Deck 7: The Payroll Register, Employees Earnings Records, and Accounting System Entries

Question 1

Employee earnings records form the link between accounting and the human resources department.

Answer 1

True

Question 2

In the General Ledger, the debit column reflects the balance of the account.

Answer 2

False

Question 3

Which of the following reports links the accounting and the human resources departments?

A) Employee earnings record
B) Payroll register
C) Labor reports
D) Form 941

Answer 3

A

Question 4

Which of the following is true about the fundamental accounting equation?

A) It may be expressed as assets + liabilities = owners' equity.
B) It is always expressed as assets = liabilities - owners' equity.
C) It must remain in balance at all times.
D) One side of the equation must equal zero.

Question 5

The payroll register is identical for each company.

Question 6

Columns included in the payroll register to compute net pay may include which of the following? (You may select more than one answer. Single click the box with the question mark to produce a check mark
For a correct answer and double click the box with the question mark to empty the box for a wrong
Answer. Any boxes left with a question mark will be automatically graded as incorrect.)

A) Medicare tax
B) Employee address
C) Employee signature
D) Garnishments

Question 7

Two complete payroll-related General Journal entries are recorded each pay period: one for the employees'
payroll, one for the employer's share of the taxes.

Question 8

Besides containing the supporting data for periodic tax reports, the employee earnings record serves as a
backup in the event of computer failure.

Question 9

The purpose of the net pay and check number columns in the payroll register is to verify accurate disbursal
of payroll.

Question 10

Which of the following columns would be used as part of a general journal entry? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct
Answer and double click the box with the question mark to empty the box for a wrong answer. Any
Boxes left with a question mark will be automatically graded as incorrect.)

A) Net pay
B) Total overtime earnings
C) Earnings subject to FICA tax
D) Health insurance payable

Question 11

Which columns might an employer include to facilitate employer-share payroll tax General Journal entries? (You may select more than one answer. Single click the box with the question mark to produce a
Check mark for a correct answer and double click the box with the question mark to empty the box
For a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)

A) Worker's Compensation
B) FUTA
C) SUTA
D) Employer's Federal Income tax

Question 12

Payroll accruals reflect the amount of payroll paid but not earned at the end of the financial period.

Question 13

To which items is information from the payroll register transferred? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer
And double click the box with the question mark to empty the box for a wrong answer. Any boxes
Left with a question mark will be automatically graded as incorrect.)

A) Employee earnings record
B) General Journal
C) Labor reports
D) Company website

Question 14

How does the payroll register connect with the employees' earnings records?

A) Both documents contain year-to-date totals of taxes.
B) Both documents contain information about the employee's address and job title.
C) Both documents contain information from multiple pay periods.
D) Both documents contain details of employee earnings, deductions, and disbursement for a pay

Question 15

How does a payroll accountant keep track of employee's year-to-date earnings for wage bases on taxes like FICA, FUTA, and SUTA?

A) Form W-2
B) Employee earnings record
C) Form W-4
D) Payroll register

Question 16

Why is it important to have columns on the payroll register title "Earnings subject to Federal Withholding" and "Earnings subject to FICA"?

A) Both columns contain information about the employer's tax matching responsibilities.
B) It facilitates accuracy in employee payroll tax computations.
C) It allows payroll employees to divert funds into faux accounts.
D) It adds complexity to the payroll register.

Question 17

The information in the payroll register forms the basis for entries in the Employee Earnings Records and the
General Journal.

Question 18

Which of the following best describes the purpose of the payroll register?

A) It is a list of all persons and companies that the company pays money during a period.
B) It is an individual register maintained for each employee, listing of all the payroll information.
C) It is a worksheet that accountants use to ensure payroll accuracy.
D) It is a report that becomes published with other financial reports.

Question 19

A debit always decreases the balance of an account.

Question 20

The General Journal contains records of a firm's financial transactions, which appear chronologically.

Question 21

Dooley Publishing has the following payroll data for its July 1 pay date: Jul 1 Wages and salaries expense 522 $ 182,930.00
Federal withholding tax payable 220 $ ???
Social Security tax payable 221 10,517.12
Medicare tax payable 222 2,459.65
401(k) contributions payable 223 6,402.55
Health Insurance payable 224 13,299.01
Union Dues payable 227 4,573.25
Wages and salaries payable 226 113,562.94
Jul 1 Wages and salaries payable 226 113,562.94
Cash 101 113,562.94
How much Federal withholding tax was deducted from employees' pay?

