Deck 15: Payroll Accounting

Question 1

An employee's time card is used to record the number of exemptions claimed by the employee for income tax withholding purposes.

Answer 1

False

Question 2

Which of the following is not performed by the payroll department?

A)Preparation of payroll checks
B)Maintaining payroll records
C)Signing of payroll checks
D)Preparation of payroll tax returns

Answer 2

Signing of payroll checks

Question 3

Which one of the following payroll taxes does not result in a payroll tax expense for the employer?

A)FICA tax
B)Federal income tax
C)Federal unemployment tax
D)State unemployment tax

Answer 3

Federal income tax

Question 4

An employee's payroll check is distributed by the

A)personnel department.
B)payroll department.
C)cashier.
D)treasurer's department.

Question 5

Lucie Ball's regular rate of pay is $15 per hour with one and one-half times her regular rate for any hours which exceed 40 hours per week.She worked 48 hours last week.Therefore, her gross wages were

A)$720.
B)$600.
C)$780.
D)$1,080.

Question 6

Assuming a FICA tax rate of 7.65% on the first $132,900 in wages and 1.45% on wages in excess of $132,900 and a federal income tax rate of 20% on all wages, what would be an employee's net pay for the year if he earned $180,000? Round all calculations to the nearest dollar.

A)$134,867
B)$133,953
C)$144,000
D)$133,150

Question 7

Most companies are required to compute overtime at

A)the worker's regular hourly wage.
B)1.25 times the worker's regular hourly wage.
C)1.5 times the worker's regular hourly wage.
D)2.5 times the worker's regular hourly wage.

Question 8

Jerri Rice has worked 44 hours this week.She worked at least 8 hours each day.Her regular hourly wage is $12 per hour with one and one-half times her regular rate for any hours which exceed 40 hours per week.What are Jerri's gross wages for the week?

A)$528
B)$552
C)$792
D)$576

Question 9

FICA taxes do not provide workers with

A)life insurance.
B)supplemental retirement.
C)employment disability.
D)medical benefits.

Question 10

FICA taxes and federal income taxes are levied on employees' earnings without limit.

Question 11

The form showing gross earnings, FICA taxes withheld, and income taxes withheld for the year is

A)Form W-4.
B)Form W-2.
C)Form 1040.
D)Schedule A.

Question 12

FICA taxes withheld and federal income taxes withheld are mandatory payroll deductions.

Question 13

The journal entry to record the payroll for a period will include a credit to Salaries and Wages Payable for the gross

A)amount less all payroll deductions.
B)amount of all paychecks issued.
C)pay less taxes payable.
D)pay less voluntary deductions.

Question 14

An employee earnings record is a cumulative record of each employee's gross earnings, deductions, and net pay during the year.

Question 15

Which one of the following payroll taxes is not withheld from the employee's wages because it is not levied on the employee?

A)Federal income tax
B)Federal unemployment tax
C)State income tax
D)FICA tax

Question 16

The employer incurs a payroll tax expense equal to the amount withheld from the employees' wages for federal income taxes.

Question 17

By January 31, following the end of a calendar year, an employer is required to provide each employee with a(n)

A)state unemployment tax form.
B)federal unemployment tax form 940.
C)wage and tax statement form W-2.
D)employee's withholding allowance certificate form W-4.

Question 18

The state unemployment tax rate is usually 5.4% on the first $7,000 of wages paid to an employee during the year.

Question 19

The tax that is paid equally by the employer and employee is the

A)federal income tax.
B)federal unemployment tax.
C)state unemployment tax.
D)FICA tax.

Question 20

A Wage and Tax Statement shows gross earnings, FICA taxes withheld, and income taxes withheld for the year.

Question 21

The effective federal unemployment tax rate is usually

A)6.2%.
B)0.8%.
C)5.4%.
D)8.0%.

Question 22

Internal control over payroll is not necessary because employees will complain if they do not receive the correct amount on their payroll checks.

Question 23

Changes in pay rates during employment should be authorized by the

A)human resources department.
B)payroll department.
C)treasurer's department.
D)timekeeping department.

Question 24

A good internal control feature is to have a written hiring authorization form completed before a new employee is added to the payroll.

Question 25

Which of the following employees would likely receive a salary instead of wages?

A)Store clerk
B)Factory employee
C)Sales manager
D)Manual laborer

Question 26

A good internal control feature is to have several employees choose one person to punch all of their time cards.

Question 27

Control over timekeeping does not include

A)having one employee punch the time cards for several employees in the same work area.
B)time clock procedure monitoring by a supervisor.
C)pay period time reports kept by a supervisor for salaried personnel.
D)overtime approval by a supervisor.