Test Bank for Payroll Accounting -
Study Guides 9th Edition by Jeanette
Landin
Form I-9, Employment Verification - ANSLists the documents an employee must furnish to the
employer. This form identifies the employee and, if a noncitizen, verifies authorization to work in
the United States.
Form W-2, Wage and Tax Statement - ANSUsed by the employer to report the amount of wages
paid to each worker in the course of the trade or business of the employer.
Income tax - ANSLevy on the earnings of most employees that is deducted from their gross pay.
Payroll accounting system - ANSProcedures and methods related to the disbursement of pay to
employees.
Payroll register - ANSMulticolumn form used to assemble and summarize the data needed at
the end of each payroll period. It lists all employees who earned remuneration, the amount of
remuneration, the deductions and the net amount paid.
The Payroll Professional - ANSPayroll professionals are required to comply with numerous
regulations that demand advanced knowledge in the area of payroll.
Fair Labor Standards Act - ANS• minimum wage ($7.25 per hour) and overtime pay
requirements. • equal pay for equal work, employment of child labor, public service contracts
and wage garnishment. • coverage of employers engaged in interstate commerce or in
production of goods and services for interstate commerce. • maintaining records that explain the
basis of wage differentials paid to employees of opposite sex for equal work. • displaying a
poster (from the regional office of the Wage and Hour Division) informing employees of the
provisions of the law. • states' minimum wage and maximum hour laws that also establish
minimum wage rates for covered employees. Where both federal and state laws cover the same
employee, the higher of two rates prevails (e.g., Rhode Island — $13.00 per hour). 2 • states'
wage orders that also can affect pay periods, pay for call-in and waiting times, rest and meal
periods, absences, meals and lodging, uniforms, etc.
Federal Insurance Contribution Act (FICA) - ANS• tax on employees (set percent of their gross
wages) and employers for the Federal Old-Age and Survivors' Trust Fund and the Federal
Disability Insurance Trust Fund. • separate tax on employees and employers to finance the
Health Insurance Plan—Medicare. • tax on net earnings of the self-employed individual
, (Self-Employment Contributions Act— SECA). • making payments to people who are entitled to
benefits under these social security taxes.
Income Tax Withholding Laws - ANS• Income tax is levied on the earnings of most employees
and is deducted from their gross pay. • Income taxes can be imposed by federal, state and local
governments. • Federal Income Tax (FIT) employs a percentage formula or a wage bracket
chart used by each employer to withhold a specified amount from each wage payment. • State
tax rates vary from state to state.
Unemployment Tax Acts - ANS• Tax levied on employers (Federal Unemployment Tax
Act—FUTA) that is used to pay state and federal administrative expenses of the unemployment
program. • A credit is granted against most of the FUTA tax if the employer pays a state
unemployment tax. A smaller credit is granted to states that have not paid back borrowings from
the federal government that were used to pay the cost of benefits to their eligible unemployed
workers. • State unemployment taxes (SUTA) on employers are imposed by all states. These
taxes are used to pay unemployment benefits. • Standards set by the Social Security Act result
in a high degree of uniformity in the requirements of state unemployment laws. • Employers
need to be aware of the SUTA laws in the states where they operate.
Fair Employment Laws - ANSTitle VII of the Civil Rights Act of 1964 titled "Equal Employment
Opportunity" (EEO): 3 • It prohibits discrimination in hiring, firing, promoting or compensating
based on color, race, religion, national origin or gender. o may not exclude or segregate
members on the bases mentioned. • Sexual harassment is also prohibited. • It applies to all
employers who engage in an industry "affecting commerce" and employ 15 or more workers in
each of 20 or more weeks in the current or preceding calendar year. • The Civil Rights Act of
1991 grants compensatory and punitive damages in cases where discrimination is intentional.
Executive Orders - ANS• In a series of executive orders, the federal government has banned
discrimination based on race, color, religion, sex or national origin in employment on
government contracts.
Age Discrimination in Employment Act (ADEA) - ANS• It states that employers, employment
agencies and labor unions cannot use age to discriminate in hiring, firing or promoting. • It
applies to employers engaged in interstate commerce with 20 or more workers. • It places the
onus on the employer to keep accurate personnel and payroll records.
Americans with Disabilities Act (ADA) - ANS• ADA of 1990 prohibits employers with 15 or more
employees, employment agencies, labor organizations and joint labor management committees
from discriminating against qualified (defined as persons who can perform essential functions of
the job with or without reasonable accommodation) persons based upon disability. • The
prohibition of disability-based discrimination applies to job application procedures, hiring,
advancement, termination, compensation, job training and other conditions of employment. •
Reasonable accommodations, such as wheelchair-accessible restrooms and ramps, for
qualified disabled job applicants and workers must be provided.
