Question 1

The total payroll cost to an employer of an employee who has gross earnings of $78,000 is

Accepted Answer

A)  $78,000 plus 30 percent. 
B)  less than $78,000. 
C)  exactly $78,000. 
D)  more than $78,000. 
A)  $78,000 plus 30 percent. 
B)  less than $78,000. 
C)  exactly $78,000. 
D)  more than $78,000.

Question 2

Any Federal Reserve Bank or other authorized commercial bank may issue an Employer Identification Number (EIN).

Accepted Answer

A) True 
 B)False

Question 3

Match the terms with the definitions.
-Taxes levied on employers at the same rates and on the same earnings bases as the employee FICA taxes.

Accepted Answer

A) Electronic Federal Tax Payment System (EFTPS) 
B) employer FICA taxes 
C) Employer Identification Number (EIN) 
D) Form W-2 
E) Form W-3
F)Form 940
G)Form 941
H)FUTA (Federal Unemployment Tax Act) tax
I)merit-rating system
J)self-employment income
K)self-employment tax
L)SUTA (state unemployment tax) tax
M)workers' compensation insurance 
A) Electronic Federal Tax Payment System (EFTPS) 
B) employer FICA taxes 
C) Employer Identification Number (EIN) 
D) Form W-2 
E) Form W-3
F)Form 940
G)Form 941
H)FUTA (Federal Unemployment Tax Act) tax
I)merit-rating system
J)self-employment income
K)self-employment tax
L)SUTA (state unemployment tax) tax
M)workers' compensation insurance

Question 4

Match the terms with the definitions.
-A system to encourage employers to provide regular employment to workers.

Accepted Answer

A) Electronic Federal Tax Payment System (EFTPS) 
B) employer FICA taxes 
C) Employer Identification Number (EIN) 
D) Form W-2 
E) Form W-3
F)Form 940
G)Form 941
H)FUTA (Federal Unemployment Tax Act) tax
I)merit-rating system
J)self-employment income
K)self-employment tax
L)SUTA (state unemployment tax) tax
M)workers' compensation insurance 
A) Electronic Federal Tax Payment System (EFTPS) 
B) employer FICA taxes 
C) Employer Identification Number (EIN) 
D) Form W-2 
E) Form W-3
F)Form 940
G)Form 941
H)FUTA (Federal Unemployment Tax Act) tax
I)merit-rating system
J)self-employment income
K)self-employment tax
L)SUTA (state unemployment tax) tax
M)workers' compensation insurance

Question 5

A self-employment tax is a contribution to the

Accepted Answer

A)  charities of the individual owner's choice. 
B)  SUTA programs. 
C)  FUTA programs. 
D)  Social Security and Medicare programs. 
A)  charities of the individual owner's choice. 
B)  SUTA programs. 
C)  FUTA programs. 
D)  Social Security and Medicare programs.

Question 6

Since there is no maximum earnings on the Medicare component of the Social Security tax, the Medicare tax rate of 1.45% is applied to total earnings.

Accepted Answer

A) True 
 B)False

Question 7

Form 941, Employer's Quarterly Federal Tax Return, must be filed with the IRS at the end of the month following each calendar quarter.

Accepted Answer

A) True 
 B)False

Question 8

The due date for payroll taxes is the last day of each fiscal quarter: March 31, June 30, September 30, and December 31.

Accepted Answer

A) True 
 B)False

Question 9

The employer FICA tax is levied on employers at the same rate and on the same earnings bases as the employee FICA tax.

Accepted Answer

A) True 
 B)False

Question 10

Match the terms with the definitions.
-Provides insurance for employees who suffer a job-related illness or injury.

Accepted Answer

A) Electronic Federal Tax Payment System (EFTPS) 
B) employer FICA taxes 
C) Employer Identification Number (EIN) 
D) Form W-2 
E) Form W-3
F)Form 940
G)Form 941
H)FUTA (Federal Unemployment Tax Act) tax
I)merit-rating system
J)self-employment income
K)self-employment tax
L)SUTA (state unemployment tax) tax
M)workers' compensation insurance 
A) Electronic Federal Tax Payment System (EFTPS) 
B) employer FICA taxes 
C) Employer Identification Number (EIN) 
D) Form W-2 
E) Form W-3
F)Form 940
G)Form 941
H)FUTA (Federal Unemployment Tax Act) tax
I)merit-rating system
J)self-employment income
K)self-employment tax
L)SUTA (state unemployment tax) tax
M)workers' compensation insurance

Question 11

Self-employment tax is a contribution to the unemployment compensation program.

Accepted Answer

A) True 
 B)False

Question 12

The Social Security, Medicare, and FUTA tax accounts are debited when the taxes are actually paid to the IRS.

Accepted Answer

A) True 
 B)False

Question 13

Persons earning self-employment income of $400 or more must pay a self-employment tax.

