ACCT 3310 Exam 2 Questions and Answers Latest Update 2025
Conceptual Payroll System:
-Personnel dept. (human resources) uses personnel action forms to: - Answers -activate new employees
-change the pay rate of employees
-change marital status and/or number of dependents
-terminate employees
*many companies may outsource payroll functions
-initiated by HR (personnel), processed by payroll dept. (separation of duties)
-all relates to COSO framework, especially Control Environment-hiring qualified employees, training
them well, establishing tone at the top.
Conceptual Payroll System:
-Production employees fill out two forms: - Answers -job tickets
-time cards (not all employees have time cards. ex: salaried employees with a base salary).
job tickets - Answers Account for the time spent by the worker on each production job (used by cost
accounting)
time cards - Answers Used to capture the total time worked each pay period for calculations. Must be
signed by a supervisor (typically signed by a manager).
Conceptual Payroll System:
-Payroll dept. receives personnel action forms and time cards.
-Uses them to: - Answers -prepare the payroll register
-enter the information into the employee payroll records
-prepare paychecks
-send paychecks to Cash Disbursements
Conceptual Payroll System:
-Cash Disbursements dept: - Answers -reviews and signs the paychecks and forwards them to a
paymaster for distribution to the employees (typically use an independent person to disburse checks)
-writes a check for the payroll and deposits it into the payroll imprest account
,imprest payroll account - Answers An account set up just for payroll accounts, separate from main
account.
Two Primary Subcycles - Answers -Receipt and payment of employee services
-Payroll accruals
Payroll subcycle documents: - Answers -Hire employees-personnel record (action form), deduction
authorization form (W-4)(withholdings based on tables of IFRS; when hired you fill out a W-4 form, and
you give them info about your lifestyle so they know how much to deduct for taxes).
-Receive employee services-time cards, job tickets
-Pay for employee services-checks
Calculating payrolls:
Payroll Deductions
Taxes: - Answers -Social Security Taxes
-Income Tax Withholding
Taxes Employee Pays: - Answers -Income Tax Withholding
-FICA Taxes-employee share
-Union dues
*Employer reports these amounts as liabilities until remitted
Taxes Employer Pays: - Answers -FICA taxes-employer share
-Federal unemployment
-State unemployment
*Employer reports these amounts as liabilities until remitted
*The biggest one besides income tax withholding is FICA
Payroll calculation:
Assume a weekly payroll of $10,000 entirely subject to F.I.C.A. and Medicare (7.65%), federal (0.8%) and
state (4%) unemployment taxes, with income tax withholding of $1,320 and union dues of $88
deducted. The company records the salaries and wages paid and the employee payroll deductions as
follows: - Answers Wages and salaries expense 10,000
Withholding taxes payable 1,320
, FICA taxes payable 765
Union dues payable 88
Cash 7,827
*When you pay Social Security and Medicare of 7.65%, your employer must also match that 7.65%
*If this was an accruing entry at the end of the year, cash would be wages and salaries payable instead.
Payroll calculation:
Assume a weekly payroll of $10,000 entirely subject to F.I.C.A. and Medicare (7.65%), federal (0.8%) and
state (4%) unemployment taxes, with income tax withholding of $1,320 and union dues of $88
deducted. The company records the employers payroll taxes as follows: - Answers Payroll tax expense
1,245
FICA taxes payable 765*
FUTA taxes payable 80
SUTA taxes payable 400
*Matching FICA that's been withheld.
