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Exam 8: Payroll Accounting: Employee Earnings and Deductions

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Question 41

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The earnings base, against which the FICA tax is applied, and the tax rate have been changed several times since the law was first enacted and can be changed by Congress at any time in the future.

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Question 42

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Journalize the entry for Hot Rod Service using the following data from the payroll register:

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Question 43

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An employee's total earnings is referred to as gross pay.

Under federal law, employers are required to withhold a percentage of the employees' wages for pensions.

Match the terms with the definitions. -Employers determine the amount to withhold from an employee's gross pay for a specific time period from the appropriate wage-bracket table provided by the Internal Revenue Service.

The Fair Labor Standards Act provides that all employees covered by the act must be paid one and one-half times the regular rate for all hours worked over 40 per week.

The outputs from a manual or an electronic payroll accounting system include all of the following EXCEPT

Joel Trump is paid one and one-half times the regular hourly rate for all hours worked in excess of 40 hours per week and double time for work on Sunday. Trump's regular rate is $8 per hour. During the week ended October 10, he worked 9 hours each day from Monday through Friday, 6 hours on Saturday, and 4 hours on Sunday. Trump's total earnings for the week ended October 10 are

Government laws and regulations regarding payroll are much more complex for employees than for independent contractors.

Deductions for U.S. savings bond purchases, pension plan payments, and Social Security taxes are considered voluntary deductions.

The payroll register for the week ended April 15 for Ultimate Tanning Spa indicates gross earnings of $4,000 and total deductions of $1,200. The journal entry for the payroll for this week would include which of the following credit amounts to Cash?

An electronic payroll system is one in which data is processed using computers equipped with payroll software.

Base and rate changes in payroll taxes such as FICA affect the accounting principles and procedures for payroll.

Employers usually prepare which of the following types of payroll records?

The employee's earnings record is a summary of the earnings of all employees for each pay period.

An independent contractor performs a service for a fee and works under the control and direction of the company paying for the service.

Every individual who performs services for a business is considered to be an employee.

Match the terms with the definitions. -​Exempts a specific dollar amount of an employee's gross pay from federal income tax withholding.

Companies must accumulate payroll data both for the business as a whole and for each employee.

The Medicare tax rate is subject to a maximum amount.