Question 1

Tips received by employees are not included as disposable earnings subject to garnishment

Accepted Answer

According to federal law, tips received by employees are considered to be the property of the employee, and are therefore not subject to garnishment as disposable earnings.

Question 2

Every state allows employers to make e-payment options as a condition of employment.

Accepted Answer

While many states have laws allowing employers to offer e-payment options, not every state allows them to make it a condition of employment. It is important to check the specific laws in your state regarding e-payment options.

Question 3

Each payday,the total of net pays that the employer incurs is the wage expense that must be debited.

Accepted Answer

The total of net pays is not the wage expense debited by the employer; rather, the gross wages (total earnings before any deductions) represent the wage expense that is debited. Net pay is the amount after deductions like taxes and benefits, which is paid to employees.

Question 4

Once the journal entry for the payroll is complete,the information is posted to the appropriate general ledger accounts.

Accepted Answer

After the journal entry for payroll is complete, the information is posted to the relevant general ledger accounts to update the company's financial records. This allows for accurate tracking of expenses and ensures that the financial statements reflect the correct amounts.

Question 5

The total of the net amount paid to employees each payday is credited to either the cash account or the salaries payable account.

Accepted Answer

The total amount paid to employees is either paid in cash or is recorded as a liability (salaries payable) to be paid out later. Therefore, the net amount is either credited to the cash account or the salaries payable account.

Question 6

If wages are paid weekly,postings to the employee's earnings record would be done once a month.

Accepted Answer

If wages are paid weekly, postings to the employee's earnings record would typically be done on a weekly basis, not once a month.

Question 7

An employer will use the payroll register to keep track of an employee's accumulated wages.

Accepted Answer

The answer of An employer will use the payroll register...

Question 8

An employee's marital status and number of withholding allowances never appear on the payroll register.

Accepted Answer

An employee's marital status and number of withholding allowances often appear on the payroll register as they are relevant for determining the amount of federal income tax to withhold from the employee's paycheck.

Question 9

Service charges that are passed on to the employee by the employer are not part of the disposable earnings subject to garnishment.

Accepted Answer

Service charges passed on to the employee by the employer are considered part of the employee's earnings and thus are included in the calculation of disposable earnings subject to garnishment. Disposable earnings are the employee's earnings after legally required deductions, and since service charges passed on to employees increase their earnings, they are factored into garnishment calculations.

Question 10

A debit to the employees FIT payable account removes the liability for the amount of federal income taxes withheld from employees' wages.

Accepted Answer

A debit to the employees FIT payable account means that the amount of federal income taxes withheld from employees' wages has been paid and no longer remains a liability.

Question 11

Deductions from gross pay in the payroll register are reflected on the credit side of the journal entry to record the payroll.

Accepted Answer

Deductions from gross pay are a reduction in the amount of money paid to the employee and therefore reduce the expense recorded in the payroll entry. This reduction in expense is reflected on the credit side of the journal entry.

Question 12

The wage and salaries expense account is an operating expense account debited for total net pay each payroll period.

Accepted Answer

The wage and salaries expense account is debited for the gross pay (total earnings before any deductions) each payroll period, not the net pay. Net pay is the amount employees receive after deductions.

Question 13

In order to prepare Forms W-2,an employer would utilize the employee's earnings record.

Accepted Answer

The employee's earnings record is used to prepare Forms W-2, which report an employee's wages and tax information for the year.

Question 14

When withheld union dues are turned over to the union by the employer,a journal entry is made debiting the liability account and crediting the cash account.

Accepted Answer

This is because when the employer withholds union dues from employee wages, they are essentially holding onto the money on behalf of the union. Once they turn over the funds to the union, the employer would debit the liability account (representing the amount owed to the union) and credit the cash account (representing the cash paid out to the union).

Question 15

FIT Payable is a liability account used to record employees' withheld federal income tax and also the employer's match of that tax.

Accepted Answer

FIT Payable is a liability account used to record employees' withheld federal income tax, but it does not include the employer's match of that tax. The employer's match is related to Social Security and Medicare taxes, not federal income tax.

Question 16

Companies usually provide a separate column in the payroll register to record the employer's payroll taxes.

Accepted Answer

The answer of Companies usually provide a separate column in...

Question 17

Under the provisions of the Consumer Credit Protection Act,an employer can discharge an employee simply because the employee's wage is subject to garnishment for a single indebtedness.

Accepted Answer

Under the Consumer Credit Protection Act, it is illegal for employers to terminate employees due to wage garnishment for a single indebtedness. However, an employer may discharge someone if their wages are garnished for two or more debts.

Question 18

Amounts withheld from employees' wages for health insurance are credited to a liability account.

Accepted Answer

Amounts withheld from employees' wages for health insurance are considered a liability until the employer remits the funds to the insurance provider. Therefore, they are credited to a liability account.

Question 19

Tax withholdings from employees' pays reduce the amount of the debit to Salary Expense in the payroll entry.

Accepted Answer

Tax withholdings from employees' pays do not reduce the amount of the debit to Salary Expense; instead, they create a liability for the amount withheld, which the employer must remit to the appropriate tax authority. The total gross salary is debited to Salary Expense.

Question 20

Under the Consumer Credit Protection Act,disposable earnings are the earnings remaining after any deductions for health insurance.

Accepted Answer

Disposable earnings are the earnings remaining after deductions required by law (such as taxes) and any other deductions authorized by the employee (such as retirement contributions or charitable donations). Deductions for health insurance are not the only factor in calculating disposable earnings.

Quiz 6: Analyzing and Journalizing Payroll