Question 1

The law that governs overtime earnings is called:

Accepted Answer

A)  State Wage Control Act. 
B)  Federal Wage and Hour Law. 
C)  Fair Labor Standards Act. 
D)  Both B and C are correct. 
A)  State Wage Control Act. 
B)  Federal Wage and Hour Law. 
C)  Fair Labor Standards Act. 
D)  Both B and C are correct.

Question 2

FICA taxes provide funding to the government to pay:

Accepted Answer

A)  monthly retirement benefits for persons over age 62. 
B)  medical benefits for persons over age 65. 
C)  benefits for persons who have become disabled. 
D)  All of the above are correct. 
A)  monthly retirement benefits for persons over age 62. 
B)  medical benefits for persons over age 65. 
C)  benefits for persons who have become disabled. 
D)  All of the above are correct.

Question 3

FICA (OASDI and Medicare) and unemployment taxes are similar in that they:

Accepted Answer

A)  are paid by the employee. 
B)  have the same maximum taxable wage base. 
C)  are a specified percent of federal income tax withholdings. 
D)  are payroll tax expenses of the employer. 
A)  are paid by the employee. 
B)  have the same maximum taxable wage base. 
C)  are a specified percent of federal income tax withholdings. 
D)  are payroll tax expenses of the employer.

Question 4

Regular earnings include hours of overtime pay earned during the weekend.

Accepted Answer

A) True 
 B)False

Question 5

The payroll information for a pay period is recorded in the general ledger.

Accepted Answer

A) True 
 B)False

Question 6

A maximum earnings limit is set for all FICA taxes.

Accepted Answer

A) True 
 B)False

Question 7

The CFC College Credit Card Services has a significant increase in business each spring due to a large increase in new applicants from graduating college students. Subsequently, each spring 40 temporary workers are hired for a 12-week period, working 40 hours per week at $10 per hour and then they are laid off. College's permanent employment total is 350 workers. Because of these yearly layoffs, College's state unemployment merit tax rate is 9%. If the number of layoffs could be reduced, the merit tax rate could be reduced to 4.1%.
As the payroll specialist for College, you have been asked to evaluate the following and determine the pros/cons of each decision:
1. Should College stop hiring temporary employees and ask its full-time workers to work overtime to handle the extra load?
2. Should College get its temporary employees from a temporary employment agency and therefore not be subject to the extra taxes?

Accepted Answer

1. Use regular employees on overtime bas

Question 8

Pam received $1,800 for working 40 hours. What was Pam's rate of pay per hour? (Round your answer to the nearest dollar.)

Accepted Answer

A)  $45 
B)  $72,000 
C)  $30 
D)  $1,800 
A)  $45 
B)  $72,000 
C)  $30 
D)  $1,800

Question 9

Net pay equals:

Accepted Answer

A)  gross pay less all deductions. 
B)  regular earnings + overtime earnings. 
C)  gross earnings less federal and state withholding tax. 
D)  net earnings + overtime earnings greater than the amount withheld from the employee. 
A)  gross pay less all deductions. 
B)  regular earnings + overtime earnings. 
C)  gross earnings less federal and state withholding tax. 
D)  net earnings + overtime earnings greater than the amount withheld from the employee.

Question 10

Given the following payroll items you are to identify whether they are the responsibility of the employer and/or the employee by placing an X in the appropriate column.
-

Accepted Answer

The answer of Given the following payroll items you are...

Question 11

Net pay is the same as:

Accepted Answer

A)  gross pay. 
B)  take-home pay. 
C)  before taxes pay. 
D)  pay before deductions. 
A)  gross pay. 
B)  take-home pay. 
C)  before taxes pay. 
D)  pay before deductions.

Question 12

All states charge a state income tax.

Accepted Answer

A) True 
 B)False

Question 13

For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, in Column 3 the financial statement on which the account balance is reported, and in Column 4 the nature of the account (permanent/temporary).
-

Accepted Answer

The answer of For each of the following, identify in...

Question 14

Generally, employers can take a credit against the FICA-Medicare tax for contributions paid into the state unemployment funds.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following would NOT typically be an employee payroll withholding?

Accepted Answer

A)  Federal unemployment taxes 
B)  Medical Insurance 
C)  State income tax 
D)  Social Security 
A)  Federal unemployment taxes 
B)  Medical Insurance 
C)  State income tax 
D)  Social Security

Question 16

Given the following payroll items you are to identify whether they are the responsibility of the employer and/or the employee by placing an X in the appropriate column.
-

Accepted Answer

The answer of Given the following payroll items you are...

Question 17

Joe's Tax Service has two types of employees, management and clerical support. The company estimates that it will pay the clerical support $510,000 next year and the managers $280,000. For every $100, the company pays $0.14 into the workers' compensation insurance. Calculate the amount of workers' compensation insurance.

Accepted Answer

A)  $1,106 
B)  $714 
C)  $392 
D)  None of the above is correct. 
A)  $1,106 
B)  $714 
C)  $392 
D)  None of the above is correct.

Question 18

From the following information, complete the chart for gross earnings for the week. Assume an overtime rate of time and a half over 40 hours.

Accepted Answer

The answer of From the following information, complete the chart...

Question 19

Vance Johnson works 44 hours as a coffee barista and earns $17 per hour. Compute her weekly pay assuming an overtime rate of 1.5.

Accepted Answer

A)  $748 
B)  $782 
C)  $816 
D)  $884 
A)  $748 
B)  $782 
C)  $816 
D)  $884

Question 20

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

Accepted Answer

The answer of From the following data, calculate the estimate...

Exam 7: Calculating Pay and Payroll Taxes: the Beginning of the Payroll Process

The law that governs overtime earnings is called:

FICA taxes provide funding to the government to pay:

FICA (OASDI and Medicare) and unemployment taxes are similar in that they:

Regular earnings include hours of overtime pay earned during the weekend.

The payroll information for a pay period is recorded in the general ledger.

A maximum earnings limit is set for all FICA taxes.

Pam received $1,800 for working 40 hours. What was Pam's rate of pay per hour? (Round your answer to the nearest dollar.)

Net pay equals:

Given the following payroll items you are to identify whether they are the responsibility of the employer and/or the employee by placing an X in the appropriate column. -

Net pay is the same as:

All states charge a state income tax.

For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, in Column 3 the financial statement on which the account balance is reported, and in Column 4 the nature of the account (permanent/temporary). -

Generally, employers can take a credit against the FICA-Medicare tax for contributions paid into the state unemployment funds.

Which of the following would NOT typically be an employee payroll withholding?

Given the following payroll items you are to identify whether they are the responsibility of the employer and/or the employee by placing an X in the appropriate column. -

From the following information, complete the chart for gross earnings for the week. Assume an overtime rate of time and a half over 40 hours.

Vance Johnson works 44 hours as a coffee barista and earns $17 per hour. Compute her weekly pay assuming an overtime rate of 1.5.

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

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Paying, Recording, and Reporting Payroll and Payroll Taxes:

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property, Plant, Equipment, and Intangible Assets

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values, Dividends, Treasury Stocks,

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

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