Deck 8: Paying,recording,and Reporting Payroll and Payroll Taxes: The Conclusion of the Payroll Process

Question 1

What is debited if State Unemployment Tax Payable (SUTA)is credited?

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

Answer 1

A

Question 2

Which of the following statements is true?

A)Payroll Tax Expense increases on the debit side of the account.
B)FICA-Social Security Tax Payable is a liability.
C)Payroll Tax Expense has a debit normal balance.
D)All of these answers are correct.

Answer 2

D

Question 3

Grammy's Bakery had the following information for the pay period ending June 30: $$\begin{array} { | l | c | c | r | c | c | } \hline \begin{array} { c } \text { Employee } \\\text { Name }\end{array} & \begin{array} { c } \text { Pay } \\\text { rate }\end{array} & \begin{array} { c } \text { Hours } \\\text { worked }\end{array} & \begin{array} { c } \text { Cumulative } \\\text { earnings }\end{array} & \text { Department } & \begin{array} { c } \text { Federal } \\\text { income tax } \\\text { withheld }\end{array} \\\hline \text { P. Ganster } & \$ 2,000 & \text { Salaried } & \$ 12,000 & \text { Kitchen } & \$ 86.00 \\\hline \text { T. Baker } & 10.00 / \mathrm { hr } & 50 & 6,500 & \text { Office } & 22.00 \\\hline\end{array}$$ Assume:
FICA-OASDI applied to the first $106,800 at a rate of 6.2%.
FICA-Medicare applied at a rate of 1.45%.
FUTA applied to the first $7,000 at a rate of 0.8%.
SUTA applied to the first $7,000 at a rate of 5.6%.
State income tax is 3.8%.
Given the above information,what would be the amount applied to Office Salaries Expense?

A)Debit $550
B)Credit $550
C)Debit $500
D)Credit $500

Answer 3

Debit $550

Question 4

Great Lakes Tutoring had the following payroll information on February 28: $$\begin{array} { | c | c | c | } \hline \text { Employee } & \text { Gross Pay } & \begin{array} { c } \text { Cumulative Earnings } \\\text { Prior to this Payroll }\end{array} \\\hline \text { R Hill } & \$ 4,000 & \$ 4,000 \\\hline\end{array}$$ Assume:
FICA tax rates are: OASDI 6.2% on a limit of $106,800 and Medicare 1.45%
State Unemployment tax rate is 2% on the first $7,000
Federal Unemployment tax rate is 0.8% on the first $7,000
Using the information above,the journal entry to record the employee's tax expense would include:

A)a debit to Payroll Tax Expense in the amount of $4,000.
B)a debit to Wages and Salaries Expense in the amount of $4,000.
C)a credit to Cash in the amount of $4,000.
D)a credit to FUTA Payable for $24.

Question 5

What type of account is Payroll Tax Expense?

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

Question 6

The employer's total FICA,SUTA,and FUTA tax is recorded as:

A)a debit to Payroll Tax Expense.
B)a credit to Payroll Tax Expense.
C)a credit to Payroll Tax Payable.
D)a debit to Payroll Tax Payable.

Question 7

The account for Payroll Tax Expense includes all of the following except:

A)federal unemployment taxes.
B)FICA taxes (OASDI and Medicare)paid by the employer for the latest payroll period.
C)state unemployment taxes.
D)federal income tax.

Question 8

The debit amount to Payroll Tax Expense represents:

A)the employer's portion of the payroll taxes.
B)the employees' portion of the payroll taxes.
C)the employer's and employees' portion of the payroll taxes.
D)None of the above are correct.

Question 9

The Wages and Salaries Expense account would be used to record:

A)net earnings for the office workers.
B)a credit to the amount owed to the office workers.
C)gross earnings for the office workers.
D)a debit for the amount of net pay owed to the office workers.

Question 10

Which of the following statements is false?

A)Payroll Tax Expense is an expense account.
B)FICA-Social Security Tax Payable increases on the credit side of the account.
C)Payroll Tax Expense increases on the debit side of the account.
D)SUTA Tax Payable increases on the debit side of the account.

Question 11

Prepaid Worker's Compensation Insurance is what type of account?

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

Question 12

What type of an account is Wages and Salaries Payable?

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

Question 13

As the Prepaid Workers Compensation is recognized,the amount will transfer to:

A)Workers Compensation Insurance Payable.
B)Workers Compensation Insurance Expense.
C)Cash.
D)Payroll Tax Expense.

Question 14

Wages and Salaries Payable would be used to record:

A)gross earnings of the employees.
B)net earnings of the employees not paid.
C)cumulative earnings of the employees
D)the paid portion of the earnings.