A) $42,083.87
B) $29,391.98
C) $15,203.14
D) $32,115.48

Question 22

Zipperle Company has the following payroll information for the pay period ending September 18, 20XX: Gross pay $ 27,894.50
Federal withholding tax $ 3,570.00
Social Security tax $ 1,670.56
Medicare tax $ 390.70
401(k) contributions $ 1,115.78
Health Insurance $ 950.00
Garnishment $ 450.00
Net pay $ 19,747.46
Which items would be debited in the General Journal entry to record the employees' share of the payroll?

A) Net pay
B) Gross pay
C) Garnishment
D) 401(k) contributions

Question 23

Which of these accounts is increased by a debit? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the
Box with the question mark to empty the box for a wrong answer. Any boxes left with a question
Mark will be automatically graded as incorrect.)

A) Expenses
B) Revenue
C) Assets
D) Owners' Capital

Question 24

Supermeg Dry Cleaners had the following payroll data for its May 14 pay date: May 14 Wages and salaries expense 522 $ 187,327.54
Federal withholding tax payable 220 $ 31,845.68
Social Security tax payable 221 10,769.95
Medicare tax payable 222 2,518.78
401(k) contributions payable 223 6,556.46
Health Insurance payable 224 13,618.71
Union Dues payable 227 4,683.19
Wages and salaries payable 226 117,334.77
May 14 Wages and salaries payable 226 117,334.77
Cash 101 117,334.77
When the firm remits the union dues for this pay period, what is the correct General Journal entry?

A) Debit Union Dues Payable $4,683.19; Credit Cash $4,683.19
B) Debit Cash $4,683.19; Credit Union Dues Payable $4,683.19
C) Debit Union Dues Payable $4,683.19; Credit Cash $6,556.46
D) Debit Cash $6,556.46; Credit Union Dues Payable $4,683.19

Question 25

When a firm has wages earned but not yet paid at the end of a financial reporting period, what must it do to recognize the liabilities and expenses?

A) It must credit the asset accounts for the appropriate payroll amounts.
B) It must create an adjusting entry to recognize the payroll accrual.
C) It must pay its employees for the wages earned as of that date.
D) It must wait until the next financial period to record the payroll data.

Question 26

In the following payroll transaction, what is the amount of the net pay? Jun 23 Wages and salaries expense 522 2,349,839.00
Federal withholding tax payable 220 399,472.63
Social Security tax payable 221 145,170.77
Medicare tax payable 222 33,951.23
401(k) contributions payable 223 93,993.56
Health Insurance payable 224 8,375.00
State Income tax payable 227 117,491.95
Wages and salaries payable 226 ???

A) $399,472.63
B) $2,349,839.00
C) $93,993.56
D) $1,551,383.86

Question 27

Which of these accounts is increased by a credit? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the
Box with the question mark to empty the box for a wrong answer. Any boxes left with a question
Mark will be automatically graded as incorrect.)

A) Owners' capital
B) Revenue
C) Assets
D) Expenses

Question 28

Supermeg Dry Cleaners had the following payroll data for its May 14 pay date: May 14 Wages and salaries expense 522 $ 187,327.54
Federal withholding tax payable 220 $ 31,845.68
Social Security tax payable 221 10,769.95
Medicare tax payable 222 2,518.78
401(k) contributions payable 223 6,556.46
Health Insurance payable 224 13,618.71
Union Dues payable 227 4,683.19
Wages and salaries payable 226 117,334.77
May 14 Wages and salaries payable 226 117,334.77
Cash 101 117,334.77
When the firm remits its health insurance premium for this pay date, what is the General Journal entry?

A) Debit Cash $27,237.42; Credit Health Insurance Payable $27,237.42
B) Debit Cash $13,618.71; Credit Health Insurance Payable $13,618.71
C) Debit Health Insurance Payable $13,618.71; Credit Cash $13,618.71
D) Debit Health Insurance Payable $27,237.42; Credit Cash $27,237.42

Question 29

Kierofree Air Tours has the following payroll data for its November 5 pay date: Nov 5 Wages and salaries expense 522 $ 199,023.00
Federal withholding tax payable 220 $ 33,833.91
Social Security tax payable 221 11,442.35
Medicare tax payable 222 2,676.03
401(k) contributions payable 223 6,965.81
Health Insurance payable 224 14,468.97
Union Dues payable 227 4,975.58
Wages and salaries payable 226 ???
How much is the net pay?

