Payroll Final Exam
Companies usually provide a separate column in the payroll register to record the employers payroll
taxes - correct answers ✔✔False
An employer will use the payroll register to keep track of an employees accumulated wages - correct
answers ✔✔False
Deduction from gross pay in the payroll register are reflected on the credit side of the journal entry to
record the payroll - correct answers ✔✔True
If wages are paid weekly, postings to the employees earnings record would be done once a month -
correct answers ✔✔False
In order to prepare Forms W-2, an employer would utilize the employees earning record - correct
answers ✔✔True
Tax withholding from employees pay reduce the amount of the debit to salary expense in the payroll
entry - correct answers ✔✔False
The wages and salaries expense account is an operating expense account debited for total net pay each
payroll period - correct answers ✔✔False
The SUTA tax is not a social security tax - correct answers ✔✔False
Since the Advance EIC payments are added to the employees take home pay checks, it is an added
expense to the employer - correct answers ✔✔False
FIT Payable is a liability account used to record both the employees withheld federal income taxes and
also the employers match of that tax - correct answers ✔✔False
, A debit to the employees FIT payable account removes the liability for the amount of federal income
taxes withheld from employees wages - correct answers ✔✔True
When withheld union dues are turned over to the union by the employer, a journal entry is made
debiting the liability account and crediting the Cash Account - correct answers ✔✔True
Under the provision of the Consumer Credit Protection Act, an employer can discharge an employee
simply because the employees wage is subject to garnishment for a single indebtedness - correct
answers ✔✔False
Under the Consumer Credit Protection Act, disposable earning are the earning remaining after any
deduction for taxes, pensions (such as the 401-k) and health insurance - correct answers ✔✔False
When recording FICA taxes, different liability accounts should be set up for the employees and the
employers portion of the tax - correct answers ✔✔False
FUTA taxes payable is an expense account in which are recorded the employers federal unemployment
taxes - correct answers ✔✔False
Since the FUTA is a social security tax, it can be charged to the same expense account as the other
payroll taxes of the employer, the Payroll Taxes Expense account - correct answers ✔✔True
At the time that the entry is made to record the employers payroll taxes, the SUTA tax is recorded at the
net amount (0.8%) - correct answers ✔✔False
In the adjusting entry to accrue wages at the end of the accounting period, there is no need to credit any
tax withholding accounts - correct answers ✔✔True
The adjusting entry to record accrued vacation pay at the end of the accounting period includes credits
to the tax withholding liability accounts - correct answers ✔✔False
Since vacation time is paid when used, there is no need to accrue this time in a liability account at the
end of each accounting period - correct answers ✔✔False
Companies usually provide a separate column in the payroll register to record the employers payroll
taxes - correct answers ✔✔False
An employer will use the payroll register to keep track of an employees accumulated wages - correct
answers ✔✔False
Deduction from gross pay in the payroll register are reflected on the credit side of the journal entry to
record the payroll - correct answers ✔✔True
If wages are paid weekly, postings to the employees earnings record would be done once a month -
correct answers ✔✔False
In order to prepare Forms W-2, an employer would utilize the employees earning record - correct
answers ✔✔True
Tax withholding from employees pay reduce the amount of the debit to salary expense in the payroll
entry - correct answers ✔✔False
The wages and salaries expense account is an operating expense account debited for total net pay each
payroll period - correct answers ✔✔False
The SUTA tax is not a social security tax - correct answers ✔✔False
Since the Advance EIC payments are added to the employees take home pay checks, it is an added
expense to the employer - correct answers ✔✔False
FIT Payable is a liability account used to record both the employees withheld federal income taxes and
also the employers match of that tax - correct answers ✔✔False
, A debit to the employees FIT payable account removes the liability for the amount of federal income
taxes withheld from employees wages - correct answers ✔✔True
When withheld union dues are turned over to the union by the employer, a journal entry is made
debiting the liability account and crediting the Cash Account - correct answers ✔✔True
Under the provision of the Consumer Credit Protection Act, an employer can discharge an employee
simply because the employees wage is subject to garnishment for a single indebtedness - correct
answers ✔✔False
Under the Consumer Credit Protection Act, disposable earning are the earning remaining after any
deduction for taxes, pensions (such as the 401-k) and health insurance - correct answers ✔✔False
When recording FICA taxes, different liability accounts should be set up for the employees and the
employers portion of the tax - correct answers ✔✔False
FUTA taxes payable is an expense account in which are recorded the employers federal unemployment
taxes - correct answers ✔✔False
Since the FUTA is a social security tax, it can be charged to the same expense account as the other
payroll taxes of the employer, the Payroll Taxes Expense account - correct answers ✔✔True
At the time that the entry is made to record the employers payroll taxes, the SUTA tax is recorded at the
net amount (0.8%) - correct answers ✔✔False
In the adjusting entry to accrue wages at the end of the accounting period, there is no need to credit any
tax withholding accounts - correct answers ✔✔True
The adjusting entry to record accrued vacation pay at the end of the accounting period includes credits
to the tax withholding liability accounts - correct answers ✔✔False
Since vacation time is paid when used, there is no need to accrue this time in a liability account at the
end of each accounting period - correct answers ✔✔False