Question 15

Wages and Salaries Expense is:

A)equal to net pay.
B)equal to gross pay.
C)equal to the employer's taxes.
D)None of the above are correct.

Question 16

The entry to record the payroll tax expense would include:

A)a credit to Federal Income Taxes Payable.
B)a credit to Cash.
C)a credit to FICA (OASDI and Medicare)Taxes Payable.
D)a credit to Wages Payable.

Question 17

The information needed to make the journal entries to record the wages and salaries expense comes from:

A)form W-2.
B)the look-back period.
C)the payroll register.
D)form 941.

Question 18

Great Lakes Tutoring had the following payroll information on February 28: $$\begin{array} { | c | c | c | } \hline \text { Employee } & \text { Gross Pay } & \begin{array} { c } \text { Cumulative Earnings } \\\text { Prior to this Payroll }\end{array} \\\hline \text { R Hill } & \$ 4,000 & \$ 4,000 \\\hline\end{array}$$ Assume:
FICA tax rates are: OASDI 6.2% on a limit of $106,800 and Medicare 1.45%
State Unemployment tax rate is 2% on the first $7,000
Federal Unemployment tax rate is 0.8% on the first $7,000
Using the information above,the journal entry to record the payroll tax expense for Great Lakes Tutoring would include:

A)a debit to Payroll Tax Expense in the amount of $390.
B)a credit to FUTA Payable for $24.
C)a credit to SUTA Payable for $60.
D)All of the above are correct.

Question 19

Payroll Cash is a(n):

A)revenue.
B)liability.
C)asset.
D)expense.

Question 20

Grammy's Bakery had the following information for the pay period ending June 30: $$\begin{array} { | l | c | c | r | c | c | } \hline \begin{array} { c } \text { Employee } \\\text { Name }\end{array} & \begin{array} { c } \text { Pay } \\\text { rate }\end{array} & \begin{array} { c } \text { Hours } \\\text { worked }\end{array} & \begin{array} { c } \text { Cumulative } \\\text { earnings }\end{array} & \text { Department } & \begin{array} { c } \text { Federal } \\\text { income tax } \\\text { withheld }\end{array} \\\hline \text { P. Ganster } & \$ 2,000 & \text { Salaried } & \$ 12,000 & \text { Kitchen } & \$ 86.00 \\\hline \text { T. Baker } & 10.00 / \mathrm { hr } & 50 & 6,500 & \text { Office } & 22.00 \\\hline\end{array}$$ $$\text { Assume : }$$ FICA-OASDI applied to the first $106,800 at a rate of 6.2%.
FICA-Medicare applied at a rate of 1.45%.
FUTA applied to the first $7,000 at a rate of 0.8%.
SUTA applied to the first $7,000 at a rate of 5.6%.
State income tax is 3.8%.
Given the above information,what would be the amount applied to Kitchen Salaries Expense?

A)Debit $12,000
B)Credit $12,000
C)Debit $2,000
D)Credit $2,000

Question 21

The entry to record the payment of taxes withheld from employees and FICA taxes would be to:

A)credit Cash; debit FICA-Social Security Payable,FICA-Medicare Payable,and Federal Income Tax Payable.
B)debit Cash; credit FICA-Social Security Payable,FICA-Medicare Payable,and Federal Income Tax Payable.
C)credit Cash; credit FICA-Social Security Payable,FICA-Medicare Payable,and Federal Income Tax Payable.
D)None of these answers are correct.

Question 22

Prepare a general journal payroll entry for Advanced Computer Programming using the following information:
Assume the following:
a)FICA: OASDI,6.2% on a limit of $106,800; Medicare,1.45%
b)Federal income tax is 15% of gross pay
c)Each employee pays $20 per week for medical insurance

Question 23

Form 941 taxes include OASDI,Medicare,and federal unemployment tax.

Question 24

Payroll information for Kinzer's Interior Decorating for the first week in October is as follows:
Taxable earnings for FICA-
Taxable earnings subject to Federal and State Unemployment taxes: $5,000
Assume the following tax rates:
Required: Prepare the payroll tax expense entry.

Question 25

FIT Payable has a credit normal balance.

Question 26

Using the information provided below,prepare a journal entry to record the payroll tax expense for Mr.B's Carpentry.
Assume:
FICA tax rates are: OASDI 6.2% on a limit of $106,800 and Medicare 1.45%
State unemployment tax rate is 2% on the first $7,000
Federal unemployment tax rate is 0.8% on the first $7,000.

