Chapter 8: Payroll Accounting
direct deposit - correct answer A payroll method in which the employee does not handle the paycheck;
payment is made by the employer directly to the employee's bank using EFT.
electronic system - correct answer A computer system based on a software package that performs all
payroll record keeping and prepares payroll checks.
employee earnings record - correct answer A separate record of each employee's earnings.
FICA taxes - correct answer Payroll taxes withheld to provide Social Security and Medicare benefits.
gross pay - correct answer An employee's total earnings.
independent contractor - correct answer Someone who performs a service for a fee and does not work
under the control and direction of the company paying for the service.
manual system - correct answer Payroll system in which all records are prepared by hand.
net pay - correct answer Gross pay less mandatory and voluntary deductions.
payroll processing center - correct answer A business that sells payroll record-keeping services.
payroll register - correct answer A form used to assemble the data required at the end of each payroll
period.
salary - correct answer Compensation for managerial or administrative services.
wage-bracket method - correct answer A method of determining the amount to withhold from an
employee's gross pay for a specific time period. Wage-bracket tables are provided by the Internal
Revenue Service.
direct deposit - correct answer A payroll method in which the employee does not handle the paycheck;
payment is made by the employer directly to the employee's bank using EFT.
electronic system - correct answer A computer system based on a software package that performs all
payroll record keeping and prepares payroll checks.
employee earnings record - correct answer A separate record of each employee's earnings.
FICA taxes - correct answer Payroll taxes withheld to provide Social Security and Medicare benefits.
gross pay - correct answer An employee's total earnings.
independent contractor - correct answer Someone who performs a service for a fee and does not work
under the control and direction of the company paying for the service.
manual system - correct answer Payroll system in which all records are prepared by hand.
net pay - correct answer Gross pay less mandatory and voluntary deductions.
payroll processing center - correct answer A business that sells payroll record-keeping services.
payroll register - correct answer A form used to assemble the data required at the end of each payroll
period.
salary - correct answer Compensation for managerial or administrative services.
wage-bracket method - correct answer A method of determining the amount to withhold from an
employee's gross pay for a specific time period. Wage-bracket tables are provided by the Internal
Revenue Service.
