Chapter 12 True/False

A payroll ledger is a business from used to record payroll information.

False

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

False

All businesses base their salary payments on the same length of time.

False

Federal income tax is withheld from employee earning in all but two states.

False

Federal law requires that each employer have on file a properly completed from W-2, Employee's Withholding Allowance Certificate, to each employeee

False

Medicare is funded by the federal government but not under the social security law.

False

No employees are exempt from having federal income taxes withheld.

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

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

True

A pay period may be weekly.

True

A payroll system must include an accurate record of the time each employee has worked.

True

A separate checking account for payroll checks helps to protect and control payroll payments.

True

All deducations 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

Businesses must withhold federal income tax from employee total earnings.

True

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

True

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

True

Payroll taxes are based on employee total earnings.

True

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

True

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

True

Social security tax is a federal tax paid by employees and employers for old-age, survivors, and disability insurance.

True

Th total amount earned by all employees for a pay period is a payroll.

True

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

True

The information used to prepare payroll checks is taken from a payroll register.

True

The marital status and withholding allowances of an employee affect the amount of federal income tax withheld.

True

The money paid for employee services is a salary.

True

The period covered by a salary payment is a pay period

True

Total earning are sometimes referred to as gross pay.

True

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

True