Question 1

Julie is employed as a salesperson at ABC Motors. She receives a salary of $1,200 a month, plus 15% commissions on the profit from her sales during the month. If Julie's sales profit for August is $25,000 what is her total gross pay?

Accepted Answer

First, calculate Julie's commission for the month:

15% of $25,000 = $3,750

Then, add her commission to her monthly salary:

$1,200 + $3,750 = $4,950

Therefore, Julie's total gross pay for August is $4,950, which is option D.

Question 2

The Fair Labor Standards Act of 1938 provides for

Accepted Answer

The Fair Labor Standards Act of 1938 provides for all of the above options, including minimum standards for wages and overtime, provisions for child labor and equal pay for equal work, and exemptions for specified employees. This act is a federal law that establishes minimum wage, overtime pay, recordkeeping, and child labor standards affecting both full-time and part-time workers in the private and public sectors.

Question 3

Employees may be paid hourly or salary based on the following:

Accepted Answer

Both the type of work performed and the period of time covered are factors that typically determine whether an employee is paid hourly or salary. The employer's discretion may also play a role, but it is not the only deciding factor. Therefore, the best choice is D.

Question 4

The Social Security Act of 1935 was originally enacted to provide

Accepted Answer

The Social Security Act of 1935 was primarily enacted to provide benefits for retired workers. While the Act has since been amended to include benefits for spouses, minor children, and disability insurance, the original purpose was to provide a safety net for elderly Americans who had reached retirement age without access to a pension or other means of support.

Question 5

A law that regulates overtime earnings is called:

Accepted Answer

The law that regulates overtime earnings is the Fair Labor Standards Act (FLSA). It sets the standard workweek at 40 hours and requires overtime payment to employees who work more than 40 hours in a week. The Federal Unemployment Tax Act (FUTA) is a tax that employers must pay to provide unemployment benefits to employees who have lost their jobs. The Tax Payment Act and the Federal Insurance Contribution Act (FICA) also relate to taxes, but do not regulate overtime earnings.

Question 6

The record maintained for each employee, listing the current data on that employee's earnings for the period, deductions, and accumulated earnings, is the

Accepted Answer

The employee's individual earnings record is a detailed document that tracks an employee's earnings, deductions, and accumulated earnings over a period, making it the correct choice.

Question 7

What item is NOT used to calculate the federal income tax to be withheld by employers

Accepted Answer

W-2 is a form that reports an employee's annual earnings and taxes withheld, but it is not used to calculate the federal income tax to be withheld by employers. The calculation is instead based on the information provided by the employee on their W-4 and the IRS's Publication 15 (Circular E). Total earnings are also a factor in the calculation.

Question 8

John Smith is paid $15 per hour and he worked 35 hours during the week. What is John's gross pay?

Accepted Answer

John's gross pay is calculated by multiplying his hourly rate by the number of hours he worked. 
Gross pay = Hourly rate x Number of hours worked 
Gross pay = $15 x 35 = $525 
Therefore, the correct answer is B) $525.

Question 9

What are the two parts of FICA taxes

Accepted Answer

The two parts of FICA taxes are Social Security and Medicare. Social Security provides retirement, disability, and survivor benefits to qualified individuals, while Medicare provides health insurance to those who are 65 or older, those with certain disabilities, and those with end-stage renal disease.

Question 10

The 941 employer's tax payment to the IRS consists of

Accepted Answer

The 941 employer's tax payment includes employee's FICA withheld, employer's matching FICA, and employee's federal income tax withheld.

Question 11

Bill Jones was hired as an apple picker. Bill's pay will be based on a piece-rate system at the rate of $4.50 per bag of apples picked. If Bill picks 20 bags a day, and works 4 days a week, what are his total earnings.

Accepted Answer

Bill picks 20 bags a day for 4 days a week, which means he picks a total of 80 bags. Each bag is worth $4.50, so his total earnings would be 80 x $4.50 = $360. Therefore, the best choice is C.

