Payroll Accounting

NOTE: For multiple-choice and true/false questions, simply place your cursor over what you think is the correct answer. (There is no need to click the answer.) For fill-in-the-blank questions place your cursor over the _________.

If you have difficulty answering the following questions, learn more about this topic by reading our Payroll Accounting Explanation.

1.	The combination of the Social Security tax and the Medicare tax is referred to by the acronym ___________.

2.	The current rate for the Social Security tax (excluding the Medicare tax) that is withheld from employees' salaries and wages up to a specified annual amount is _____%.

3.	The combined rate for the Social Security tax and the Medicare tax to be withheld from each employee's gross wages up to $106,800 in 2009 is _____%.

4.	The amount of FICA that should be withheld from an employee’s salary of $200,000 in the year 2009 is $____________.

5.	What is the total amount of FICA that needs to be remitted by an employer in 2009 for an employee earning $50,000?
$1,450          $3,825          $6,200          $7,650

6.	The pay earned by hourly-paid employees is usually referred to as _________.

7.	The pay earned by managers who are paid semi-monthly is referred to as _____________.

8.	Which employee payroll classification will likely require an accrual adjusting entry for the gross salaries or wages at the end of a calendar month?
Exempt salaried employees paid semi-monthly              Hourly employees paid weekly

9.	The federal form on which an employee indicates the number of exemptions/dependents to be used in calculating the amount of federal income tax withholding for the employee is the ________ form.

10.	An example of a court-ordered employee withholding is __________________.

11.	The amount that an employee "clears" or "takes home" is the ________ pay.

12.	A tax paid by the employer that is 0.8% of each employee’s first $7,000 of annual salary or wages is ____________  ______________ tax.

13.	A cost paid by the employer to cover an employee’s work-related injury is _____________  ________________ insurance.

14.	An employee is hired at a pay rate of $10 per hour. During the past week, the employee worked 50 hours. The employee’s gross wages for the past week are
$400          $450          $500          $550

Use the following information for Questions 15 – 17:
An employee worked the entire year of 2008 and earned two weeks of vacation as specified in the company’s labor agreement. The agreement also states that the two weeks of vacation shall be taken anytime in 2009 and the amount paid will be 80 hours multiplied by the employee’s rate of pay at December 31, 2008. At December 31, 2008 the employee’s pay rate was $15.

15.	Which financial statements are affected in the year 2008?
Balance Sheet Only    Income Statement Only    Balance Sheet & Income Statement    Neither the Balance Sheet nor the Income Statement

16.	The amount that will be reported on the 2009 income statement as Vacation Expense for the vacation taken in 2009 is $______________.

17.	When the employer pays the employee in 2009 for the vacation earned in 2008, what account will the company debit?
Cash              Vacation Expense              Vacation Payable

18.	In January 2009 an employer remits the state unemployment tax that pertains to its employees' wages for the final three months of 2008. On which income statement will the state unemployment tax expense appear under accrual accounting?
2008              2009

Use the following information for Questions 19 – 20:
An employer has computed the following amounts for its employee Mary during a week in January: gross wages $500.00; FICA tax withheld $38.25; federal income tax withholding $60.00; State income tax withholding $20.00; unemployment taxes $24; worker compensation insurance $5. The company does not provide health insurance, paid vacations, or any other benefits.

19.	The amount of Mary’s net pay is
$352.75              $357.75              $381.75

20.	The employer’s total expense for Mary’s employment during the week is
$505.00          $529.00          $567.25          $605.50

Download The Master Set of 80 Business Forms

Whether you are a business person or student of business, our forms will assist you in preparing financial statements, financial ratios, break-even calculations, depreciation, standard cost variances, and much, much more. Click Here to Learn More