Chapter 12 Accounting
what are the total earnings of a hobby shack employee who worked 44 hours in a week and earns $11.00 per hour ?
$484.00
a separate payroll checking account is used primarily to ________.
provide additional protection and control payroll payments
payroll taxes
taxes based on the payroll of a business
tax base
the maximum amount of earnings on which a tax is calculated
salary
the money paid for employee services
what is the source of the information that is recorded on each employee's payroll check stub ?
the payroll register
what does the payroll register summarize ?
the payroll register summarizes the payroll for one pay period and shows total earnings, payroll withholding's and net pay of all employees
pay period
the period covered by a salary payment
payroll
the total amount earned by all employees for a pay period
what is a payroll ?
the total amount earned by all employees for a pay period
net pay
the total earnings paid to an employee after payroll taxes and other deductions
total earnings
the total pay due for a pay period before deductions
why does Hobby Shack have a separate checking account for payroll checks ?
to help protect and control payroll payments
(T/F) a business is required by law to withhold federal income taxes from employee total earnings
true
(T/F) a business may decide to pay employee salaries every week, every two weeks, twice a month, or once a month
true
(T/F) a check for the total net pay is written and deposited in the payroll checking account
true
(T/F) all deductions from employee wages are recorded in a payroll register
true
(T/F) an act of congress can change the social security tax base and tax rate at any time
true
(T/F) an employee can be exempt from having federal income tax withheld under certain conditions
true
(T/F) businesses use payroll records to inform employees of their annual earnings and to prepare payroll reports for the government
true
(T/F) employee total earnings are calculated as regular hours X regular rate, plus overtime hours X overtime rate
true
(T/F) employers are required to have a current form w-4, employee's withholding allowance certificate, for all employees
true
(T/F) employers in many states are required to withhold state, city, or county income tax from employee earnings
true
(T/F) payroll taxes withheld represent a liability for an employer until payment is made to the government
true
(T/F) 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
(T/F) the columns of the employee earnings record consist of the amount columns in a payroll register and an accumulated earnings column
true
(T/F) the information used to prepare payroll checks is taken from a payroll register
true
(T/F) total earnings are sometimes referred to as net pay or net earnings
true
(T/F) when an employee's earnings exceed the tax base, no more social security tax is deducted
true
(T/F) when eft is used, the employee does not receive an individual check
true
how many hours were worked by an employee who arrived at 7:05 a.m. and departed at 6:05 p.m. with one hour off for lunch?
10 hours
how many hours were worked by a hobby shack employee who arrived at 8:29 and departed at 12:02 ?
4 hours
how many hours were worked by an employee who arrived at 8:10 a.m. and departed at 12:10 p.m.?
4 hours
employee earnings record
a business form used to record details affecting payments made to an employee
payroll register
a business form used to record payroll information
withholding allowance
a deduction from total earnings for each person legally supported by a taxpayer, including the employee
medicare tax
a federal tax paid for hospital insurance
social security tax
a federal tax paid for old-age, survivors, and disability insurance
why do companies complete employee earnings records ?
because a business must send a quarterly report to federal and state governments showing employee taxable earnings and taxes withheld from employee earnings
does the employer or employee pay social security tax and medicare tax ?
both the employee and the employer
how is net pay calculated ?
by subtracting total deductions from total earnings
social security tax is calculated on _______.
employee earnings up to a maximum paid in a calendar year
employee federal income tax withholdings are based on what two factors ?
employee marital status and number of withholding allowances
(T/F) a new earnings record is prepared for each employee each year
false
(T/F) a single person will have less income tax withheld than a married employee
false
(T/F) payroll time cards can be used as the basic source of information to prepare a payroll
false
(T/F) social security tax is paid by the employee only
false
(T/F) the first task in preparing a payroll is to determine the number days worked by each employee
false
(T/F) the larger the number of withholding allowances claimed, the larger the amount of income tax withheld
false
where does an employer get the information used to determine the amount of federal income tax to withhold from employees' earnings ?
from w-4
how do payroll procedures differ from employees who request that their pay be deposited through electronic funds transfer (eft) ?
individual checks are not written and do not have to be distributed
how does hobby shack calculate overtime earnings ?
overtime hours X the overtime rate
employee regular earnings are calculated as ______.
regular hours times regular rate