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| 1 | |
An appliance repair person who decides his own hours is an example of an independent contractor. |
| | A) | True |
| | B) | False |
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| 2 | |
Employees who are paid an hourly wage are not entitled to premium pay for overtime. |
| | A) | True |
| | B) | False |
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| 3 | |
There is a ceiling on each employee's total earnings that are subject to federal income tax. |
| | A) | True |
| | B) | False |
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| 4 | |
Social Security taxes and Medicare taxes are paid only by the employer. |
| | A) | True |
| | B) | False |
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| 5 | |
A person who works for compensation under the direction and control of the employee is called an employer. |
| | A) | True |
| | B) | False |
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| 6 | |
Assume that Riley's cumulative earnings are $67,500. If the Social Security tax is 6.2 percent of the first $106,800 and the Medicare tax is 1.45 percent of all earnings, then Riley's deduction for total FICA taxes on his gross earnings for the entire year would be $5,163.75. |
| | A) | True |
| | B) | False |
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| 7 | |
There is no limit on each employee's total earnings that are subject to Medicare tax. |
| | A) | True |
| | B) | False |
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| 8 | |
If employees are paid by checks from the firm's regular bank account, the Salaries Payable account is necessary in the payroll entry. |
| | A) | True |
| | B) | False |
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| 9 | |
Assuming that a payroll bank account is used, when the payroll is initially recorded, Salaries Payable is credited for total take-home pay. |
| | A) | True |
| | B) | False |
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| 10 | |
Employees' individual earnings records are not needed for salaried workers. |
| | A) | True |
| | B) | False |
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| 11 | |
Persons who operate their own businesses as sole proprietors or independent contractors pay self-employment tax. |
| | A) | True |
| | B) | False |
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| 12 | |
Net Pay - All deductions = Gross pay |
| | A) | True |
| | B) | False |
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| 13 | |
Assume that Rogers's cumulative earnings are $108,000. If the Social Security tax is 6.2 percent of the first $106,800 and the Medicare tax is 1.45 percent of all earnings, then Riley's deduction for total FICA taxes on his gross earnings for the entire year would be $8,187.60. |
| | A) | True |
| | B) | False |
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| 14 | |
An employee earned $90,000 during the year. FICA tax for social security is 6.2% and FICA tax for Medicare is 1.45%. The employee's share of FICA taxes is $5,580 |
| | A) | True |
| | B) | False |
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| 15 | |
The withholding table an employer uses to figure the amount of federal income tax to withhold is called the Circular E and is published by the IRS . |
| | A) | True |
| | B) | False |
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| 16 | |
A person who performs a service for a fixed amount and is not under the specific direction of the party being served is called |
| | A) | an employee. |
| | B) | an employer. |
| | C) | an independent contractor. |
| | D) | all of these. |
| | E) | none of these. |
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| 17 | |
Types of compensation that an employee might receive include |
| | A) | a bonus. |
| | B) | meals. |
| | C) | a commission. |
| | D) | profit sharing. |
| | E) | all of these. |
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| 18 | |
An employer may withhold portions of an employee's total earnings for |
| | A) | group insurance. |
| | B) | credit union payments. |
| | C) | charitable contributions. |
| | D) | all of these. |
| | E) | none of these. |
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| 19 | |
The record maintained for each employee, listing the current data on that employee's earnings for the period, deductions, and accumulated earnings, is |
| | A) | the employee's withholding allowance (W-4) certificate. |
| | B) | the employee's wage and tax statement. |
| | C) | the payroll register. |
| | D) | the employee's individual earnings record. |
| | E) | none of these. |
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| 20 | |
Regarding the federal income tax withholding tables, the amount of each employee's earnings withheld is affected by |
| | A) | the age of the employee. |
| | B) | the number of years working for the company. |
| | C) | the number of exemptions claimed. |
| | D) | all of these. |
| | E) | none of these. |
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| 21 | |
The structure of the payroll entry to record the payroll is |
| | A) | debit Salaries Payable, credit Cash. |
| | B) | debit Salaries Expense, credit each employee deduction, credit Salaries Payable. |
| | C) | debit Salaries Payable, credit each employee deduction. |
| | D) | debit Salaries Expense, credit each employee deduction. |
| | E) | none of these. |
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| 22 | |
The employer records the amount of federal income tax withheld as |
| | A) | an expense. |
| | B) | a liability. |
| | C) | an asset. |
| | D) | payroll tax expense. |
| | E) | none of these. |
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| 23 | |
The source of information for the employee's individual earnings record is |
| | A) | Form W-4. |
| | B) | the payroll register. |
| | C) | Form W-2. |
| | D) | employees' time cards. |
| | E) | none of these. |
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| 24 | |
To examine in detail the weekly payroll figures of employees, one would look at |
| | A) | Form W-4. |
| | B) | time cards. |
| | C) | the employee's individual earnings record. |
| | D) | the payroll register. |
| | E) | none of these. |
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| 25 | |
In a payroll entry, a credit to Union Dues Payable indicates |
| | A) | that a customer is paying a bill owed to the company. |
| | B) | that an employee is a member of the company union. |
| | C) | that the employer is paying a bonus to the employee. |
| | D) | that a mistake has been made in an employee's paycheck. |
| | E) | none of these. |
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| 26 | |
For which of the following taxes is there no ceiling on the amount of annual earnings subject to the tax? |
| | A) | FICA tax |
| | B) | federal income tax |
| | C) | federal unemployment compensation tax |
| | D) | all of these |
| | E) | none of these |
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| 27 | |
The employee's individual earnings record includes |
| | A) | the date the employee was hired. |
| | B) | gross payroll for the pay period for all employees. |
| | C) | net payroll for the pay period for all employees. |
| | D) | the amount of federal unemployment taxes for the pay period. |
| | E) | none of these. |
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| 28 | |
The Employer's Tax Guide |
| | A) | is available from the Internal Revenue Service. |
| | B) | lists rules for depositing federal income, Social Security, and Medicare taxes. |
| | C) | contains withholding tables for federal income, Social Security, and Medicare taxes. |
| | D) | is all of the above. |
| | E) | is none of these. |
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| 29 | |
Barbara receives an annual salary of $25,500 plus a 5 percent commission on all sales during the year in excess of $100,000. Her sales for the year total $210,000. Her total earnings amount to |
| | A) | $26,775. |
| | B) | $31,000. |
| | C) | $30,500. |
| | D) | $36,000. |
| | E) | none of these. |
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| 30 | |
Elliot's employer pays time-and-a-half for all hours worked in excess of 8 hours per day and double time for all hours worked on Sundays. Elliot's regular hourly rate is $9 per hour. During the week, Elliot worked the following hours: Monday, 8; Tuesday, 8; Wednesday, 9; Thursday, 10; Friday, 8; Sunday, 6. Total gross wages are |
| | A) | $481.50. |
| | B) | $661.50. |
| | C) | $441.00. |
| | D) | $508.50 |
| | E) | none of these. |
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