A retail shop may employ a fulltime student at $5.00 per hour.
a. True
b. False
The OASDI taxable wage base is correctly defined as:
a. all amounts earned by an employee during a calendar year.
b. the maximum amount of wages during a calendar year that is subject to the OASDI
tax.
c. all amounts paid an employee during a calendar year.
d. all amounts either earned by, or paid to, an employee during a calendar year.
e. none of the above.
Since FUTA tax is paid only once a quarter, the FUTA tax expense is recorded only at
the time of payment.
a. True
b. False
Under the FLSA, regular rate of pay does not include:
a. vacation pay.
b. severance pay.
c. overtime pay.
d. earned bonuses.
e. All of the above are considered wages.
Each of the following items is accurately defined under FICA as taxable wages except:
a. value of meals furnished employees for the employer’s convenience.
b. value of meals furnished employees for the employees’ convenience.
c. commissions.
d. severance pay.
e. $500 award for productivity improvement suggestion.
Which of the following is part of the Family and Medical Leave Act for the
employer:HTMLENTITY#8203HTMLENTITY
a. HTMLENTITY#8203HTMLENTITYMust provide for 9 months of unpaid leave
b. HTMLENTITY#8203HTMLENTITYMust allow all employees to take the leave
c. HTMLENTITY#8203HTMLENTITYMust pay the employee 50% of their salary
during the leave
d. HTMLENTITY#8203HTMLENTITYMust continue the employee’s healthcare
coverage during the leave
e. HTMLENTITY#8203HTMLENTITYAll of the above
Which of the following statements does not describe an employee’s FICA taxes and
withholdings?
a. The employee’s taxes are collected by the employer and paid to the IRS along with
the employer’s taxes.
b. The employee’s taxes are deducted from the employee’s wages at the time of
payment.
c. The employee’s liability for the FICA taxes continues even after the employer has
withheld them.
d. The amount of tax to be withheld is computed by multiplying the employee’s taxable
wages by the current tax rate.
e. The employee is entitled to a refund for overpayment of FICA taxes resulting from
having worked for more than one employer.
Gere became the father of triplets on May 21. He must file an amended Form W4 on or
before May 31.
a. True
b. False
Currently, none of the states imposes an unemployment tax on employees.
a. True
b. False
The FLSA provides health insurance for the aged and disabled (Medicare).
a. True
b. False
Under the federal income tax withholding law, which of the following is not defined as
an employee?
a. Partner who draws compensation for services rendered the partnership
b. General manager, age 66
c. Payroll clerk hired one week ago
d. Governor of the state of Florida
e. Secretary employed by a notforprofit corporation
Which of the following payments are not taxable for FICA?
a. Backpay awards.
b. Wage supplements to cover difference between employees’ salaries and their military
pay.
c. Severance pay.
d. Difference between employees’ regular wages and the amount received for jury duty.
e. Retroactive wage increase.
If a company is liable for a credit reduction (due to Title XII advance), this extra tax
must be paid along with each of the required deposits made during the year.
a. True
b. False
If the third decimal place is less than 5, drop the third decimal place.
Also, use the minimum hourly wage of $7.25 in solving these problems and all that
follow.
Refer to Instruction 31. Jax Company’s (a monthly depositor) tax liability (amount
withheld from employees’ wages for federal income tax and FICA tax plus the
company’s portion of the FICA tax) for July was $1,210. No deposit was made by the
company until August 24, 20. Determine:
a)The date by which the deposit should have been made
b)The penalty for failure to make timely deposit
c)The penalty for failure to fully pay tax when due
d)The interest on taxes due and unpaid (assume a 4% interest rate)
Form W3 is filed with the Social Security Administration when transmitting
information returns on Forms W2.
a. True
b. False
HTMLENTITY#8203HTMLENTITYWhich of the following is used to provide a
continuous record of the relationship between employer and employee?
a. HTMLENTITY#8203HTMLENTITYChange in payroll rate form
b. HTMLENTITY#8203HTMLENTITYEmployee history record
c. HTMLENTITY#8203HTMLENTITYHiring notice
d. HTMLENTITY#8203HTMLENTITYEmployee’s earnings record
e. HTMLENTITY#8203HTMLENTITYNone of the above
An employer’s social security and withheld income taxes for the quarter are less than
$2,500. The employer must deposit the taxes at its bank at the time of filing the fourth
quarter Form 941.
a. True
b. False
The FLSA imposes no recordkeeping requirements on employers.
a. True
b. False
If employees must contribute to the state unemployment fund, this deduction should be
shown in the payroll tax entry.
a. True
b. False
In computing their own FICA taxes, employers may exclude the total amount of tips
reported to them by their tipped employees.
a. True
b. False
In order for the WalshHealey Public Contracts Act to protect laborers for contractors
who furnish materials to any agency of the United States, the contract amount must be
at least $10,000.
a. True
b. False
Employer payments made directly to employees in lieu of health insurance coverage are
taxable wages.
a. True
b. False
The adjusting entry to record the accrued vacation pay at the end of an accounting
period includes credits to the tax withholding liability accounts.
a. True
b. False
Instruction 51
Use the net FUTA tax rate of 0.6% on the first $7,000 of taxable wages.
Refer to Instruction 51. Ted Carman worked for Rivertide Country Club and earned
$28,500 during the year. He also worked part time for Harrison Furniture Company and
earned $12,400 during the year. The SUTA tax rate for Rivertide Country Club is 4.2%
on the first $8,000, and the rate for Harrison Furniture Company is 5.1% on the first
$8,000. Calculate the FUTA and SUTA taxes paid by the employers on Carman’s
earnings.
FUTASUTA
a.Riverside___________________________
b.Harrison Furniture Company___________________________
FICA excludes from coverage all of the following kinds of employment except:
a. domestic service performed in a college sorority by a student.
b. service performed by a 16yearold child in the employ of the mother.
c. babysitting service performed by a 35yearold person who receives $40 in cash during
the calendar quarter.
d. federal government secretaries hired in 1990.
e. services performed by a railroad worker for an employer covered by the Railroad
Retirement Tax Act.
Under no conditions may children under age 16 be employed in food service
establishments.
a. True
b. False
The amount of federal income taxes to be withheld is determined after subtracting from
the employee’s gross wages any local and state taxes.
a. True
b. False
A payroll register lists all employees who have earned remuneration, the amount of
remuneration, the deductions, and the net amount paid for each pay period.
a. True
b. False
Peter, age 17 and employed by his familyowned corporation, is covered under FICA.
a. True
b. False
Persons eligible for deductible IRA contributions may put aside a specified amount of
their compensation without paying federal income taxes on that amount.
a. True
b. False
Which of the following deposit requirements pertains to a semiweekly depositor who
has accumulated employment taxes of $17,500 on payday, Saturday, May 16, 20?
a. No deposit is required until May 18, the next banking day.
b. The undeposited taxes should be carried over to the next payday on May 23.
c. The taxes must be deposited on or before Tuesday, May 19.
d. The taxes must be deposited on or before Friday, May 22.
e. None of the above.
Form 940 must be mailed to the IRS by January 15.
a. True
b. False
Ashe, an employer, has made timely deposits of FICA taxes and withheld income taxes
during the first quarter of 2018. The latest date on which Ashe may file Form 941 is:
a. April 10.
b. April 30.
c. May 1.
d. May 10.
e. May 15.
Only one state has passed a law to provide disability benefits to employees absent from
their jobs due to illness, accident, or disease not arising out of their employment.
a. True
b. False