Question 27

What liability account is reduced when the employees are paid?

A)Payroll Taxes Payable
B)Federal Income Taxes Payable
C)Wages and Salaries Payable
D)Wages and Salaries Expense

Question 28

Why would a company use a separate payroll cash account?

A)Provides for better internal control
B)Ease of account reconciliation
C)Determine whether or not the employee has cashed their check
D)All of the above are correct.

Question 29

Record in the general journal the payroll tax entry for the week ended August 31.Use the following information gathered to make the entry.
a)FICA tax rate is: OASDI 6.2% on a limit of $106,800,and Medicare is 1.45%
b)Federal Unemployment is 0.8% on a limit of $7,000
c)State Unemployment is 2% on a limit of $7,000

Question 30

The payroll tax expense is recorded at the same time the payroll is recorded.

Question 31

Mike's Door Service's payroll data for the second week of June included the following:
Taxable earnings for FICA:
Taxable earnings for state unemployment taxes $2,000
Assume the following tax rates:
Required: Prepare the payroll tax expense entry.

Question 32

Sweetman's Recording Studio payroll records show the following information:
Assume the following:
a)FICA: OASDI,6.2% on a limit of $106,800; Medicare,1.45%
b)Each employee contributes $40 per week for union dues
c)State income tax is 5% of gross pay
d)Federal income tax is 20% of gross pay
Prepare a general journal payroll entry.

Question 33

If Wages and Salaries Payable is debited,what account would most likely be credited?

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

Question 34

An employer must always use a calendar year for payroll purposes.

Question 35

The employer records deductions from the employee's paycheck:

A)as debits to expense accounts.
B)as credits to liability accounts until paid.
C)as debits to asset accounts until paid.
D)as credits to capital accounts.

Question 36

Using the information below,determine the amount of the payroll tax expense for B.Harper Company's first payroll of the year.In your answer list the amounts for FICA (OASDI and Medicare),SUTA,and FUTA.
Assume:
FICA tax rates are: OASDI 6.2% on a limit of $106,800 and Medicare 1.45%
State Unemployment tax rate is 5.0% on the first $7,000
Federal Unemployment tax rate is 0.8% on the first $7,000

Question 37

FICA taxes are levied only on employees.

Question 38

There is no limit on the amount of taxes paid for SUTA.

Question 39

When a business starts,what must it obtain that identifies itself to the government?

A)State Employment Number
B)Federal Unemployment Number
C)Employer Identification Number
D)A look-back period

Question 40

The balance in the Wages and Salaries Expense account is equal to net pay.

Question 41

Prepare the general journal entry to record the employer's payroll tax expense.
___________________________________________ _________ _________
___________________________________________ _________ _________
___________________________________________ _________ _________
___________________________________________ _________ _________

Question 42

Why are all of the employer payroll taxes listed in separate payable accounts?

Question 43

The look-back period is used to determine whether:

A)a business should make its Form 941 tax deposits on a monthly or semiweekly basis.
B)an employer will use Form 940.
C)an employer has sent the W-2s to their employees on timely basis.
D)an employer must pay unemployment taxes.

Question 44

A calendar quarter is made up of:

A)4 months.
B)13 weeks.
C)12 weeks.
D)however many weeks are needed to complete the month.

Question 45

Workers' Compensation Insurance is:

A)paid by the employer to protect the employee against job-related injury or death.
B)paid by the employee to protect himself/herself against job-related accidents or death.
C)paid by the employer to protect the employee against non job-related injury or death.
D)paid by the employee to protect himself/herself against non job-related accidents and death.

Question 46

Different deposit rules apply to employers based on the amount collected and owed by that employer.

Question 47

The tax paid by the employer for both the employee and employer:

A)must be deposited in an authorized depository.
B)must be deposited directly in the company's checking account.
C)can be paid when the company is determined to have excess cash.
D)None of these answers are correct.

Question 48

Compute the total federal income tax.________

Question 49

Prepare the general journal entry to record the payroll.
___________________________________________ _________ _________
___________________________________________ _________ _________
___________________________________________ _________ _________
___________________________________________ _________ _________
___________________________________________ _________ _________
___________________________________________ _________ _________
___________________________________________ _________ _________
___________________________________________ _________ _________
___________________________________________ _________ _________

Question 50

FUTA taxes are paid:

A)by the end of January of the following year if the amount owed is less than $500.
B)by the end of the month following the end of the calendar quarter if the amount owed is more than $500.
C)at the same time as the Form 941 taxes.
D)Both A and B are correct.