Study Guides 9th Edition by Jeanette
Landin
Form I-9, Employment Verification - ANSLists the documents an employee must furnish to the
employer. This form identifies the employee and, if a noncitizen, verifies authorization to work in
the United States.
Form W-2, Wage and Tax Statement - ANSUsed by the employer to report the amount of wages
paid to each worker in the course of the trade or business of the employer.
Income tax - ANSLevy on the earnings of most employees that is deducted from their gross pay.
Payroll accounting system - ANSProcedures and methods related to the disbursement of pay to
employees.
Payroll register - ANSMulticolumn form used to assemble and summarize the data needed at
the end of each payroll period. It lists all employees who earned remuneration, the amount of
remuneration, the deductions and the net amount paid.
The Payroll Professional - ANSPayroll professionals are required to comply with numerous
regulations that demand advanced knowledge in the area of payroll.
Fair Labor Standards Act - ANS• minimum wage ($7.25 per hour) and overtime pay
requirements. • equal pay for equal work, employment of child labor, public service contracts
and wage garnishment. • coverage of employers engaged in interstate commerce or in
production of goods and services for interstate commerce. • maintaining records that explain the
basis of wage differentials paid to employees of opposite sex for equal work. • displaying a
poster (from the regional office of the Wage and Hour Division) informing employees of the
provisions of the law. • states' minimum wage and maximum hour laws that also establish
minimum wage rates for covered employees. Where both federal and state laws cover the same
employee, the higher of two rates prevails (e.g., Rhode Island — $13.00 per hour). 2 • states'
wage orders that also can affect pay periods, pay for call-in and waiting times, rest and meal
periods, absences, meals and lodging, uniforms, etc.
Federal Insurance Contribution Act (FICA) - ANS• tax on employees (set percent of their gross
wages) and employers for the Federal Old-Age and Survivors' Trust Fund and the Federal
Disability Insurance Trust Fund. • separate tax on employees and employers to finance the
Health Insurance Plan—Medicare. • tax on net earnings of the self-employed individual
, (Self-Employment Contributions Act— SECA). • making payments to people who are entitled to
benefits under these social security taxes.
Income Tax Withholding Laws - ANS• Income tax is levied on the earnings of most employees
and is deducted from their gross pay. • Income taxes can be imposed by federal, state and local
governments. • Federal Income Tax (FIT) employs a percentage formula or a wage bracket
chart used by each employer to withhold a specified amount from each wage payment. • State
tax rates vary from state to state.
Unemployment Tax Acts - ANS• Tax levied on employers (Federal Unemployment Tax
Act—FUTA) that is used to pay state and federal administrative expenses of the unemployment
program. • A credit is granted against most of the FUTA tax if the employer pays a state
unemployment tax. A smaller credit is granted to states that have not paid back borrowings from
the federal government that were used to pay the cost of benefits to their eligible unemployed
workers. • State unemployment taxes (SUTA) on employers are imposed by all states. These
taxes are used to pay unemployment benefits. • Standards set by the Social Security Act result
in a high degree of uniformity in the requirements of state unemployment laws. • Employers
need to be aware of the SUTA laws in the states where they operate.
Fair Employment Laws - ANSTitle VII of the Civil Rights Act of 1964 titled "Equal Employment
Opportunity" (EEO): 3 • It prohibits discrimination in hiring, firing, promoting or compensating
based on color, race, religion, national origin or gender. o may not exclude or segregate
members on the bases mentioned. • Sexual harassment is also prohibited. • It applies to all
employers who engage in an industry "affecting commerce" and employ 15 or more workers in
each of 20 or more weeks in the current or preceding calendar year. • The Civil Rights Act of
1991 grants compensatory and punitive damages in cases where discrimination is intentional.
Executive Orders - ANS• In a series of executive orders, the federal government has banned
discrimination based on race, color, religion, sex or national origin in employment on
government contracts.
Age Discrimination in Employment Act (ADEA) - ANS• It states that employers, employment
agencies and labor unions cannot use age to discriminate in hiring, firing or promoting. • It
applies to employers engaged in interstate commerce with 20 or more workers. • It places the
onus on the employer to keep accurate personnel and payroll records.
Americans with Disabilities Act (ADA) - ANS• ADA of 1990 prohibits employers with 15 or more
employees, employment agencies, labor organizations and joint labor management committees
from discriminating against qualified (defined as persons who can perform essential functions of
the job with or without reasonable accommodation) persons based upon disability. • The
prohibition of disability-based discrimination applies to job application procedures, hiring,
advancement, termination, compensation, job training and other conditions of employment. •
Reasonable accommodations, such as wheelchair-accessible restrooms and ramps, for
qualified disabled job applicants and workers must be provided.
