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Chapters 7-11: Midterm #2 (Part 1) Flashcards | StudBud
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Chapters 7-11: Midterm #2 (Part 1)
Chapters 7-11: Midterm #2 (Part 1)
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Answers
1
What is the formula for Net Pay?
SOME taxes and deductions - Gross Pay
Gross Pay – ALL taxes and deductions
ALL taxes and deduction - Gross Pay
Gross Pay - SOME taxes and deductions
2
What is the amount of funds that are actually deposited into the employee’s bank account?
Cash
Liquid Funds
Pennies in my pocket
Net Pay
3
The petty cash record is a journal of original entry (entries are posted from it to the general ledger account)
True
False
4
A payroll register is a multi-column form used to assemble the data required at the end of each payroll period
True
False
5
What is the third step in preparing a check?
Enter the date, payee name, and amount on the check
Sign the check over to the bank
Sign the check
Sign the date
6
Cash/Net Pay increases on the debit side
True
False
7
Employer payroll taxes are deducted from the employee’s pay
True
False
8
The primary purpose of a bank reconciliation is to detect and correct errors made by the bank in its records
False
True
9
The form 941 tax deposit includes what type of taxes withheld from the employee and paid by the employer?
Federal income tax and Social Security and Medicare taxes
Social Security and Medicare taxes and SUTA tax
Federal income tax and FUTA tax
FUTA tax and SUTA tax
10
Which of these is subtracted from the ending checkbook balance?
Note Collection
Deposits in Transit
Service Charges
Outstanding Checks
11
What is the Electronic Federal Tax Payment System?
A formal funds transfer system for making federal tax deposit
An electronic funds transfer system for making federal tax deposit
EETPS
EFTPS
12
The payroll register is a key source of information for computing employer payroll tax
True
False
13
The Medicare Tax Payable is a liability and increases on the credit side
False
True
14
The bank service charge requires a journal entry to record its effects on the cash account
False
True
15
The Employee Federal Income Tax Payable increases on the credit side
True
False
16
The Social Security Tax Payable is a liability and increases on the debit side
True
False
17
Self-employment income is the net income of a trade or business owned and run by and individual
True
False
18
What are three parts to every check?
Drawer
Payer
Drawee
Payee
19
What is the Employee Federal Income Tax Payable?
Money the employee will need to pay to the gov on behalf of the employer
Money the employer will need to pay to the gov on behalf of the employee
The 6.2% the employee has to pay to the government
The 1.45% the employee has to pay to the government
20
What is Workers’ compensation insurance?
Insurance for employees who suffer a job-related illness or injury
Insurance for employers who suffer a job-related illness or injury
Carried by employee
Carried by employer
21
To establish a petty cash fund, which outcome is debited?
Miscellaneous Expense
Revenue
Cash
Petty Cash
22
What is Net Pay in Cash?
Net Pay but just in cash form
The amount that the employee is actually withdrawing in their bank account
The amount that the employee is actually receiving in their bank account
The amount that the employer is actually receiving in their bank account
23
Wages and Salaries Expense increases on the credit side
False
True
24
What is the formula for Social Security Tax?
Gross Pay/1.45% (or 0.0145)
Gross Pay/6.2% (or 0.062)
Gross Pay x 6.2% (or 0.062)
Gross Pay x 1.45% (or 0.0145)
25
Compensation for skilled or unskilled labor expressed in terms of hours, weeks, or units is called salary
True
False
26
Which of these could be added to the ending checkbook balance?
Service Charges
Outstanding Check
Checkbook Errors
NSF Check
27
The FUTA tax is levied on by the employees
True
False
28
What is the Social Security Tax Payable?
The 6.2% the employee has to pay to the government
The 1.45% the employee has to pay to the government);
the 4.20% the employee has to pay to the government);
The 1.69% the employee has to pay to the government);
29
The Health Insurance Premium Payable is an asset
True
False
30
What is the formula for the Social Security Tax Amount?
Gross Wages x 6.2% (or 0.062)
Gross Wages x 1.45% (or 0.0145)
31
What is the formula for the Medicare Tax Amount?
Gross Wages x 6.2% (or 0.062)
Gross Wages x 1.45% (or 0.0145)
32
Cash transactions are allowed even until time taxes are paid to IRS
True
False
33
What is the Medicare Tax Payable?