A) $199,023.00
B) $124,660.35
C) $185,216.26
D) $142,578.94

Question 30

Which of the following is an example of an asset account?

A) Payroll Tax Expense
B) Revenue
C) Salaries Payable
D) Cash

Question 31

McHale Enterprises has the following incomplete General Journal entry for the most recent pay date: Oct 27 Wages and salaries expense 522 $298,384.00
Federal withholding tax payable 220 $ 50,725.28
Social Security tax payable 221 17,980.56
Medicare tax payable 222 4,205.13
401(k) contributions payable 223 ???
Health Insurance payable 224 8,375.00
Savings bonds payable 227 1,850.00
Wages and salaries payable 226 202,671.98
Oct 27 Wages and salaries payable 226 202,671.98
Cash 101 202,671.98
What is the amount of the 401(k) contributions for the pay date?

A) $2,253.00
B) $15,298.22
C) $12,576.05
D) $9,215.38

Question 32

On December 1, 20XX, Riley Sanders invested $250,000 to open Sanders Enterprises. What is the General Journal entry to record this transaction?

A) Debit R. Sanders Capital, $250,000; Credit Cash, $250,000
B) Debit Cash, $250,000; Credit Revenue, $250,000
C) Debit Revenue, $250,000; Credit Cash, $250,000
D) Debit Cash, $250,000; Credit R. Sanders Capital, $250,000

Question 33

What is the term for transferring data from the General Journal to the General Ledger?

A) Ledgering
B) Posting
C) Cross-referencing
D) Transcribing

Question 34

Which of the following is an example of a liability account?

A) Cash
B) Owners' Capital
C) Salaries Payable
D) Wages Expense

Question 35

In the following General Journal transaction, to what do the numbers 101 and 301 refer? Nov 1 Cash 101 15,000
A) General Ledger account numbers

A) Stockwell, Capital 301 15,000
B) Transaction numbers
C) Employee numbers
D) General journal numbers

Question 36

What are the General Journal entries that should appear on each pay date?

A) Employee pay accrual and employee pay disbursement
B) Employee pay remittance and voluntary deduction remittance
C) Employee pay disbursement and voluntary deduction remittance
D) Employee pay recording and employer share payroll taxes recording

Question 37

If a firm accrues the payroll due but not paid at the end of a financial period, what should it do on the first day of the next financial period?

A) It should create a reminder about the accrual to ensure accuracy of computations on the next pay date.
B) It should make a note to create the reversing entry at the end of the next financial period.
C) It should disburse the accrued pay to the employees.
D) It should create a reversing entry in the General Journal.

Question 38

The following data is for the January 19 pay date for Waryzbok Inc.: Jan 19 Wages and salaries expense 522 $ 12,987.00
Federal withholding tax payable 220 $ 2,207.79
Social Security tax payable 221 ???
Medicare tax payable 222 ???
401(k) contributions payable 223 454.55
Health Insurance payable 224 944.15
State Income tax payable 227 324.68
Wages and salaries payable 226 8,134.55
Jan 19 Wages and salaries payable 226 8,134.55
Cash 101 8,134.55
Which of the following represents the missing Social Security and Medicare taxes, assuming that the health
Insurance is qualified under Section 125?

A) Social Security tax, $204.15; Medicare tax, $792.35
B) Social Security tax, $792.35; Medicare tax, $204.15
C) Social Security tax, $746.66; Medicare tax, $174.62
D) Social Security tax, $188.31; Medicare tax, $805.19

Question 39

Which of the following is an example of a liability account?

A) Payroll Taxes Expense
B) FUTA Payable
C) Salaries and Wages Expense
D) Cash

Question 40

In which order are transactions listed in the General Journal?

A) Chronologically
B) Order of importance
C) Alphabetically
D) Numerically

Question 41

Which of the following payroll items is included on the Balance Sheet?

A) Health insurance expense
B) Salaries and wages expense
C) Payroll taxes expense
D) Federal withholding tax payable

Question 42

What does the term "billable time" mean as it pertains to payroll accounting?

