Final Exam Objective Test 3

FUTA requires the employer to pay which of the following?

A - Federal unemployment tax

Employee's earning records are kept on a ____

A - quarterly basis

____ are the year-to-date gross earnings of an employee

Accumulated earnings

Which of the following is paid by both the employer and the employee on the employee's gross earnings?

B - FICA tax

The form that employees complete to declare the number of exemptions claimed is a ____.

B - Form W-4

One example of a voluntary employee deduction is ____.

B - Insurance premiums

Lindsay earns $15 per hour. One week, she worked 44 hours. Her gross earnings for this pay week were ____.

C - $690

The overtime rate is generally paid for all hours worked per week over ____.

C - 40

A ____ is paid to the employee as a percentage of the employee's sales

Commission

Which of the following items of information is not included on the Wage and Tax Statement (Form W-2)?

D - Net income for the year

A ____ is an amount subtracted from gross earnings.

Deduction

If an employee has ____, the employer placed the employee's net pay into her or his personal bank account.

Direct Deposit

An ____ is a device used to scan certain information encoded on a magnetic strip on an employee's time card or id badge.

Electronic Badge Reader

The _____ requires alrger businesses to deposit income tax payments by electronic funds transfer

Electronic Federal Tax Payment System

The ____ is an individual payroll record kept for each employee

Employee's Earning Record

The amount deducted from gross earnings for federal income tax each pay period depends on the total earnings, marital status,a nd teh number of ____ an employee claims on Form W-4.

Exemptions

Amounts deducted from employee's earnings and held for payment by the employer are recoded as expenses in the accounting records

False

Employees usually contribute to federal unemployment taxes

False

Employers usually pay the federal withholding and the FICA taxes annually

False

Federal unemployment taxes are calculated on only the first $65,400 of an employee's net earnings

False

The State Unemployment Tax Payable account normally has a debit balance.

False

The amount fo rSalary Expense is recorded each pay period, but the amount for Payroll Tax Expense is recorded only once a year.

False

The federal unemployment tax rate is greater than the state unemployment tax rate.

False

Total net pay is debited to the Cash in Bank account.

False

When a business pays its state unemployment taxes, the State Unemployment Tax Payable account is credited

False

The form that accompanies an employer's payment of social security, Medicare, and employees' federal income taxes is a ____.

Federal Tax Deposit Coupon

By January 31, employers must provide each employee with a ____ which summarizes the employee's earnings and taxes withheld.

Form W-2

Each year, an employer must prepare and send to the IRS a ____, which summarizes the information contained on the employees' Wage and Tax Statements.

Form W-3

The ____ is the total amount earned by the employee in the pay period.

Gross Earnings

The amount of money actually received by the employee after all deductions are subtracted is called the ____.

Net Pay

An employee paid 1.5 times the regular wage is paid at an _____.

Overtime rate

The amount of time for which an employee is paid is called the ____.

Pay period

A list of employees in a business and the earnings due to each employee for a specific period of time is called ____.

Payroll

The ____ account is used to record the total of the employer's payroll taxes.

Payroll Tax Expense

The individual who prepares the payroll is called the ____.

Payroll clerk

A ____ is a form summarizing information about employees' earnings for each pay period.

Payroll register

The expense account used to record employees' earnings is often called _____.

Salaries Expense

A _____ is a fixed amount of money paid to an employee each pay period.

Salary

Most companies use a ____ to keep track of an hourly wage employee's hours.

Time Card

Employee payroll is a major expense for most companies.

True

FICA taxes on an employee's gross earnings are paid by both the employer and the employee

True

The Hospital Insurance Premiums Payable account normally has a credit balance.

True

The Payroll Tax Expense account normally has a debit balance.

True

The employees' total gross earnings amount is debited to the Salaries Expense account each pay period.

True

The payment of the payroll increases the expenses of the business.

True

The payroll register is the source of information for preparing the entry to record the payment of the payroll.

True

Taxes paid by the employer to provide funds for workers who are temporarily out of work are ____.

Unemployment Taxes

An amount of money paid to employees at a specific rate per hour is a ____.

Wage