Accounting Chapter 12 True and False

Social security tax is paid by the employer only

False

The first task in preparing a payroll is to determine the number of days worked by each employee.

False

Total earnings are sometimes referred to as net pay or net earnings.

False

Employers in many states are required to withhold state, city, or county income tax from employee earnings

True

Payroll taxes withheld represent a liability for an employer until payment is made to the government.

True

Payroll time cards can be used as the basic source of information to prepare a payroll.

True

The amount of income tax withheld from each employee's total earnings is determined from the number of withholding allowances and by the employee's marital status

True

The columns of the employee earnings record consist of the amount columns in a payroll register and an accumulated earnings column

True

The larger the number of withholding allowances claimed, the larger the amount of income tax withheld

True

When an employee's earnings exceed the tax base, no more social security tax is deducted

True

A new earnings record is prepared for each employee each year

False

A single person will have less income tax withheld than a married employee

False

Employers are required to have a current Form W-4, Employee's withholding allowance Certificate, for all employees

True

A business is required by law to withhold federal income taxes from employee total earnings.

True

A business may decide to pay employee salaries every week, every two weeks, twice a month, or once a month.

True

All deductions from employee wages are recorded in a payroll register

True

An act of congress can change the social security tax base and tax rate at any time

True

An employee can be exempt from having federal income tax withheld under certain conditions

True

Businesses use payroll records to inform employees of their annual earnings and to prepare payroll reports for the government.

True

Employee earnings are calculated as regular hours X regular rate, plus overtime hours X overtime rate.

True