SUA PAYROLL CH #5 EXAM
QUESTIONS WITH COMPLETE
ANSWERS
payroll disbursement unique characteristics - ANSWER-entails tax withholding and
benefits, often made from a separate bank account (imprest account), recorded in a
separate special journal
objectives of the payroll cycle - ANSWER-1) hire employees to provide labor and
expertise 2)measure employee labor 3) render payment to employees for labor
performed 4) withhold earnings for income tax purposes, FICA, Medicare, union
dues, insurance, etc and make associated required payments
control objectives - ANSWER-1) all employee hires are authorized 2) All payroll
transactions are recorded and summarized at the correct amounts 3) All transactions
are correctly classified in the general ledger as defined by the chart of accounts 4)
All transactions are included in the proper period 5) Salaries and wages earned by
employees at the balance sheet date are properly accrued along with related payroll
taxes
variable payments - ANSWER-hourly (time card), commission (sales invoices),
piece-rate basis (production records)
internal control for payment of work - ANSWER-time or other records should be
signed by the employee and approved by a supervisor before payment
federal, state and city taxes based on - ANSWER-W-4 info and gross pay
FICA taxes are - ANSWER-7.65% of gross wages
FICA taxes consist of - ANSWER-Old Age, Survivors and Disability Insurance
(OASDI/ "Social Security") (6.2% of gross wages) and Medicare tax (1.45% of gross
wages)
employer tax match - ANSWER-FICA
FUTA and SUTA are paid on - ANSWER-first $7000 of wages paid to covered
employees
record employer payroll tax accrual in - ANSWER-general journal
action: pay roll checks --> documents: - ANSWER-payroll check/ stub
action: tax withholdings --> documents: - ANSWER-payroll tax returns (federal, state
and local) and the check
QUESTIONS WITH COMPLETE
ANSWERS
payroll disbursement unique characteristics - ANSWER-entails tax withholding and
benefits, often made from a separate bank account (imprest account), recorded in a
separate special journal
objectives of the payroll cycle - ANSWER-1) hire employees to provide labor and
expertise 2)measure employee labor 3) render payment to employees for labor
performed 4) withhold earnings for income tax purposes, FICA, Medicare, union
dues, insurance, etc and make associated required payments
control objectives - ANSWER-1) all employee hires are authorized 2) All payroll
transactions are recorded and summarized at the correct amounts 3) All transactions
are correctly classified in the general ledger as defined by the chart of accounts 4)
All transactions are included in the proper period 5) Salaries and wages earned by
employees at the balance sheet date are properly accrued along with related payroll
taxes
variable payments - ANSWER-hourly (time card), commission (sales invoices),
piece-rate basis (production records)
internal control for payment of work - ANSWER-time or other records should be
signed by the employee and approved by a supervisor before payment
federal, state and city taxes based on - ANSWER-W-4 info and gross pay
FICA taxes are - ANSWER-7.65% of gross wages
FICA taxes consist of - ANSWER-Old Age, Survivors and Disability Insurance
(OASDI/ "Social Security") (6.2% of gross wages) and Medicare tax (1.45% of gross
wages)
employer tax match - ANSWER-FICA
FUTA and SUTA are paid on - ANSWER-first $7000 of wages paid to covered
employees
record employer payroll tax accrual in - ANSWER-general journal
action: pay roll checks --> documents: - ANSWER-payroll check/ stub
action: tax withholdings --> documents: - ANSWER-payroll tax returns (federal, state
and local) and the check