Accepted Answer

A) True 
 B)False

Question 14

After estimating its payroll for the year, an employer usually pays workers' compensation insurance

Accepted Answer

A)  at the beginning of the year. 
B)  monthly. 
C)  quarterly. 
D)  at the end of the year. 
A)  at the beginning of the year. 
B)  monthly. 
C)  quarterly. 
D)  at the end of the year.

Question 15

Mark Turney owns Creative Corners. He does his banking at United Federal Bank (UFB) in Tucson, Arizona. The amounts in his general ledger for payroll taxes and the employee's withholding of Social Security, Medicare, and federal income tax as of April 15 of the current year show the following: Social Security tax payable (employer and employee), $3,020; Medicare tax payable (employer and employee), $734; FUTA tax payable, $84; SUTA tax payable, $414; and Employees income tax payable, $4,622. Journalize the payment of the Form 941 deposit to UFB and the payment of the SUTA tax to the State of Arizona as of April 15, 20--.

Accepted Answer

The answer of Mark Turney owns Creative Corners. He does...

Question 16

When all taxes have been paid, the Social Security Tax Payable account will have

Accepted Answer

A)  a debit balance. 
B)  a credit balance. 
C)  a zero balance. 
D)  equal debit and credit balances. 
A)  a debit balance. 
B)  a credit balance. 
C)  a zero balance. 
D)  equal debit and credit balances.

Question 17

If an employer wishes, the FUTA tax may be deducted from employees' earnings.

Accepted Answer

A) True 
 B)False

Question 18

The rules by which employers must deposit Social Security and Medicare taxes can be found in the

Accepted Answer

A)  Circular E--Employer's Tax Guide. 
B)  Circle K Tax Guide. 
C)  Federal Reserve Bank Tax Guide. 
D)  state tax guide. 
A)  Circular E--Employer's Tax Guide. 
B)  Circle K Tax Guide. 
C)  Federal Reserve Bank Tax Guide. 
D)  state tax guide.

Question 19

One-half of the self-employment tax is really a personal expense to the owner of the business.

Accepted Answer

A) True 
 B)False

Question 20

The amount of employers' Medicare taxes is computed by multiplying total earnings by 1.45%.

Accepted Answer

A) True 
 B)False

Exam 9: Payroll Accounting: Employer Taxes and Reports

The total payroll cost to an employer of an employee who has gross earnings of $78,000 is

Any Federal Reserve Bank or other authorized commercial bank may issue an Employer Identification Number (EIN).

Match the terms with the definitions. -Taxes levied on employers at the same rates and on the same earnings bases as the employee FICA taxes.

Match the terms with the definitions. -A system to encourage employers to provide regular employment to workers.

A self-employment tax is a contribution to the

Since there is no maximum earnings on the Medicare component of the Social Security tax, the Medicare tax rate of 1.45% is applied to total earnings.

Form 941, Employer's Quarterly Federal Tax Return, must be filed with the IRS at the end of the month following each calendar quarter.

The due date for payroll taxes is the last day of each fiscal quarter: March 31, June 30, September 30, and December 31.

The employer FICA tax is levied on employers at the same rate and on the same earnings bases as the employee FICA tax.

Match the terms with the definitions. -Provides insurance for employees who suffer a job-related illness or injury.

Self-employment tax is a contribution to the unemployment compensation program.

The Social Security, Medicare, and FUTA tax accounts are debited when the taxes are actually paid to the IRS.

Persons earning self-employment income of $400 or more must pay a self-employment tax.

After estimating its payroll for the year, an employer usually pays workers' compensation insurance

When all taxes have been paid, the Social Security Tax Payable account will have

If an employer wishes, the FUTA tax may be deducted from employees' earnings.

The rules by which employers must deposit Social Security and Medicare taxes can be found in the

One-half of the self-employment tax is really a personal expense to the owner of the business.

The amount of employers' Medicare taxes is computed by multiplying total earnings by 1.45%.

Introduction to Accounting

Analyzing Transactions: the Accounting Equation

The Double-Entry Framework

Journalizing and Posting Transactions

Adjusting Entries and the Work Sheet

Financial Statements and the Closing Process

Accounting for Cash

Payroll Accounting: Employee Earnings and Deductions

Accounting for Sales and Cash Receipts

Accounting for Purchases and Cash Payments

Special Journals

Accounting for Merchandise Inventory

Adjustments and the Work Sheet for a Merchandising Business

Financial Statements and Year-End Accounting for a Merchandising Business

Accounting for Accounts Receivable

Accounting for Notes and Interest

Accounting for Long-Term Assets

Accounting for Partnerships

Corporations: Organization and Capital Stocks

Corporations: Earnings, Taxes, Distributions, and the Retained Earnings Statement

Corporations: Bonds

Statement of Cash Flows

Analysis of Financial Statements

Departmental Accounting

Manufacturing Accounting: The Job Order Cost System

Manufacturing Accounting: The Work Sheet and Financial Statements

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