Accounting 2 Chapter 12 true/false
Total earnings are sometimes referred to as net pay or net earnings.
False
Payroll taxes withheld represent a liability for an employer until payment is made to the government.
True
The investment income of a 401(k) account is taxable to the employee in the year earned.
false
The larger the number of withholding allowances claimed, the larger the amount of income tax withheld.
false
An act of Congress can change the social security tax base and tax rate at any time.
true
An employee can be exempt from having federal income tax withheld under certain conditions.
true
Contributions to a Roth IRA do not provide a current tax benefit.
true
Employee contributions to a 401(k) reduce the amount of earnings subject to payroll taxes.
true
Federal income tax is one example of a payroll deduction.
true
Qualified retirement plans are approved by the Internal Revenue Service.
true
Taxes on the contributions and investment income of an IRA are deferred until the funds are withdrawn.
true
The amount of income tax withheld from each employee's total earnings is determined by the number of withholding allowances and by the employee's marital status.
true
The columns of the employee earnings record consist of the amount columns in a payroll register and an Accumulated Earnings column.
true
The original voucher check, with the voucher attached, is mailed to the vendor.
true
The voucher of a payroll check contains current pay period and year-to-date earnings and deduction information.
true
Today's time clocks can feed data directly into a company's computer system.
true
When an employee's accumulated earnings exceed the tax base, no more social security tax is deducted.
true
When electronic funds transfer (EFT) is used, the employee does not receive an individual check.
true
A check for each employee's total net pay is written on the general checking account of the business.
false
Social security tax is only paid by the employer.
false
The investment income in a Roth IRA is subject to federal income taxes when withdrawn.
false
A single person will have less income tax withheld than a married employee earning the same amount.
False
A business may decide to pay employee salaries every week, every two weeks, twice a month, or once a month.
True
An hourly employee's total earnings are calculated as (Regular Hours × Regular Rate) + (Overtime Hours × Overtime Rate).
True
Employers are required to have a current Form W-4, Employee's Withholding Allowance Certificate, for all employees.
True