Accounting: Chapter 12 Test Review

salarythe money paid for employee services
pay periodthe period covered by a salary payment
payrollthe total amount earned by all employees for a pay period
total earningsthe total pay due for a pay period before deductions
payroll taxestaxes based on the payroll of a business
withholding allowancea deduction form total earnings for each person legally supported by a taxpayer, including the employee
social security taxA federal tax paid for old-age, survivors, and disability insurance
medicare taxa federal tax paid for hospital insurance
tax basethe maximum amount of earnings on which a tax is calculated
payroll registera business form used to record payroll information
net paythe total earnings paid to an employee after payroll taxes and other deductions
employee earnings recorda business form used to record details affecting payments made to an employee
regular hours times regular rateEmployee regular earnings are calculated as:
employee earnings up to a maximum paid in a calendar yearsocial security tax is calculated on:
provide additional protection and control payroll paymentsA separate payroll checking account is used primarily to:
TrueTrue/False: A business may decide to pay employee salaries every week, every two weeks, twice a month, or once a month
TrueTrue/False: Businesses use payroll records to inform employees of their annual earnings and to prepare payroll reports for the government
TrueTrue/False: Payroll time cards can be sued as the basic source of information to prepare a payroll
FalseTrue/False: The first task in preparing a payroll is to determine the number of days worked by each employee
FalseTrue/False: Total earnings are sometimes referred to as net pay or net earnings
TrueTrue/False: Employee total earnings are calculated as regular house x regular rate, plus overtime hours x overtime rate
TrueTrue/False: Payroll taxes withheld represent a liability for an employer until payment is made to government
TrueTrue/False: A business is required by law to withhold federal income taxes form employee total earnings
TrueTrue/False: Employers in many states are required to withhold state, city, or county income tax form employee earnings
TrueTrue/False: The amount of income tax withheld from each employee’s total earnings is determined from the number of withholding allowances and by the employee’s marital status
FalseTrue/False: A single person will have less income tax withheld than a married employee
FalseTrue/False: The larger the number of withholding allowances claimed, the larger the amount of income tax withheld
TrueTrue/False: An employee can be exempt form having federal income tax withheld under certain conditions
FalseTrue/False: Social security tax is paid by the employer only
TrueTrue/False: An act of congress can change the social security tax base and tax rate at any time
TrueTrue/False: When an employee’s earnings exceed the tax base, no more social security tax is deducted
TrueTrue/False: All deductions form employee wages are recorded in a payroll register
TrueTrue/False: The columns of the employee earnings record consists of the amount columns in a payroll register and an accumulated earnings column
FalseTrue/False: a new earnings record is prepared for each employee each year
TrueTrue/False: A check for the total net pay is written and deposited in the payroll checking account
TrueTrue/False: The information used to prepare payroll checks is taken forma payroll register
TrueTrue/False: When EFT is used, the employee does not recieve an individual check