Accounting 2 Chapter 12
electronic funds transfer
A computerized cash payments system that transfers funds without the use of checks, currency, or other paper documents.
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.
Salary
A fixed annual sum of money divided among equal pay periods.
commission
A method of paying an employee based on the amount of sales the employee generates.
401(k)
A qualified retirement plan sponsored by an employer.
Roth individual retirement account
A qualified retirement plan that allows tax-free withdrawals from the account.
individual retirement account
A qualified retirement plan that provides most individuals with a deferred federal income tax benefit.
qualified retirement plan
A retirement plan approved by the Internal Revenue Service.
tax base
The maximum amount of gross earnings on which a tax is calculated.
pay period
The number of days or weeks of work covered by an employee's paycheck.
direct deposit
The payment of an employee's net pay using electronic funds transfer.
payroll
The total amount earned by all employees for a pay period
voucher
A check with a detachable check stub that contains detailed information about the cash paymen
time clock
A device used to record the dates and times of every employee's arrivals and departures
payroll deduction
Any amount withheld from an employee's gross earnings
payroll taxes
Taxes based on the payroll of a business
payroll clerk
The accounting staff position that compiles and computes payroll data, then prepares, journalizes, and posts payroll transactions.
Wage
The amount paid to an employee for every hour worked
total Earnings
The total amount paid by a business for an employee's work, earned by a wage, salary, or commission
net pay
The total earnings paid to an employee after payroll taxes and other deductions.
accumulated earnings
The total gross earnings year to date for an employee