File: Chapter 15 Employees, Payroll and Account Reconciliation
True/False
[QUESTION]
1. In Chapter 15, you learn how the payroll feature integrates with the general journal.
[QUESTION]
2. Employers must withhold taxes from each employee’s paycheck.
[QUESTION]
3. The employer determines the number of exemptions or allowances withheld from employee’s
paychecks.
[QUESTION]
4. FICA taxes provide retirement benefits for qualified workers.
[QUESTION]
5. By January 31 of each year, employers are required to issue W-4 forms to employees and to the IRS.
[QUESTION]
6. Shannon’s Service Merchandise uses Account No. 10300, Payroll Checking Account, to disburse
paychecks.
[QUESTION]
7. Shannon’s Service Merchandise is located in California.
[QUESTION]
8. Example payroll tax withholding tables are included for the payroll journal.
[QUESTION]
9. In order to establish the payroll account, transfer funds from the Payroll Checking Account (Account
No. 10300) to Interstate Bank (Account No. 10200).
[QUESTION]
10. On Sage 50’s income statement, total expenses minus the cost of sales equals gross profit.
[QUESTION]
11. On Sage 50’s income statement, total expenses are subtracted from gross profit to arrive at net
income.
Multiple Choice
[QUESTION]
12. To start Chapter 15, you may need to restore data from the end of:
a. Chapter 12 (file name, Chapter 12.ptb)
b. Chapter 14 (file name, Chapter 14.ptb)
c. Chapter 13 (file name, Chapter 13.ptb)
d. Exercise 14-2 (file name, Exercise 14-2.ptb)
e. Exercise 14-1 (file name, Exercise 14-1.ptb)
[QUESTION]
13. The journal entry for transferring funds to the payroll checking account is:
a. Dr. Account No. 10200, Interstate Bank; Cr. Account No. 10300, Payroll Checking Account
b. Dr. Account No. 10000, Petty Cash, Cr. Account No. 10200, Interstate Bank
c. Dr. Account No. 10300, Payroll Checking Account; Cr. Account No. 10200, Interstate Bank
d. Dr. Account No. 77500, Wages Expense; Cr. Account No. 10200, Interstate Bank
e. Dr. Account No. 77600, Overtime Expense; Cr. Account No. 10300, Payroll Checking Account.
Page: 550
[QUESTION]
14. The account number used to record employees’ regular pay is:
a. 77500
b. 77600
c. 77700
d. 77800
e. 77900
[QUESTION]
15. The account number used to record employees’ overtime pay is:
a. 77500
b. 77600
c. 77700
d. 77800
e. 77900
[QUESTION]
16. The account number used to record the employees’ federal income tax deduction is:
a. 23650
b. 23600
c. 24000
d. 23400
e. 20000
[QUESTION]
17. The account number used to record the employer’s Soc. Sec. Expense is:
a. 24100
b. 24400
c. 72510
d. 72520
e. 72530
[QUESTION]
18. On the Navigation Bar, make the following selections to enter employee maintenance information:
a. Employees & Payroll Navigation Center > Employees > Write Letters to Employees
b. Employees & Payroll Navigation Center > Employees > New Employee
c. Employees & Payroll Navigation Center > Pay Employees > Set Up Payroll Service
d. Tasks > Payroll Entry
e. Tasks > Payroll Entry > View and Edit Employee Payments
[QUESTION]
19. In order to set up employer defaults for payroll liabilities and expenses, select this default:
a. Employee Defaults > General
b. Employee Defaults > Employee Fields
c. Employee Defaults > Company Fields
d. Payroll & Employees Navigation Center > Pay Employees
e. Reports & Forms > Payroll > Payroll Journal
[QUESTION]
20. Social security is a portion of which of the following:
a. FICA tax.
b. State Payroll Taxes Payable.
c. Exemptions.
d. Federal income taxes.
e. Voluntary deductions.
CHAPTER 15, ANSWERS TO MULTIPLE-CHOICE QUESTIONS, QA TEMPLATES:
In the space provided, type the letter that best answers each question. Or, boldface the answer.
_____1. The cash account to credit when disbursing checks for Sharon’s Service
Merchandise employees is:
_____2. The amount withheld from employees’ paychecks depends on:
_____3. Guidelines for employee and employer withholdings are found in the following IRS
publication:
_____4. On the Maintain Employees/Sales Reps window, you enter the following types of
information:
_____5. Taryn Anders received a January 4 paycheck in the amount of:
_____6. The entry in the General Journal for the transfer of funds on January 3, 2019 is:
_____7. All of these payroll tax deductions are subtracted from an employee’s gross pay
EXCEPT:
_____8. The Gross Pay Account is:
_____9. Lynn Gale received a January 11 paycheck in the amount of:
_____10. The maximum taxable earnings subject to social security taxes can change due to:
ANALYSIS QUESTION
What are the percentages for employee and employer Social Security and Medicare taxes?
Explain FICA.
ANSWER:
Social Security
2018
2019
FICA tax rate:
• Social Security for employees
• Social Security for employers
• Medicare for employees
• Medicare for employers
6.2%
6.2%
1.45%
1.45%
6.2%
6.2%
1.45%
1.45%
Maximum Social Security earnings for tax
contributions
Medicare taxable earnings
$128,400
No limit
$132,900
No limit
Sage 50’s payroll tax calculations are for example purposes only. Payroll services can
be purchased from Sage at https://www.sage.com/en-us/products/sage-payroll-
services/.
For additional information, refer to this website
http://www.imercer.com/content/social_security_figures.aspx.