Ch. 12

D. in all 50 states

Federal income tax is withheld from employee earnings ____.

False

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

False

Federal law requires that each employer have on file a properly completed Form W-2, Employee's Withholding Allowance Certificate, for each employee.

True

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

A. multiplying total earnings by the tax rate

Social security tax is calculated by ____.

False

Social security tax is paid by the employer only.

C. EFT

Some businesses deposit employee net pay directly to each employee bank account by using ____.

B. is the total earnings since the first of the year

The Accumulated Earnings column of the employee earnings record ____.

B. accumulated earnings

The amount on the employee earnings record used to determine if certain payroll taxes apply to an employee's earnings is ____.

B. a liability

Until payment is made, payroll taxes for an employer are ____.

True

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

C. have reached retirement age

\Medicare is for people who ____.

A. an employee earnings record

A business form used to record details affecting payments made to an employee is ____.

C. a payroll register

A business form used to record payroll information is ____.

True

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

B. withholding allowance

A deduction from total earnings of each person legally supported by a taxpayer is a ____.

True

A pay period may be weekly.

False

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

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.

False

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

B. must be maintained

Accurate and detailed payroll records ____.

False

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

True

All deductions from employee wages are recorded in a payroll register.

C. Form W-4

All employees must report their withholding allowances on a ____.

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.

D. all of the above

Each employee name is listed in a payroll register along with ____.

A. regular hours times regular rate

Employee regular earnings are calculated as ____.

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.

B. a special payroll checking account

Individual payroll checks are usually written on ____.

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.

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

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

False

The first task in preparing a payroll is to determine the number of days worked by each employee.

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.

C. pay period

The period covered by a salary payment is a ____.

True

The period covered by a salary payment is a pay period.

D. payroll

The total amount earned by all employees for a pay period is a ____.

True

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

C. Net Pay column

The total earnings paid to an employee after payroll taxes and other deductions is recorded in the payroll register ____.

D. all of the above

The total pay due for a pay period before deductions is ____.

B. federal income tax withheld

The withholding allowances of an employee affect ____.

True

Total earnings are sometimes referred to as gross pay.