The 1.5% the employee has to pay to the government
The 1.45% the employee has to pay to the government
The 6.2% the employee has to pay to the government
The 1.35% the employee has to pay to the government
34
The W-4 must be completed by the employer and given to the employee by January 31
False
True
35
Workers’ compensation provides insurance for employees who:
Are unemployed due to a layoff
Are underemployed and need additional compensation
Suffer a job-related illness or injury
Are unemployed due to a plant closing
36
The general ledger accounts used to record the employer’s Social Security, Medicare, FUTA and SUTA taxes are classified:
Assets
Expenses
Owner's Equity
Liabilities
37
What is Self-employment tax?
At triple the Social Security and Medicare rates
A tax on the earnings of an individual
At double the Social Security and Medicare rates
A tax on the earnings of a self-employed person
38
What is FUTA?
Federal Employment Tax
Federal Unemployment Tax
Tax levied on employers to raise funds to administer the federal/state tax
Used to administer the federal/state unemployment compensation program
39
What is NOT a factor that determines the amount of federal income tax to be withheld from an employee’s gross pay?
Martial Status
Age of Employee
Total Earnings
Number of withholding allowances claimed
40
What is the total cost of Joyce Lee to her employer?
$32,295
$30,420
$32,715
$30,000
41
What is the formula for SUTA?
SUTA wages x 6.9% (or 0.069)
SUTA wages x 6.4% (or 0.064)
SUTA wages x 5.4% (or 0.054)
SUTA wages x 5.3% (or 0.053)
42
An employee’s total earnings is called gross pay
False
True
43
What is the formula for FUTA?
FUTA wages x 0.9% (or 0.009)
FUTA wages x 0.4% (or 0.004)
FUTA wages x 0.6% (or 0.006)
FUTA wages x 0.7% (or 0.007)
44
NSF checks are
subtracted
from the bank’s ending balance on the bank reconciliation
False
True
45
Government Laws and regulations regarding payroll are more complex for employees than for independent contractors
True
False
46
What is Self-employment income?
The gross pay of a trade or business run by and individual
The net income of a trade or business run by and individual
The net pay of a trade or business run by and individual
The gross income of a trade or business run by and individual
47
A separate record of each employee’s earnings is can a(n):
Payroll Register
Earnings Statement
W-4
Employee Earnings Record
48
What are Employer FICA taxes?
Taxes levied on the employee at different rates
Taxes levied on the employer at the same rates
& on different earnings bases as the employee
& on the same earnings bases as the employee
49
What is the Experience-rating system?
A system to encourage employers to provide regular unemployment to workers
A system to encourage employers to provide regular employment to employers
A system to discourage employers to provide regular employment to workers
A system to encourage employers to provide regular employment to workers
50
Jack Smith is married, has a spouse who is not employed & has five dependent children. How many withholding allowances?
7
6
8
5
51
The payroll taxes expense increase on the debit side
True
False
52
What is the Health Insurance Premium Payable?
The money the employee is paying for their car insurance
The money the employer is paying for the employee's health insurance
The money the employee is paying for their health insurance
The money the employer is paying for their health insurance
53
Journal entry at the end of the year that recognizes a premium owed under workers’ compensation insurance will include:
Debit to Workers’ Compensation Insurance Payable
Debit to Cash
Debit to Workers’ Compensation Insurance Expense
Credit to Workers’ Compensation Insurance Expense
54
What is the formula for Medicare Tax?
Gross Pay x 1.35% (or 0.0135)
Gross Pay x 1.45% (or 0.0145)
Gross Pay - 1.45% (or 0.0145)
Gross Pay/1.45% (or 0.0145)
55
The Employee Federal Income Tax Payable is a liability
False
True
56
When the cash is short and over account has a debit balance at the end of the month, it is considered
:
Revenue
An Asset
A Liability
An Expense
57
Unrecorded ATM withdrawals are
added
to the checkbook balance on the bank reconciliation
False
True
58
What is SUTA?
State Unemployment Tax
Tax levied on employers to raise funds to pay unemployment benefits
The net income of a trade or business run by and individual
Federal Unemployment Tax
59
Social Security Tax Payable and Medicare Tax Payable are classified as:
Earnings Statement
Owner's Equity
Assets
Liabilities
60
What is the second step in preparing a check?
Enter the date, payee name, and amount on the check
Complete pay of the order
Sign the check
Enter the date, payer name, and amount on the check
61
An independent contractor is one who works under the control and direction of an employer
True
False
62
What is the first step in preparing a check?
Complete the check stub or register
Enter the date, payee name, and amount on the check
Sign the check
Complete the deposit ticket
63
Which of these is added to the ending bank statement balance?
Outstanding Checks
Service Charges
Deposits in Transit
Checkbook Errors
64
Both SUTA and FUTA Tax Payables are assets
True
False
