Test Bank for Payroll Accounting:
Employee Earnings and Deductions 9th
Edition by Jeanette Landin
The account, ___________ _____________ ____________ ____________ , should be
credited for the total income tax withheld from an employee's earnings. - ANSEmployee Income
Tax Payable
An employee's total earnings are also known as _____________ _____________. - ANSgross
pay
Compensation for managerial or administrative services is called ____________. - ANSsalary
Payroll expenditures represent a relatively small part of the total expenditures of most
companies. - ANSFalse
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. - ANS
The Fair Labor Standards Act requires employees to pay double the regular hourly rate for the
time worked on Saturday.
True - ANSFalse
Compensation expressed in terms of hours, weeks, or units produced for skilled or unskilled
labor is usually referred to as salary. - ANSFalse
Companies must accumulate payroll data both for the business as a whole and for each
employee. - ANSTrue
Compensation for managerial or administrative services usually is expressed in biweekly,
monthly, or annual terms and is called wages. - ANSFalse
Every individual who performs services for a business is considered to be an employee. -
ANSFalse
The various government laws and regulations regarding employee deductions, employer payroll
taxes, payroll records, and payroll reports apply only to employees and not to independent
contractors. - ANSTrue
, Government laws and regulations regarding payroll are much more complex for employees than
for independent contractors. - ANSTrue
Employers primarily use the wage-bracket method to determine the amount of tax to be withheld
from an employee's pay. - ANSTrue
The difference between an independent contractor and an employee is an important legal
distinction. - ANSTrue
An independent contractor performs a service for a fee and works under the control and
direction of the company paying for the service. - ANSFalse
The payroll register is a summary of the annual earnings of each employee. - ANSFalse
Plastic cards or badges encoded with basic employee data are now being used in
computer-based time keeping systems. - ANSTrue
The Medicare tax rate is subject to a maximum amount. - ANSFalse
FICA taxes include amounts for Social Security but not Medicare programs. - ANSFalse
The payroll register replaces the general journal in most businesses. - ANSFalse
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. - ANSTrue
Separate accounts are kept for each type of earnings deduction. - ANSTrue
Under federal law, employers are required to withhold a percentage of the employees' wages for
pensions. - ANSFalse
A purely manual system of record keeping is one in which all records, journals, and ledgers are
prepared by hand. - ANSTrue
A withholding allowance exempts a specific dollar amount of an employee's gross pay from
federal income tax withholding. - ANSTrue
Pension payments are required deductions from an employee's gross earnings. - ANSFalse
Tracing the employee's gross pay for a specific time period into the appropriate wage-bracket
table provided by the Internal Revenue Service is called using the wage-bracket method to
determine the amount of tax to be withheld from an employee's pay. - ANSTrue
Employee Earnings and Deductions 9th
Edition by Jeanette Landin
The account, ___________ _____________ ____________ ____________ , should be
credited for the total income tax withheld from an employee's earnings. - ANSEmployee Income
Tax Payable
An employee's total earnings are also known as _____________ _____________. - ANSgross
pay
Compensation for managerial or administrative services is called ____________. - ANSsalary
Payroll expenditures represent a relatively small part of the total expenditures of most
companies. - ANSFalse
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. - ANS
The Fair Labor Standards Act requires employees to pay double the regular hourly rate for the
time worked on Saturday.
True - ANSFalse
Compensation expressed in terms of hours, weeks, or units produced for skilled or unskilled
labor is usually referred to as salary. - ANSFalse
Companies must accumulate payroll data both for the business as a whole and for each
employee. - ANSTrue
Compensation for managerial or administrative services usually is expressed in biweekly,
monthly, or annual terms and is called wages. - ANSFalse
Every individual who performs services for a business is considered to be an employee. -
ANSFalse
The various government laws and regulations regarding employee deductions, employer payroll
taxes, payroll records, and payroll reports apply only to employees and not to independent
contractors. - ANSTrue
, Government laws and regulations regarding payroll are much more complex for employees than
for independent contractors. - ANSTrue
Employers primarily use the wage-bracket method to determine the amount of tax to be withheld
from an employee's pay. - ANSTrue
The difference between an independent contractor and an employee is an important legal
distinction. - ANSTrue
An independent contractor performs a service for a fee and works under the control and
direction of the company paying for the service. - ANSFalse
The payroll register is a summary of the annual earnings of each employee. - ANSFalse
Plastic cards or badges encoded with basic employee data are now being used in
computer-based time keeping systems. - ANSTrue
The Medicare tax rate is subject to a maximum amount. - ANSFalse
FICA taxes include amounts for Social Security but not Medicare programs. - ANSFalse
The payroll register replaces the general journal in most businesses. - ANSFalse
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. - ANSTrue
Separate accounts are kept for each type of earnings deduction. - ANSTrue
Under federal law, employers are required to withhold a percentage of the employees' wages for
pensions. - ANSFalse
A purely manual system of record keeping is one in which all records, journals, and ledgers are
prepared by hand. - ANSTrue
A withholding allowance exempts a specific dollar amount of an employee's gross pay from
federal income tax withholding. - ANSTrue
Pension payments are required deductions from an employee's gross earnings. - ANSFalse
Tracing the employee's gross pay for a specific time period into the appropriate wage-bracket
table provided by the Internal Revenue Service is called using the wage-bracket method to
determine the amount of tax to be withheld from an employee's pay. - ANSTrue
