1. A law that regulates overtime earnings is called:
Federal Unemployment Tax Act
Tax Payment Act
Fair Labor Standards Act
Federal Insurance Contribution Act
2. To which of the following payroll taxes are employers required to contribute a matching portion for each employee?
State unemployment
Federal unemployment
FICA Medicare
FICA Social Security
All of these
3. Mary Jane's cumulative year-to-date earnings are $7,200. On June 30th, Mary Jane earned $600. What is the FUTA tax amount that Mary Jane's employer must record and pay on her most recent earnings?
$0
$4.80
$52.80
$56.00
4. A plumber who sets his own work schedule is an example of:
Independent Contractor
Employee
Employer
Freelancer
5. Which of the following statements is true about FICA Social Security and Medicare?
Employers match the employee's deduction for FICA Medicare but pay a higher percentage for FICA Social Security.
Only employees have this deduction.
Only employers are responsible for FICA taxes.
Both FICA Social Security and Medicare have no wage ceilings.
6. Which of the following payroll taxes has a maximum of earnings subject to the tax?
State unemployment tax
FICA Social Security
FICA Medicare
All of these
Both state unemployment tax and FICA Social Security
7. Which of the following statements is NOT true about Workers' Compensation Insurance?
Employers generally pay premiums in advance.
Most states require employers to provide coverage.
Employers normally pass along the cost of coverage to employees.
Premium rates vary based on risk and claims.
8. In a payroll journal entry, a credit to Federal Withholding Tax Payable indicates
Federal taxes have been withheld from the employee and are a liability until paid to the governing agency
Federal taxes have been paid to the governing agency
Federal taxes are due to be withheld from the employee
None of the above
9. John Smith has cumulative yearly earnings of $24,700, counting his current pay period salary amount of $3,500. Assume the FICA tax rate is 6.2 percent for Social Security, with a limit of $113,700, and 1.45 percent for Medicare, applied to all earnings. The FUTA tax is 0.6 percent, with a limit of $7,000, and the SUTA tax is 5.4 percent, with a limit of $7,000. The employer's payroll tax expense entry will include a credit to
FICA Tax Payable for $217.00.
FICA Tax Payable for $267.75.
Federal Unemployment Tax Payable for $28.00.
State Unemployment Tax Payable for $189.00.
Federal Unemployment Tax Payable for $280.00.
10. There is no wage ceiling limit for which of the following:
FICA Medicare
SUTA
FUTA
FICA Social Security
11. Which of the following payroll taxes is the employee's responsibility?
Federal Income Tax, FICA SS & Medicare, FUTA
Federal Income Tax, FUTA, SUTA
Federal Income Tax, FICA SS & Medicare
FICA SS & Medicare, FUTA, SUTA
12. The W-2 form contains all of the following EXCEPT:
Wages
Employee Social Security Number
EIN
Number of Allowances
13. What are the two parts of FICA taxes?
Medical and Disability
Social Security and Disability
Social Security and Medicare
FUTA and SUTA
14. Employees may be paid hourly or salary based on the following:
Type of work performed
Period of time covered
The employer's discretion
a& b
15. The number assigned to employers by the IRS for use in submitting and reporting tax payments is:
EIN
TIPN
iPay
FUTA
16. The following payroll taxes that are strictly the employer's responsibility
SUTA
FUTA
FICA SS Employee Withheld
Federal Tax Withheld
a& b
17. What item is NOT used to calculate the federal income tax to be withheld by employers?
Total Earnings
W-2
Publication 15 (Circular E)
W-4
18. Rounding differences with the employee and employer amounts of FICA taxes are handled on the 941 report by:
Any differences are paid in or refunded as appropriate
Line 7 accommodates fraction differences, which accommodates rounding
When differences occur, the numbers are adjusted before the report to balance
None of the above
19. If a company is considered to have high employee turnover, what effect does the turnover have on the Payroll Tax expenses for the business?
Increases payroll tax expenses
Decreases payroll tax expenses
Would not have any effect
May increase or decrease payroll tax expenses depending on the time of the year.
20. The Social Security Act of 1935 was originally enacted to provide
Benefits for Spouses
Benefits for Minor Children
Benefits for Retired Workers
Disability Insurance
21. The 941 employer's tax payment to the IRS consists of
Employee's FICA Withheld
Employer's matching FICA
Employee's federal income tax withheld
a& b
All of the above
22. The entry to record the payroll tax expense includes all of the following except
Federal Unemployment Tax Payable.
FICA Tax Payable.
Employees' Federal Income Tax Payable.
State Unemployment Tax Payable.
None of these are correct.
23. The total amount of employee compensation before deductions are taken out is referred to as
gross pay.
net pay.
compensation after withholdings.
take-home pay.
merit pay.
24. A debit to the Payroll Tax Expense account means:
The employer's payroll taxes have increased
The employer's payroll taxes have decreased
Both the employer's and the employee's payroll taxes have increased
The employer's and employee's payroll taxes have not changed
24. Which of the following payroll taxes do employers pay on employees?
SUTA
FUTA
FICA
All of these
None of these