**Usually employer taxes are only on the first $7,000 earned by each employee.
**Calculate FUTA and SUTA using percents
Payroll Physical Controls:
-Accounting Records-audit trail includes: - Answers -personnel action forms
-time cards
-job tickets
-payroll register
-subsidiary ledger accounts
-general ledger accounts
Payroll Physical Controls:
-Transaction authorization-the personnel action forms help prevent: - Answers -terminated employees
from receiving checks
-wage rates from being improperly changed for current employees
Conceptual Payroll System:
-Personnel dept. (human resources) uses personnel action forms to: - Answers -activate new employees
-change the pay rate of employees
-change marital status and/or number of dependents
-terminate employees
*many companies may outsource payroll functions
-initiated by HR (personnel), processed by payroll dept. (separation of duties)
-all relates to COSO framework, especially Control Environment-hiring qualified employees, training
them well, establishing tone at the top.
Conceptual Payroll System:
-Production employees fill out two forms: - Answers -job tickets
-time cards (not all employees have time cards. ex: salaried employees with a base salary).
job tickets - Answers Account for the time spent by the worker on each production job (used by cost
accounting)
time cards - Answers Used to capture the total time worked each pay period for calculations. Must be
signed by a supervisor (typically signed by a manager).
Conceptual Payroll System:
-Payroll dept. receives personnel action forms and time cards.
-Uses them to: - Answers -prepare the payroll register
-enter the information into the employee payroll records
-prepare paychecks
-send paychecks to Cash Disbursements
Conceptual Payroll System:
-Cash Disbursements dept: - Answers -reviews and signs the paychecks and forwards them to a
paymaster for distribution to the employees (typically use an independent person to disburse checks)
-writes a check for the payroll and deposits it into the payroll imprest account
,imprest payroll account - Answers An account set up just for payroll accounts, separate from main
account.
Two Primary Subcycles - Answers -Receipt and payment of employee services
-Payroll accruals
Payroll subcycle documents: - Answers -Hire employees-personnel record (action form), deduction
authorization form (W-4)(withholdings based on tables of IFRS; when hired you fill out a W-4 form, and
you give them info about your lifestyle so they know how much to deduct for taxes).
-Receive employee services-time cards, job tickets
-Pay for employee services-checks
Calculating payrolls:
Payroll Deductions
Taxes: - Answers -Social Security Taxes
-Income Tax Withholding
Taxes Employee Pays: - Answers -Income Tax Withholding
-FICA Taxes-employee share
-Union dues
*Employer reports these amounts as liabilities until remitted
Taxes Employer Pays: - Answers -FICA taxes-employer share
-Federal unemployment
-State unemployment
*Employer reports these amounts as liabilities until remitted
*The biggest one besides income tax withholding is FICA
Payroll calculation:
Assume a weekly payroll of $10,000 entirely subject to F.I.C.A. and Medicare (7.65%), federal (0.8%) and
state (4%) unemployment taxes, with income tax withholding of $1,320 and union dues of $88
deducted. The company records the salaries and wages paid and the employee payroll deductions as
follows: - Answers Wages and salaries expense 10,000
Withholding taxes payable 1,320
, FICA taxes payable 765
Union dues payable 88
Cash 7,827
*When you pay Social Security and Medicare of 7.65%, your employer must also match that 7.65%
*If this was an accruing entry at the end of the year, cash would be wages and salaries payable instead.
Payroll calculation:
Assume a weekly payroll of $10,000 entirely subject to F.I.C.A. and Medicare (7.65%), federal (0.8%) and
state (4%) unemployment taxes, with income tax withholding of $1,320 and union dues of $88
deducted. The company records the employers payroll taxes as follows: - Answers Payroll tax expense
1,245
FICA taxes payable 765*
FUTA taxes payable 80
SUTA taxes payable 400
*Matching FICA that's been withheld.
**Usually employer taxes are only on the first $7,000 earned by each employee.
**Calculate FUTA and SUTA using percents
Payroll Physical Controls:
-Accounting Records-audit trail includes: - Answers -personnel action forms
-time cards
-job tickets
-payroll register
-subsidiary ledger accounts
-general ledger accounts
Payroll Physical Controls:
-Transaction authorization-the personnel action forms help prevent: - Answers -terminated employees
from receiving checks
-wage rates from being improperly changed for current employees
