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NOTE: In the following problems, use the net FUTA tax rate of 0.6% on the first $7,000 of taxable wages.a. Complete Part 2 of Form 940 based on the following information: b. If the employer is located in North Carolina […]

In some states, employers may obtain reduced unemployment compensation rates by making voluntary contributions to the state fund. If an employee works in more than one state, the employer must pay a separate SUTA tax to each of those states […]

Training sessions are counted as working time when the following condition is met: a. the employees attendance is voluntary. b. the employer requires the employees attendance. c. the training sessions are for the primary benefit of the employee. d. the […]

NOTE: In all problems, unless instructed otherwise, compute the hourly and overtime rates as follows: 1) Carry the hourly rate and the overtime rate to 3 decimal places and then round off to 2 decimal places (round the hourly rate […]

Employers not subject to Title VII coverage may come within the scope of the Civil Rights Act by reason of a contract or subcontract involving federal funds. A waiter receives cash tips amounting to $120 in a month. The waiter […]

A personal allowance: a. amounted to $2,000 in 2016. b. may be claimed to exempt a portion of the employee’s earnings from withholding. c. is indexed for inflation every calendar quarter. d. may be claimed at the same time with […]

For which of the following payments is the employer required to withhold federal income taxes? a. Advances made to sales personnel for traveling expenses b. Tipped employees monthly tips of $120 c. Deceased persons wages paid to the estate d. […]

The IRA format of the SIMPLE plan allows employees to make tax-free contributions of up to $12,500. NOTE: In all problems, unless instructed otherwise, compute the hourly and overtime rates as follows: 1) Carry the hourly rate and the overtime […]

EXAMINATION QUESTIONS To aid instructors using Payroll Accounting, we have provided a section of examination questions in this manual. The section contains true-false and multiple-choice questions for Chapter 1, with the addition of short problems for Chapters 2, 3, 4, […]

E–7 CHAPTER 2 True-False Questions 2–2 are only covered if their annual charges for services are at least $500,000. T 2. Institutions of higher education are extended coverage under FLSA with- 2–2 out regard to their annual sales volume. F […]

CHAPTER 3 True-False Questions 3–1 earnings of self-employed persons. T 2. FICA includes partnerships in its definition of employer. F 3. In its definition of employee, FICA clearly distinguishes between classes 3–2 3–2 or grades of employees. F 4. The […]

CHAPTER 4 True-False Questions 4–2 must have been, an employer-employee relationship. F 2. Since not-for-profit corporations are exempt from federal income taxes, 4–2 they are not defined as employers under the federal income tax withholding law. T 3. Under the […]

CHAPTER 5 True-False Questions 5–2 employer who has only part-time employees. T 2. The Social Security Act ordered every state to set up an unemployment 5–1 compensation program. F 3. Partnerships do not have to pay unemployment taxes on the […]

CHAPTER 6 True-False Questions 6–2 never appear on the payroll register. F 2. Companies usually provide a separate column in the payroll register to 6–3 record the employer’s payroll taxes. F 3. An employer will use the payroll register to […]

NOTE: In all problems, unless instructed otherwise, compute the hourly and overtime rates as follows: 1) Carry the hourly rate and the overtime rate to 3 decimal places and then round off to 2 decimal places (round the hourly rate […]

On August 3, Hunt filed an amended Form W-4 to show a decrease in the number of allowances claimed. Hunts employer must put the new withholding allowance certificate into effect before the next weekly payday on August 5. If an […]

Self-employed persons include their self-employment taxes in their quarterly payment of estimated federal income taxes. Public safety employees of a state can be granted compensatory time off in lieu of overtime compensation. Answer: T ERISA provides for full vesting of […]

Questions pertaining to religion, gender, national origin, or age are allowed on application forms when these are bona fide occupational qualifications for a job. When employees spend time changing clothes on the employers premises, this time must be counted as […]

An employer must withhold federal income taxes on both the tips reported by tipped employees and the tips that the employer allocates to the employees. A debit to the employees FIT payable account removes the liability for the amount of […]

Since the FUTA tax is a social security tax, it can be charged to the same expense account as the other payroll taxes on the employer, the payroll taxes account. Under the Consumer Credit Protection Act, disposable earnings are the […]

Employers do not pay payroll taxes on payments made to independent contractors. For FUTA purposes, the cash value of remuneration paid in any medium other than cash is not considered taxable wages. Answer: F Since the credit against the FUTA […]