Questions and Answers
In each pay period, the payroll information of each employee is recorded on each employee earnings record.
True
The payroll register and employee earning records provide all the payroll information needed to prepare a payroll.
True
The source document for payment of a payroll is the time card.
False
Employee payroll taxes are business expenses.
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The employer Social Security tax rate is not the same as the employee Social Security tax rate.
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Federal unemployment insurance laws require that employers and employees pay taxes for unemployment compensation.
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The transaction to record employer payroll taxes expense is journalized at the end of the quarter.
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Each employer is required by law to periodically report the payroll taxes withheld from employee salaries.
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The timing of payment of tax payments is based on the amount owed.
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FUTA is usually paid each month.
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In the journal entry for a payroll, the amount debited to salary expense is the total of the net pay.
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The tax base for Medicare is usually the same as Social Security.
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Some employers must deposit payments for withheld employees' federal income tax and Social Security and Medicare on the next banking day.
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Each employer who withholds income tax and Social Security and Medicare tax from employee salaries must furnish each employee with a quarterly statement.
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Until the amounts withheld are recorded, they are considered ______.
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Journalize a semimonthly payroll less deductions for employee income tax, Social Security, Medicare, and savings bonds is a credit to cash and the liability accounts and a debit to [blank].
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The total earnings subject to federal unemployment tax is referred to as [blank].
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Each employer must file a federal tax return showing the federal income tax and Social Security and Medicare taxes due to the government [blank].
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Employers are required to furnish each employee with an annual statement of earnings and withholding before [blank].
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The source document for paying employee income tax and Social Security and Medicare tax is a [blank].
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Employers are required to pay state unemployment taxes [blank].
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The source document for paying state unemployment tax is a [blank].
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A state tax used to pay benefits to unemployed workers is called [blank].
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Study Notes
Payroll Information
- Each pay period, payroll details for every employee are recorded on individual earnings records.
- Payroll registers and employee earning records contain all necessary payroll data for processing payroll.
Payroll Documentation
- The time card is not the source document for payroll payment.
- Payments for payroll taxes withheld from employees must be reported by employers periodically, as required by law.
Payroll Taxes
- Employee payroll taxes are classified as business expenses.
- The Social Security tax rate for employers is the same as for employees.
- Federal unemployment insurance laws mandate contributions from employers, but not employees.
Tax Reporting and Payments
- Employer payroll tax expenses are not journalized at the end of each quarter.
- The timing for tax payments correlates with the amount owed, with certain employers needing to deposit payments promptly for withheld taxes.
- A federal tax return showcasing the federal income tax, Social Security, and Medicare taxes due must be filed quarterly by employers.
Earnings and Statements
- Employers must provide an annual statement of earnings and withholding to each employee by January 31 of the following year.
- Accumulated employee earnings and new earnings subject to unemployment tax can vary.
Tax Base and Liability
- The Medicare tax base differs from the Social Security tax base.
- Until payroll amounts withheld are recorded, they are considered liabilities.
Payroll Calculation
- The journal entry for a semimonthly payroll reflects total deductions for employee income tax, Social Security, Medicare, and savings bonds, impacting cash and liability accounts with salary expense as a debit.
Unemployment Tax Specifics
- The terminology for earnings subject to federal unemployment tax is defined as unemployment taxable earnings.
- Employers are responsible for state unemployment taxes during the month following each calendar year.
- The source document for state unemployment tax payments is a check.
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Description
This quiz covers essential concepts related to payroll management, including payroll documentation, payroll taxes, and tax reporting obligations. Understand how payroll details are recorded and the implications of payroll tax laws for employers and employees.
