Accounting Chapter 13 - Payroll Liabilities and Tax Records
Form 8109
Federal Deposit Tax Coupon; form sent with payment for FICA and federal income taxes or federal unemployment taxes
False
Federal withholding taxes and social security taxes are normally paid once a year by the employer.
True
Form W-2 must be prepared and given to each employee by January 31 of the year following that in which the taxes were deducted.
False
The amount entered for Payroll Tax Expense is the total gross earnings of the pay period.
Form W-3
The transmittal of wage and tax statements that is filed by the employer with the Internal Revenue Service is called __
False
When a business transfers money from its regular checking account to the payroll checking account, the check is written for the amount of gross earnings.
Form 940
__ is the tax return that includes federal unemployment taxes paid by the employer during the year.
True
Amounts deducted from employees' earnings and held for payment by the employer become liabilities to the business.
False
Amounts withheld from gross earnings and held by the employer until the time of payment are assets of the business.
False
An employer is required to file only an annual tax report on the employee.
Credit
An increase in the State Unemployment Tax Payable account is recorded as a __
State Unemployment Tax Act (SUTA)
Law that requires employers to pay employment taxes to individual states
Federal Unemployment Tax Act (FUTA)
Law that requires employers to pay unemployment taxes to the federal government
Electronic Federal Tax Payment System (EFTPS)
System used by large businesses to deposit tax payments by electronic funds transfer
True
The Cash account is credited for the total amount that is paid by the employer to the employees.
Credit
The Medicare Tax Payable account has a normal __ balance.
Debit
The Payroll Tax Expense account has a normal __ balance.
Form 941
The document that reports the accumulated amounts of federal income taxes and FICA taxes withheld from employees' earnings for the quarter is __
True
The employer's payroll taxes are operating expenses of the business.
False
The entry for Salaries Expense is recorded each pay period but the entry for Payroll Tax Expense is recorded only at the end of the year.
Salaries Expense
The expense account used to record employee's earnings
Payroll Tax Expense
The expense account used to record the employer's payroll taxes (FICA, FUTA, SUTA)
Federal Tax Deposit Coupon
The form that is prepared and sent with the employer's check to show the amount of federal payroll taxes being sent to the federal government is a __
False
The only taxes that the employer must pay are unemployment taxes.
True
The payroll register is the source of information for preparing the journal entry for payroll.
True
The salary expense of a business is equal to the total gross earnings.
Debit
The total amount of gross earnings is entered on the __ side of the Salaries Expense account.
Credit
The total amount of net pay of all employees is entered on the __ side of the Cash in Bank account.
Form W-2
The wage and tax statement that summarizes an employees' earnings and tax deductions for the previous calendar year is called __
Unemployment Taxes
__ are usually paid only by the employer and collected to provide funds for workers who are temporarily out of work.
True
Both the employee and the employer pay the same rate for Social Security and Medicare taxes.
Debit
When a payment is made to the federal government for the employees' federal income tax, an entry is made on the __ side of the Employees' Federal Income Tax Payable account.
Debit
The Salaries Expense account has a normal __ balance.
False
The Unemployment Tax Payable account is used to record both federal and state unemployment taxes.
Fed Unemployment tax payable
.8% of gross earnings
State Unemployment tax payable
5.4% of gross earnings
False
Cash in Bank account is debited for the amount the employees actually earn in the pay period.
True
Social security tax is paid by the employer and the employees.