A) It is employee labor that may be billed to customers.
B) It is employee labor that does not pertain to labor on customer jobs.
C) It is non-traceable labor that a company must absorb as overhead.
D) It is non-employee labor that the company must pay.

Question 43

Which of the following payroll items is not reflected on the income statement?

A) Salaries and wages expense
B) Payroll taxes expense
C) Health insurance expense
D) Federal withholding tax payable

Question 44

Rushing River Boats has the following data in its Social Security tax payable General Ledger account: Social Security tax payable ACCOUNT NO. 221
BALANCE
DATE DESCRIPTION POST REF. DEBIT CREDIT DEBIT CREDIT
Jan 31 J4 420 1,620
Feb 15 J5
It is a monthly schedule depositor. What entry should appear in the General Ledger to reflect the tax
Remittance on February 15?

A) Debit $1,620
B) Credit $1,620
C) Debit $420
D) Credit $420

Question 45

Which of the following financial report(s) reflect the effects of debit and credit General Journal entries used in payroll accounting? (You may select more than one answer. Single click the box with the question
Mark to produce a check mark for a correct answer and double click the box with the question mark
To empty the box for a wrong answer. Any boxes left with a question mark will be automatically
Graded as incorrect.)

A) Income Statement
B) Trial Balance
C) Balance Sheet
D) Labor Distribution Report

Question 46

On which financial report will employer-paid portions of health insurance premiums be listed?

A) The statement of owners' equity
B) The income statement
C) The balance sheet
D) The labor report

Question 47

As of the June 11 pay date, the General Ledger account for Burling Mills has a balance of $14,289 in its Federal withholding tax payable account. A credit of $16,250 is recorded on the June 25 pay date. What is
The balance in the account?

A) Debit $1,961
B) Debit $30,539
C) Credit $1,961
D) Credit $30,539

Question 48

Rushing River Boats has the following data in its Social Security tax payable General Ledger account: Social Security tax payable ACCOUNT NO. 221
BALANCE
DATE DESCRIPTION POST REF. DEBIT CREDIT DEBIT CREDIT
Jan 31 J4 420 1,620
Feb 15 J5
For the entry on January 31, what does the J4 signify?

A) It is the fourth entry in the General Journal on that date.
B) The account appears fourth in the list of liability accounts.
C) It is the fourth repetition of the same entry.
D) The transaction appears on page four of the General Journal.

Question 49

Enchanted Creations has the following data in its Federal withholding tax payable General Ledger account: ACCOUNT Federal withholding tax payable ACCOUNT NO. 220
BALANCE
DATE DESCRIPTION POST REF. DEBIT CREDIT DEBIT CREDIT
Apr 16 J23 16,495 32,990
Apr 30 J27 16,495
What is the balance of the account as of April 30?

A) Debit $49,485
B) Credit $16,495
C) Debit $16,495
D) Credit $49,485

Question 50

What is a use of a firm's labor trend reports? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box
With the question mark to empty the box for a wrong answer. Any boxes left with a question mark
Will be automatically graded as incorrect.)

A) It allows managers to determine the effect of employee labor on departmental profits.
B) It allows managers to predict future labor costs.
C) It is a report designed for external stakeholders.
D) It highlights issues and results of seasonal labor.

Question 51

What is true about the trial balance?

A) The total of the debits must equal the total of the credits.
B) It contains a detailed listing of every transaction during a period.
C) Payroll accounts do not appear on the trial balance because of their changeable nature.
D) It may contain whatever accounts the accountant wishes to include.

Question 52

What is the primary purpose of a labor report?

A) It communicates departmental profitability.
B) It depicts the ideal distribution of labor in a firm.
C) It designates where labor is used in a firm.
D) It is a report designed to be read by parties external to the firm.

Question 53

How do accrued, but not paid, wages appear on the balance sheet?

A) As assets
B) As equity
C) As expenses
D) As liabilities

Question 54

What effect do payroll entries have on a firm's accounting system?

A) They reduce the firm's liabilities.
B) They increase the firm's assets.
C) They increase the owners' equity.
D) They increase the firm's expenses.

Question 55

In what order are accounts presented on the trial balance?

A) By order of importance
B) By dollar amount
C) Alphabetically
D) The same as the chart of accounts

Question 56

On October 15, Eco Brewers had a balance of $4,390 in its Social Security tax payable account. It posted an additional $4,390 on its October 31 pay date. Since Eco Brewers is a monthly schedule depositor, what entry
Should appear on November 15 for the remittance of the month's Social Security taxes?

