Analyzing and Journalizing Payroll

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

False

Since FUTA tax is paid only once a quarter, the FUTA tax expense is recorded only at the time of payment.

False

Since the credit against the FUTA tax (for SUTA contributions) is made on Form 940, the employer's payroll tax entries should include the FUTA tax at the gross amount (6.0%).

False

Since vacation time is paid when used, there is no need to accrue this time in a liability account at the end of each accounting period.

False

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

False

The adjusting entry to record the accrued vacation pay at the end of an accounting period includes credits to the tax withholding liability accounts.

False

The employer's payroll tax expenses are recorded by all employers at the time these taxes are actually paid.

False

The payroll register is used by employers in completing Forms W-2.

False

Carmen Gaetano worked 46 hours during this payweek. He is paid time-and-a-half for hours over 40 and his pay rate is $17.90/hour. What was his overtime premium pay for this workweek? $107.40 $53.70 $50.70 $161.10 $26.85

$53.70

When recording the deposit of FUTA taxes owed, the proper entry is: FUTA Tax Expense Cash FUTA Taxes Payable Cash Payroll Taxes FUTA Taxes Payable Payroll Taxes Cash FUTA Tax Expense FUTA Taxes Payable

FUTA Taxes Payable Cash

An employee's filing status never appears on the payroll register.

False

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

False

At the time of depositing FICA taxes and employees' federal income taxes, the account FICA Tax Expense is debited for both the employees' and the employer's portions of the FICA taxes.

False

At the time that the entry is made to record the employer's payroll taxes, the SUTA tax is recorded at the net amount (0.6%).

False

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

False

Direct deposit of paychecks can be forced on employees in every state.

False

Disposable earnings are the earnings remaining after withholding only federal income taxes.

False

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

False

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

False

FICA Taxes Payable—OASDI is a liability account debited for the employer's portion of the FICA tax.

False

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

False

FUTA Taxes Payable is an expense account in which are recorded the employer's federal unemployment taxes.

False

If employees must contribute to the state unemployment fund, this deduction should be shown in the payroll tax entry.

False

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

False

In all computerized payroll systems, there is still the need to manually post from the printed payroll journal entry to the general ledger.

False

In the case of a federal tax levy, the employee will notify the employer of the amount the employee wants taken out of his or her paycheck.

False

In the case of an unclaimed paycheck, the employer can hold the check indefinitely until the employee or heirs claim the paycheck.

False

In the case of multiple wage attachments, a garnishment for a student loan has priority over any other garnishment.

False

Posting to the general ledger for payroll entries is done only at the end of each calendar year.

False

The employers' OASDI portion of FICA taxes is included as part of the payroll tax entry, but the employer's HI portion of FICA taxes is not.

False

The payment of the FUTA tax and the FICA taxes by the employer to the IRS is recorded in the same journal entry.

False

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

False

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

False

Under the Uniform Unclaimed Property Act, any unclaimed paychecks must be turned over to the state after the next payday.

False

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.

False

When recording the employer's payroll taxes, a liability account entitled Employers Payroll Taxes Payable is credited for the total taxes owed (FICA, FUTA, and SUTA).

False

Which of the following accounts is an expense account in which an employer records the FICA, FUTA, and SUTA taxes? Payroll Taxes Wages Payable SUTA Taxes Payable Wages Expense None of these choices are correct.

Payroll Taxes

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

True

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

True

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

True

FICA Taxes Payable—HI is a liability account in which is recorded the liability of the employer for the HI tax on the employer as well as for the HI tax withheld from employees' wages.

True

Federal tax levies are not subject to the limits imposed on garnishments under the Consumer Credit Protection Act.

True

For child support garnishments, tips are considered part of an employee's disposable earnings.

True

For the purpose of a federal tax levy, the IRS defines take-home pay as the gross pay less taxes withheld and the other payroll deductions in effect before the tax levy was received.

True

In calculating overtime premium earnings at one and a half times the regular hourly rate, the overtime hours are multiplied by one-half the hourly rate of pay.

True

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

True

In the adjusting entry to accrue wages at the end of the accounting period, there is no need to credit any tax withholding accounts.

True

In the garnishment process, federal tax levies if delivered after child support orders take secondary priority to wages withheld for child support orders.

True

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

True

Since the FUTA tax is a social security tax, it can be charged to the same expense account as the other payroll taxes on the employer, the payroll taxes account.

True

The FICA taxes on the employer represent both business expenses and liabilities of the employer.

True

The FUTA tax part of the payroll tax entry is recorded at the net amount (0.6%) of the taxable payroll.

True

The employer keeps track of each employee's accumulated wages in the employee's earnings record.

True

The entry to record the employer's payroll taxes usually includes credits to the liability accounts for FICA (OASDI and HI), FUTA, and SUTA taxes.

True

The information needed in preparing a journal entry to record the wages earned, deductions from wages, and net amount paid each payday is obtained from the payroll register.

True

The payroll taxes account is an expense account that is debited for the FICA, FUTA, and SUTA taxes on the employer.

True

The payroll taxes incurred by an employer are FICA, FUTA, and SUTA.

True

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

True

Tips received by employees in excess of tip credit amount are not included as disposable earnings subject to garnishment

True

Union Dues Payable is a liability account credited with the deductions made from union members' wages for their union dues.

True

When the federal tax deposit is made, the employees' and employer's shares of FICA taxes are paid along with the employees' FIT taxes withheld.

True

When union dues that have been withheld from employees' wages are turned over to the union treasurer, the account Union Dues Payable is debited.

True

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.

True

Which of the following is not an expense of the employer? FUTA tax SUTA tax FICA tax—OASDI FICA tax—HI Union dues withheld

Union dues withheld

Which of the following items would require an adjusting entry at the end of each accounting period? Withholdings for a 401(k) plan Union dues withheld Vacation pay earned by employees Garnishment for child support payments None of these choices are correct.

Vacation pay earned by employees

Which of these accounts shows the total gross earnings that the employer incurs as an expense each payday? Federal Income Taxes Payable Wages Payable Wages Expense Payroll Taxes None of these choices are correct.

Wages Expense

The entry made at the end of the accounting period to record wages incurred but unpaid is: Wages Expense Wages Payable Wages Expense Cash Wages Payable Cash Wages Expense FICA Taxes Payable—OASDI FICA Taxes Payable—HIFIT Payable Wages Payable Wages Expense Payroll Taxes Wages Payroll

Wages Expense Wages Payable

The garnishment that takes priority over all others, except bankruptcy orders is : a state tax levy an administrative wage garnishment a creditor garnishment a government student loan a child support order

a child support order

In recording the monthly adjusting entry for accrued wages at the end of the accounting period, the amount of the adjustment would usually be determined by: collecting the timesheets for the days accrued. a percentage of the previous week's gross payroll. using the wages of the salaried workers only. using the same amount as the prior month's adjustment. a percentage of the previous week's net payroll.

a percentage of the previous week's gross payroll.

The employee's earnings record provides information for each of the following except: completing Forms W-2. preparing reports required by state unemployment compensation laws. determining when the accumulated wages of an employee reach cutoff levels. completing the journal entry to record the payroll. preparing the payroll register.

completing the journal entry to record the payroll.