OFFICE ACCOUNTING CHAPTER 8
On May 15, M. Griffith earned $6,000 and has the following deductions: FICA-OASDI 6.2%, FICA-Medicare 1.45%; federal income tax of $1,200; state income tax $300, and health insurance premium of $100. What is his net pay?
$3,941
For the second quarter, the amount of federal income tax withheld for a period is $27,000 and FICA withheld is $7,500. Which of the following is the correct total deposit amount for payroll taxes for the quarter?
$42,000
Wages and Salaries Expense is:
equal to gross pay.
The employee earnings record:
keeps track of an individual employee's payroll history for a calendar year.
Wages and Salaries Payable would be used to record:
net earnings of the employees not paid.
Which form is sent to the Social Security Administration along with the W-2s? (It reports total wages, FICA tax withheld, etc., for the previous year.)
Form W-3
The amount of FICA-OASDI and FICA-Medicare withheld from the employee's check is determined by the employee's:
Gross Earnings for the period and cumulative gross earnings.
The Wages and Salaries Expense account would be used to record:
Gross earnings for the office workers.
An employer must always use a calendar year for payroll purposes.
True
FIT Payable has a credit normal balance.
True
Which of the following would not be part of an employer's payroll tax expense?
Union dues withheld from an employee's paycheck
What liability account is reduced when the employees are paid?
Wages and Salaries Payable
The entry to record the payroll tax expense would include:
a credit to FICA (OASDI and Medicare) Taxes Payable.
For the second quarter, the amount of federal income tax withheld for a period is $47,000 and FICA withheld is $17,500. Which of the following is the correct total deposit amount for payroll taxes for the quarter?
$82,000
The gross pay for a particular period is $27,000 however, the FUTA taxable earnings for that amount is $15,000. If the FUTA rate is 6% and the FUTA tax credit is 5.4%, what amount does the employer owe for FUTA?
$90
Mary's cumulative earnings before this pay period were $7,300 and gross pay for the week is $1,200. Assuming the wage base limit is $7,000, how much of this week's pay is subject to taxes for FUTA and SUTA?
0
FICA OASDI Payable
1. A liability 2. Appears on the balance sheet
Office Salaries Expense
1. An expense 2. Appears on the income statement`
FICA Medicare Payable
1. a liability 2. Appears on the balance sheet
Federal Income Tax Payable
1. a liability 2. Appears on the balance sheet
Wages and Salaries Payable
1. a liability 2. Appears on the balance sheet
A calendar quarter is made up of:
13 weeks.
Which of the following is true?
A new employee must complete a W-4 when hired and the employer must complete a W-2 after year-end.
Net pay is:
A reduction in cash
The employer records amounts withheld from the employee's paycheck:
As credits to liability accounts until paid
Which of the following entries would record a company paying its state unemployment tax?
Debit SUTA payable; credit cash
Upon completing form 940, the balance due is $300 and is immediately paid. What is the correct entry? Assume the liability for this amount had not been previously recorded.
Debit payroll tax expense; credit cash
What type of account is Payroll Tax Expense?
Expense
Which of the following must also be "matched" by the employer and paid from company funds?
FICA-OASDI taxes withheld from the employee's paycheck
Which of the following would be credited if payroll tax expense is debited?
FUTA payable
Which of the following explains this accounting entry: debit SUTA payable, credit cash?
It is the payment of SUTA which was recorded as a payroll expense and a liability when the payroll was recorded
What type of an account is Wages and Salaries Payable?
Liability
The following amounts are also an expense to the company except
Net pay
Form 940 is used by employers and the end of the calendar year to:
Report the amount of unemployment tax due for the year
Which of the following would be credited if payroll tax expense is debited?
SUTA payable
For which of the following taxes is there a ceiling on the amount of employee annual earnings subject to the tax?
State unemployment taxes, FICA-OASDI, Federal unemployment taxes, All of the listed answers are correct.
Which of the following explains why amounts withheld from paychecks would be credited to liability accounts?
The amounts have not yet been paid to entities such as the IRS and state income tax divisions
Cash — Payroll Checking is a(n)
asset
Form 941 is filed:
quarterly.
J. Ryan CPA is looking at the company report showing the year-to-date gross pay, deductions, and net pay for a specific employee. Ryan is reviewing:
the employee earnings record
The debit amount to Payroll Tax Expense represents:
the employer's portion of the payroll taxes.
A debit to FUTA Payable would be made because:
the payment of FUTA was being made
The information needed to make the journal entries to record the wages and salaries expense comes from:
the payroll register.
