Payroll Accounting Final Exam
A bonus paid as remuneration for services is not considered taxable wages for unemployment tax
purposes even if the employee has not exceeded the taxable wage base.
True
False - correct answer False
A publisher is preparing information returns to report the royalties paid to authors (nonemployees)
during the prior calendar year. The proper information return to be completed is
Form W-2
Form W-3
Form 1099-MISC
Form 1099-DIV
any of the above forms - correct answer Form 1099-MISC
A sole proprietor with two employees is exempt from the requirements of the federal income tax
withholding law.
True
False - correct answer False
A worker with three employers should always claim at least one withholding allowance with each
employer.
True
False - correct answer False
All of the states allow employers to make voluntary contributions into their state unemployment fund so
that a lower tax contribution rate would be assigned.
True
False - correct answer False
An employee filed a Form W-4 and claimed 22 withholding allowances. The employer should withhold
22% of the worker's gross earnings for federal income taxes until the form W-4 is approved by the IRS.
, True
False - correct answer False
At the time of depositing FICA taxes and employees' federal income taxes, the account FICA Tax Expense
is debited for both the employees' and the employer's portions of the FICA taxes.
True
False - correct answer False
Both the percentage method and the wage-bracket method of withholding have each of the following
characteristics except
unmarried persons are distinguished from married persons
a table of allowances values is used
employees are given the full benefit of the allowances they claim
tables and wage-bracket charts are used to determine the amount withheld
the standard deduction is taken into account - correct answer a table of allowances values is used
Cash tips of $20 dollars or more in a month must be reported to the employer by the tipped employee
by the end of the following month.
True
False - correct answer False
Contributions made by the employer into employees' health savings accounts are excluded from the
employee's taxable income.
True
False - correct answer True
Direct deposit of paychecks can be forced on employees in every state.
True
False - correct answer False
A bonus paid as remuneration for services is not considered taxable wages for unemployment tax
purposes even if the employee has not exceeded the taxable wage base.
True
False - correct answer False
A publisher is preparing information returns to report the royalties paid to authors (nonemployees)
during the prior calendar year. The proper information return to be completed is
Form W-2
Form W-3
Form 1099-MISC
Form 1099-DIV
any of the above forms - correct answer Form 1099-MISC
A sole proprietor with two employees is exempt from the requirements of the federal income tax
withholding law.
True
False - correct answer False
A worker with three employers should always claim at least one withholding allowance with each
employer.
True
False - correct answer False
All of the states allow employers to make voluntary contributions into their state unemployment fund so
that a lower tax contribution rate would be assigned.
True
False - correct answer False
An employee filed a Form W-4 and claimed 22 withholding allowances. The employer should withhold
22% of the worker's gross earnings for federal income taxes until the form W-4 is approved by the IRS.
, True
False - correct answer False
At the time of depositing FICA taxes and employees' federal income taxes, the account FICA Tax Expense
is debited for both the employees' and the employer's portions of the FICA taxes.
True
False - correct answer False
Both the percentage method and the wage-bracket method of withholding have each of the following
characteristics except
unmarried persons are distinguished from married persons
a table of allowances values is used
employees are given the full benefit of the allowances they claim
tables and wage-bracket charts are used to determine the amount withheld
the standard deduction is taken into account - correct answer a table of allowances values is used
Cash tips of $20 dollars or more in a month must be reported to the employer by the tipped employee
by the end of the following month.
True
False - correct answer False
Contributions made by the employer into employees' health savings accounts are excluded from the
employee's taxable income.
True
False - correct answer True
Direct deposit of paychecks can be forced on employees in every state.
True
False - correct answer False
