~*Chapter 13 Test Review*~
1. Employer payroll taxes expense is based on a percentage of employee earnings.
2. Each employer who withholds income tax and social security and Medicare from
employee salaries must furnish each employee with a W2 at the end of the year.
3. Come employers must deposit payments for withheld employees’ federal income tax
and social security and Medicare taxes on the next banking day.
4. If an employee’s accumulated earnings are $6,500.00, and the employee earns
another $1,500, the amount of new earnings subject to unemployment tax is $500.
5. The tax base for Medicare tax is $7000.
6. In the journal entry for payroll, the amount debited to Salary Expense is the total of
the Gross Pay column of the payroll register.
7. Federal employment tax is usually paid each quarter.
8. The timing of payment of tax payments is based on the amount owed.
9. Each employer is required by law to periodically report the payroll taxes withheld
from employee salaries.
10. The transaction to record employer payroll taxes expense is journalized at the end of
the month.
11. Federal unemployment insurance laws require that employers pay taxes for
unemployment compensation.
12. The employer social security tax rate is the same as the employee social security tax
rate.
13. Employer payroll taxes are business expenses.
14. The source document for payment of a payroll is the check.
15. The payroll register and employee earnings records provide all the payroll
information needed to prepare a payroll.
16. Each pay period the payroll information for each employee is recorded on each
employee earnings record.
17. The source document for paying state unemployment tax is a check.
18. In general, employers are required to pay state unemployment taxes during the month
following each calendar quarter.
19. The source document for paying employee income tax and social security and
Medicare tax is a check.
20. Employers are required to furnish each employee with an annual statement of
earnings and withholdings before January 31 of the following year.
21. Each employer must file a federal tax return showing the federal income tax and
social security and Medicare taxes due to the government quarterly.
22. The total earnings subject to federal unemployment tax is referred to as
unemployment taxable earnings.
23. Until amounts withheld from employee salaries are paid by the employer, they are
recorded as liabilities.
24. The entry to journalize paying a semimonthly payroll less deductions for employee
income tax, social security and Medicare, and US Savings Bonds is a credit to Cash
and the liability accounts and a debit to Salary Expense.