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.
