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Chapter Quiz
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1
The total FICA tax rate for self-employed individuals is 15.3%
A)True
B)False
2
There is a ceiling on each employee's annual earnings that are subject to federal income taxes.
A)True
B)False
3
Only the first $7,000 of each employees annual earnings is subject to federal unemployment tax.
A)True
B)False
4
The source of information to complete the W-2 form is the employee's individual earnings record.
A)True
B)False
5
Companies furnish their employees with W-4 forms quarterly.
A)True
B)False
6
Workers' compensation provides benefits for employees who are injured on the job
A)True
B)False
7
The journal entry to record Payroll Tax Expense includes a debit to the Employer FICA-Social Security Taxes Payable account.
A)True
B)False
8
Payments for state taxes are submitted to the state agency involved.
A)True
B)False
9
The Payroll Tax Expense account is used to record the employer's state unemployment tax, federal unemployment tax, and federal income tax.
A)True
B)False
10
Most employers are required to withhold federal unemployment taxes from employees' earnings.
A)True
B)False
11
The journal entry to record the deposit of social security and Medicare taxes owed for the period includes a debit to the Employer FICA-Social Security Taxes Payable account and a credit to the Cash account.
A)True
B)False
12
Federal Form 941 is filed annually by the employer.
A)True
B)False
13
Federal Form 940 is filed annually by the employer.
A)True
B)False
14
To record the payment of the annual premium for workers' compensation insurance, a company's journal entry would include a debit to the Workers' Compensation Insurance Expense account.
A)True
B)False
15
The Federal Insurance Contribution Act requires employers to pay the same amounts as its employees do for Federal income tax.
A)True
B)False
16
Generally employers are required to withhold from employees for
A)Federal income tax.
B)Medicare.
C)Social Security.
D)all of these.
E)none of these.
17
Lester earns $12 per hour. He worked 40 hours this pay period. If the FUTA tax rate is .8% what amount of FUTA tax should be withheld from his paycheck
A)$534.
B)$480.
C)$774.
D)$516.
E)none of these.
18
Employers pay the following tax(es):
A)FICA (employee and employer).
B)FUTA (employer only).
C)SUTA (employer and employee depending upon the state).
D)all of these.
E)none of these.
19
Employers are generally required to contribute payroll taxes consisting of the following:
A)federal unemployment
B)state unemployment
C)Social Security/Medicare
D)all of these
E)none of these
20
Which of the following payroll taxes has a maximum of earnings subject to the tax?
A)state unemployment tax
B)FICA-Social Security
C)federal unemployment tax
D)all of these
E)none of these
21
Which of the following items is considered to be a cost of having an employee?
A)federal unemployment
B)Social Security
C)Medicare
D)all of these
E)none of these
22
The Employer's Annual Federal Unemployment Tax Return is called
A)Form W-2.
B)Form 941.
C)Form W-3.
D)Form W-4.
E)none of these.
23
Cho has cumulative earnings of $107,000 and earns $6,800 during the current pay period. If the FICA rate is 6.2 percent for Social Security, with a limit of $106,800, and 1.45 percent for Medicare, applied to all earnings, the total FICA tax to be withheld is
A)$80.60.
B)$98.60.
C)$18.85.
D)$520.20.
E)none of these.
24
The entry to record the payroll tax expense includes all EXCEPT the following:
A)Federal Unemployment Tax Payable
B)FICA Tax Payable
C)Employees' Federal Income Tax Payable
D)State Unemployment Tax Payable
E)none of these
25
Born has $6,800 cumulative earnings during the calendar year and earned $950 during the current pay period. If the state unemployment tax is 5.4 percent of the first $7,000, the federal unemployment tax is 0.8 percent of the first $7,000, the FICA Social Security tax is 6.2 percent of the first $106,800, and FICA Medicare tax is 1.45 percent on all earnings, the amounts placed in the taxable earnings columns of the payroll register are
A)state unemployment, $200; federal unemployment, $200; Social Security, $200; Medicare, $200.
B)state unemployment, $0; federal unemployment, $0; Social Security, $850; Medicare, $850.
C)state unemployment, $950; federal unemployment, $950; Social Security, $950; Medicare, $950.
D)state unemployment, $200; federal unemployment, $200; Social Security, $950; Medicare, $950.
E)none of these
26
Lien has cumulative earnings of $6,750 and earned $745 during the current pay period. If the FUTA tax rate is 0.8 percent, with a ceiling of $7,000, the employer payroll tax expense for FUTA is
A)$2.00.
B)$0.
C)$54.00.
D)$5.96.
E)none of these.
27
Form 941 asks which of the following questions?
A)total wages and tips subject to federal tax withholding
B)total number of employees during the quarter
C)total federal income tax withheld
D)all of these
E)none of these
28
Form 941 requires reporting of the following taxes:
A)FUTA and SUTA
B)FICA and Federal Income Taxes
C)FICA, FUTA, and SUTA
D)FICA and FUTA
E)none of these
29
An employer's deposit of federal taxes includes
A)employer's share of FICA taxes (Social Security and Medicare).
B)employees' federal income taxes withheld.
C)employees' share of FICA taxes withheld (Social Security and Medicare).
D)all of these.
E)none of these.
30
Form 8109-b, the Federal Tax Deposit Coupon, is used to deposit which of the following taxes
A)Form 941 Taxes (social security and Medicare)
B)Union Dues withheld
C)State unemployment taxes
D)State income taxes withheld from paychecks
E)Form 8109 is used to record all of the above taxes.





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