A) Credit $8,780
B) Debit $4,390
C) Credit $4,390
D) Debit $8,780

Question 57

In general, how are the expenses associated with the payroll accountant's labor allocated in a firm?

A) They are allocated to one department.
B) They are billed directly to a customer.
C) They are reported as part of the firm's overhead.
D) They are billed directly to each department manager.

Question 58

Frellies Gym has a credit balance of $31,485.27 in its Wages and Salaries Payable General Ledger account as of August 16. If the pay date is August 16, what transaction should appear in the Wages and Salaries Payable
General Ledger account on that date?

A) Debit $31,485.27
B) Debit $62,970.54
C) Credit $31,485.27
D) Credit $62,970.54

Question 59

Didier and Sons had the following employer's share payroll tax general journal entry for the May 5 pay date: May 5 Payroll Taxes Expense $ 27,671.87
Federal income tax payable 11,955.00
Social Security tax payable ???
Medicare tax payable 3,197.15
FUTA tax payable 1,322.96
SUTA tax payable 9,481.20
What is the amount of the Social Security tax payable?

A) $1,582.39
B) $2,572.59
C) $1,715.56
D) $1,875.98

Question 60

Which report contains employer share tax expenses for a period?

A) The income statement
B) The labor report
C) The statement of owners' equity
D) The balance sheet

Question 61

The payroll register contains ________.

A) the beginning and ending dates of the pay period
B) the total gross pay, deductions, and net pay during the period
C) the name of the firm and the payroll accountant
D) the employee's name, social security number, and address

Question 62

Besides payroll information, the payroll register contains ________.

A) the firm's payroll checking account information
B) tax remittance information
C) proof of payroll deposits
D) information about the firm's liabilities

Question 63

How does a debit balance in the wages and salaries expense account affect a firm's income statement?

A) A debit balance will increase the expenses of the firm's income statement. This will decrease the total expenses of the firm and increase the net income of the firm.
B) A debit balance will increase the expenses of the firm's income statement. This will increase the total expenses of the firm and decrease the net income of the firm.
C) A debit balance will decrease the expenses of the firm's income statement. This will increase the total incomes of the firm and decrease the net income of the firm.
D) A debit balance will increase the income of the firm's income statement. This will increase the total

Question 64

The ________ is the master document that contains an employee's marital status, deductions, and year-to- date earnings.

A) Form W-4
B) Payroll register
C) Employee earnings record
D) Personnel file

Question 65

At the end of the financial period, the payroll accountant records the ________ of the employee's pay that is earned but not yet paid; in the next financial period, this entry is ________.

A) Accrual; reversed
B) Reversal; accrued
C) Total; carried forward
D) Amount; deleted

Question 66

It is important that the payroll accountant understand the flow of the payroll transactions, especially when working with ________.

A) Accounting software packages
B) The payroll register
C) Payroll tax reports
D) The employee earnings record

Question 67

The purpose of the ________ is to record all the financial transactions of a firm.

A) Payroll register
B) General Journal
C) T-account
D) General Ledger

Question 68

When journalizing the employees' pay accrual, the ________ is/are the debit(s), and the ________ is one of the credits.

A) Net pay; gross pay
B) Payroll tax liabilities; gross pay
C) Cash account; net pay
D) Gross pay; net pay

Question 69

________ is the transferring of information from the General Journal to the General Ledger.

A) Posting
B) Annotating
C) Computing
D) Accruing

Question 70

A(n) ________ is a collection of cash and other items that are used in the operation of the business.

A) Revenue
B) Equity
C) Asset
D) Liability

Question 71

The ________ reflects all unpaid payroll liabilities at any point in the financial period.

A) Income statement
B) Statement of Owners' Equity
C) Payroll register
D) Balance sheet

Question 72

Why does company profitability decrease in direct proportion to the payroll expenses?

A) Because payroll represents an asset and an income of the business. The higher payroll incomes are, the higher the profitability will be.
B) Because payroll represents an asset and an income of the business. The lower the payroll expenses are, the higher the profitability will be.
C) Because payroll represents a liability and an expense of the business. The higher payroll expenses are, the lower the profitability will be.
D) Because payroll represents a liability and an expense of the business. The lower payroll expenses