Question 12

Sally worked 45 hours during the week at an hourly rate of $10 per hour. Assume that Sally's overtime rate is paid at time and a half over 40 hours. What is Sally's gross pay for the week?

Accepted Answer

Sally worked 40 regular hours at $10/hour, earning $400. She worked 5 overtime hours at $15/hour (time and a half), earning $75. Total gross pay is $400 + $75 = $475.

Question 13

Stacey works 38 hours in a week. How many hours of overtime will Stacey be paid?

Accepted Answer

Overtime is typically paid for hours worked beyond a standard 40-hour workweek. Since Stacey works 38 hours, which is less than 40 hours, she will not be paid for any overtime.

Question 14

The employee's individual earnings record includes

Accepted Answer

The employee's individual earnings record typically includes information related to the employee, such as their name, address, date of hire, job title, and pay rate. It may also include information specific to the employee's earnings, such as the number of hours worked, the amount of gross pay earned, and any deductions that were taken out of their paycheck. However, it would not include information related to other employees or the company as a whole (such as gross payroll or federal unemployment taxes), which would be recorded elsewhere.

Question 15

Flexible spending plans and 401(k) deductions are normally considered

Accepted Answer

Flexible spending plans and 401(k) deductions are considered pre-tax deductions, which means the money is taken out of an employee's paycheck before taxes are calculated, lowering their taxable income and potentially resulting in a lower tax liability.

Question 16

The following payroll taxes that are strictly the employer's responsibility

Accepted Answer

SUTA (State Unemployment Tax Act) and FUTA (Federal Unemployment Tax Act) are both employer-only payroll taxes that are not withheld from employees' paychecks. FICA SS Employee Withheld and Federal Tax Withheld are both taxes that are withheld from employees' paychecks before being paid to the government, and are not solely the employer's responsibility.

Question 17

The source of information for the employee's individual earnings record is

Accepted Answer

The payroll register contains all of the information pertaining to an employee's individual earnings record, including hours worked, gross pay, taxes withheld, and net pay. Form W-2 is an annual statement of earnings and taxes that is provided to employees after the end of the calendar year. Form W-4 is a form that employees use to indicate their tax withholding preferences. Employees' time cards document the hours worked by employees, but do not necessarily include information about earnings. The general ledger is the primary accounting record for a company, but does not contain information specific to individual employees.

Question 18

Which of the following payroll taxes is the employee's responsibility

Accepted Answer

Federal Income Tax is the responsibility of both the employer and employee, while FICA SS & Medicare and FUTA are employer responsibilities. SUTA may or may not be the responsibility of the employee, depending on the state.

Question 19

Mary Reeves has gross wages of $1,500 for the week ending October 24. Mary's total accumulated gross wages earned this year, prior to this payroll, is $75,000. If the FICA rates are: Social Security: 6.2% on a limit of $113,700 and Medicare 1.45%. What are Mary's FICA-Social Security and FICA-Medicare taxes for the week?

Accepted Answer

To calculate FICA-Social Security taxes for the week, we first need to determine whether Mary has reached the wage base limit of $113,700. Since Mary's accumulated gross wages for the year prior to this payroll is $75,000, she has not reached the wage base limit. Therefore, her FICA-Social Security tax for the week is:
$1,500 x 6.2% = $93.00
To calculate FICA-Medicare taxes for the week, we simply multiply Mary's gross wages by the Medicare tax rate:
$1,500 x 1.45% = $21.75 
Therefore, Mary's FICA-Social Security tax for the week is $93.00, and her FICA-Medicare tax for the week is $21.75. The correct answer is C.

Question 20

The Federal Insurance Contributions Act provides for which of the following

Accepted Answer

The Federal Insurance Contributions Act (FICA) funds Social Security and Medicare, which provide retirement benefits starting at age 62.

Quiz 7: Employee Earnings and Deductions