Question 51

The correct journal entry to record the payment of SUTA is:

A)debit SUTA Expense; credit Cash.
B)debit Cash; credit SUTA Expense.
C)debit Cash; credit SUTA Payable.
D)debit SUTA Payable; credit Cash.

Question 52

Compute the total state income tax.________

Question 53

Compute the employers payroll tax.________

Question 54

Compute the total deductions.________

Question 55

The correct journal entry to record the payment of FUTA is to:

A)debit Cash; credit FUTA Payable.
B)debit FUTA Expense; credit Cash.
C)debit FUTA Payable; credit Cash.
D)debit Cash; credit FUTA Expense.

Question 56

Compute the net pay.________

Question 57

The journal entry to record the estimated advance premium payment for workers' compensation is:

A) Cash
Prepaid Insurance, Workers' Compensation
B) Prepaid Insurance, Workers' Compensation
Cash
C) $$\text { Workers' Compensation Insurance Expense }$$
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\text { Cask }$
D) Workers' Compensation Insurance Payable
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Cash

Question 58

Why are the employee deductions recorded as payables on the employer's books?

Question 59

Businesses will make their payroll tax deposits based on payroll taxes collected.

Question 60

A monthly depositor:

A)is an employer who only has to deposit Form 941 taxes on the 15th day of the month (or next banking day).
B)is determined by the amount of Form 941 taxes that they paid in the prior year.
C)will remain a monthly depositor,once classified,for one year at which time they will be reevaluated.
D)All of the above answers are correct.

Question 61

Compute the employees' FICA-Medicare.________

Question 62

Compute the total state income tax.________

Question 63

Premiums for worker's compensation insurance may be adjusted based on actual payroll amounts at the end of the year.

Question 64

S.Ferrari,an employee of Plum Hollow Country Club,earned $1,100 during the first week of January.His withholding included: federal income tax,15%; state income tax,5%; FICA-OASDI,6.2%; FICA-Medicare,1.45%; and union dues $25.Determine the tax for OASDI,Medicare,Federal Income Tax,and State Income Tax.

Question 65

The employer pays the same amount as the employee for Federal Unemployment taxes.

Question 66

Both employer and employee contribute to FICA-OASDI and SUTA tax.

Question 67

Compute the total federal income tax.________

Question 68

A banking day is any day that the bank is open to the public for business.

Question 69

Compute the total retirement.________

Question 70

Compute the total employers payroll tax.________

Question 71

Compute the total gross earnings for the tutors.________

Question 72

Compute the employees' FICA-OASDI.________

Question 73

The following amounts are an expense to the company except:

A)FICA-OASDI Payable.
B)FUTA Payable.
C)SUTA Payable.
D)All of the above are correct.

Question 74

Grammy's Bakery had the following information for the pay period ending June 30: $$\begin{array} { | l | c | c | r | c | c | } \hline \begin{array} { c } \text { Employee } \\\text { Name }\end{array} & \begin{array} { c } \text { Pay } \\\text { rate }\end{array} & \begin{array} { c } \text { Hours } \\\text { worked }\end{array} & \begin{array} { c } \text { Cumulative } \\\text { earnings }\end{array} & \text { Department } & \begin{array} { c } \text { Federal } \\\text { income tax } \\\text { withheld }\end{array} \\\hline \text { P. Ganster } & \$ 2,000 & \text { Salaried } & \$ 12,000 & \text { Kitchen } & \$ 86.00 \\\hline \text { T. Baker } & 10.00 / \mathrm { hr } & 50 & 6,500 & \text { Office } & 22.00 \\\hline\end{array}$$ $$\text { Assume: }$$ FICA-OASDI applied to the first $106,800 at a rate of 6.2%.
FICA-Medicare applied at a rate of 1.45%.
FUTA applied to the first $7,000 at a rate of 0.8%.
SUTA applied to the first $7,000 at a rate of 5.6%.
State income tax is 3.8%.
Given the above information,what would be the amount applied to FUTA Payable?

A)Debit $4.00
B)Credit $4.00
C)Debit $20.40
D)Credit $20.40

Question 75

From the following data,calculate the estimate annual advance premium for workers' compensation insurance and record it in general journal form.

Question 76

Estimate the annual advance premium for workers' compensation insurance,and record it in general journal form using the following data:

Question 77

A company must pay Form 941 taxes electronically if:

A)they do business in multiple states.
B)they pay more than $200,000 in a given year.
C)they pay less than $200,000 in a given year.
D)The company would never have to pay electronically.

Question 78

Compute the total gross earnings for the office._________

Question 79

Compute the total overtime earnings.________

Question 80

Compute the total regular earnings.________