amount is:

Accepted Answer

FICA Taxes = Wages + (FICA tax rate + Medicare tax rate)
FICA Taxes = $47,000 + (0.062 + 0.0145); FICA Taxes = $3,595.50

Question 4

A merit rating:

Accepted Answer

A merit rating is a rating system used by some states to adjust an employer's state unemployment tax rate based on their history of layoffs or unemployment claims. The rating is assigned by the state and reflects the company's stability or instability in employing workers, which in turn affects the amount of state unemployment taxes the employer must pay. Therefore, all the choices are correct.

Question 5

Phil Phoenix is paid monthly.For the month of January of the current year,he earned a total of $8,288.The FICA tax for social security is 6.2% and the FICA tax rate for Medicare is 1.45%.The FUTA tax rate is 0.8%,and the SUTA tax rate is 5.4%.Both unemployment taxes are applied to the first $7,000 of an employee's pay.The amount of federal income tax withheld from his earnings was $1,375.17.His net pay for the month is:

Accepted Answer

Net Pay = Gross Pay - Federal Income Tax - FICA-SS Tax - FICA-Medicare Tax
Net Pay = $8,288.00 - $1,375.17*- $513.86** - $120.18; Net Pay = $6,278.79
* FICA-SS Tax $8,288.00 * 0.062 = $513.86
**FICA-Medicare Tax $8,288.00 * 0.0145 = $120.18

Question 6

An estimated liability:

Accepted Answer

An estimated liability is a known obligation of an uncertain amount that can be reasonably estimated. This means that the amount of the liability is not known for certain, but the company has enough information to make a reasonable estimate. The estimated liability is recorded on the company's financial statements.

Question 7

An employee earned $4,300 working for an employer.The current rate for FICA Social Security is 6.2% and the rate for FICA Medicare 1.45%.The employer's total FICA payroll tax for this employee is:

Accepted Answer

Employer's Total FICA Tax = $4,300 * (0.062 + 0.0145) = $328.95

Question 8

The annual Federal Unemployment Tax Return is:

Accepted Answer

The annual Federal Unemployment Tax Return is Form 940. This form is used to report and pay the Federal Unemployment Tax Act (FUTA) tax, which is a federal tax that employers pay to provide unemployment benefits to workers who have lost their jobs. Form 940 is due on January 31 of each year for the previous calendar year.

Question 9

Employer payroll taxes:

Accepted Answer

Employer payroll taxes are additional expenses that employers have to pay in addition to the wages and salaries earned by employees. These taxes are used to fund social programs such as Medicare and Social Security. It is not paid by the employee, but by the employer.

Question 10

Phil Phoenix is paid on a monthly basis.For the month of January of the current year,he earned a total of $8,288.FICA tax for Social Security is 6.2% and the FICA tax for Medicare is 1.45%.The FUTA tax rate is 0.8%,and the SUTA tax rate is 5.4%.Both unemployment taxes are applied to the first $7,000 of an employee's pay.The amount of Federal Income Tax withheld from his earnings was $1,375.17.What is the amount of the employer's payroll taxes expenses for this employee?

Accepted Answer

Payroll Taxes = FICA-SS Tax + FICA-Medicare Tax + FUTA Tax + SUTA Tax Payroll Taxes = $513.86¹+ $120.18²+ $56.00³ + $378.00⁴ ¹FICA-Social Security $8,288 * 0.062 = $513.68 ²FICA-Medicare $8,288 * 0.0145 = $120.18 ³FUTA $7,000 * 0.008 = $ 56.00 ⁴SUTA $7,000 * 0.054 = $378.00

Question 11

Phil Phoenix is paid monthly.For the month of January of the current year,he earned a total of $8,288.The FICA tax rate for social security is 6.2% and the FICA tax rate for Medicare is 1.45%.The FUTA tax rate is 0.8%,and the SUTA tax rate is 5.4%.Both unemployment taxes are applied to the first $7,000 of an employee's pay.The amount of Federal Income Tax withheld from his earnings was $1,375.17.What is the total amount of taxes withheld from the Phoenix's earnings?

Accepted Answer

Total Taxes = Federal Income Tax + FICA-SS Tax + FICA-Medicare Tax
Total Taxes = $1,375.17*- $513.86** - $120.18; Total Taxes = $2,009.21
* FICA-SS Tax $8,288.00 * 0.062 = $513.86
**FICA-Medicare Tax $8,288.00 * 0.0145 = $120.18

Question 12

A bank that is authorized to accept deposits of amounts payable to the federal government is a:

Accepted Answer

According to the Federal Deposit Insurance Corporation (FDIC), a Federal Depository Bank is authorized to accept deposits of funds payable to the federal government. The other options listed do not necessarily have this authorization.

Question 13

An employer's federal unemployment taxes (FUTA)are reported:

Accepted Answer

FUTA taxes are reported annually, typically using IRS Form 940.

Question 14

The Federal Insurance Contributions Act (FICA)requires that each employer file a:

Accepted Answer

The Federal Insurance Contributions Act (FICA) requires employers to withhold Social Security and Medicare taxes from their employees' wages and pay the employer's share of these taxes as well. Employers are required to file Form 941, Employer's Quarterly Federal Tax Return, to report the amount of FICA taxes withheld from employee wages, as well as the employer's share of these taxes.

Question 15

The current FUTA tax rate is 0.8%,and the SUTA tax rate is 5.4%.Both taxes are applied to the first $7,000 of an employee's pay.Assume that an employee earned $8,900.What is the amount of total unemployment taxes the employer must pay on this employee's wages?

Accepted Answer

Unemployment Taxes = $7,000 * (0.008 + 0.054); Unemployment Taxes = $434.00

Question 16

An employee earned $62,500 during the year working for an employer.The FICA tax rate for Social Security is 6.2% and the FICA tax rate for Medicare is 1.45%.The current FUTA tax rate is 0.8%,and the SUTA tax rate is 5.4%.Both unemployment taxes are applied to the first $7,000 of an employee's pay.What is the amount of total unemployment taxes the employee must pay?

Accepted Answer

The question asks how much unemployment tax the employee must pay. The employer is
the one responsible for unemployment taxes; not the employee.

Question 17

The unemployment insurance program:

Accepted Answer

The unemployment insurance program is a joint federal and state program that is administered by each state. The program provides unemployment benefits to qualified workers and adjusts rates paid by employers based on their merit rating. Therefore, all of the choices are correct.

Question 18

Recording employee payroll deductions may involve:

Accepted Answer

Recording employee payroll deductions involves liabilities to employees, governments, insurance companies, and labor unions, as these deductions are withheld from employees' paychecks and owed to these entities.

Question 19

Employers:

Accepted Answer

All of the choices are correct. Employers are responsible for paying FICA taxes equal to the amount withheld from employees, withholding employees' FICA taxes, and paying unemployment taxes to both the state and federal governments.

Question 20

The amount of federal income taxes withheld from an employee's paycheck is determined by:

Accepted Answer

The amount of federal income taxes withheld from an employee's paycheck is determined by the amount of the employee's current earnings for the pay period and the number of withholding allowances the employee claims. This information is used to calculate the amount of income tax that should be withheld from the paycheck based on the employee's filing status, tax bracket, and other factors. The other choices listed are not relevant to determining federal income tax withholding.

Quiz 11: Current Liabilities and Payroll Accounting