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 session takes place outside the regular working hours.
e. the session is not directly related to the employees work.
Which of the following is not an expense of the employer?
a. FUTA tax
b. FICA taxHI
c. FICA taxOASDI
d. SUTA tax
e. Union dues withheld
Which of the following deposit requirements pertains to a nonagricultural employer
who has employer FICA taxes and withheld employee FICA taxes and income taxes of
$125,000 at the end of payday on Friday, August 14, 20–?
a. No deposit is required until Tuesday, August 18.
b. The taxes must be deposited by the close of the next banking day.
c. The taxes must be deposited on or before August 31.
d. The undeposited taxes should be carried over to the end of September.
e. None of the above.
The payroll taxes incurred by an employer are FICA, FUTA, and SUTA.
In order to avoid a credit reduction for Title XII advances, a state must repay the loans
by:
a. the end of the year of the loans.
b. the end of the year the credit reduction is scheduled to take effect.
c. the end of the third year after the year of the loans.
d. November 10 of the year the credit reduction is scheduled to take effect.
e. June 30 of the year after the loans.
Payments made to a workers spouse for hospital expenses in connection with an
accident disability are not considered wages under FICA.
Which of the following provides for a reduction in the employers state unemployment
tax rate based on the employers experience with the risk of unemployment?
a. Voluntary contribution
b. Title XII advances
c. Pooled-fund laws
d. Experience-rating plan
e. None of the above
Which of the following items would require an adjusting entry at the end of each
accounting period?
a. Garnishment for child support payments
b. Withholdings for a 401(k) plan
c. Vacation pay earned by employees
d. Union dues withheld
e. None of the above
Which of the following deposit requirements pertains to a monthly depositor who has
accumulated employment taxes of $2,900 at the end of October?
a. No deposit is required.
b. The undeposited taxes should be carried over to the end of November.
c. The taxes must be deposited on or before November 15.
d. The taxes must be deposited on or before the next banking day.
e. None of the above.
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.
Peter, age 17 and employed by his family-owned corporation, is covered under FICA.
Of the two main methods of withholding, only the wage-bracket method distinguishes
unmarried persons from married persons.
All taxable noncash fringe benefits received during the year can only be added to the
employees taxable pay on the last payday of the year.
Nonagricultural employers who withhold income taxes and are liable for social security
taxes must file a monthly tax and information return.
An employer can credit up to $5.12 of a tipped employees minimum wage as coming
from the tips received by that employee.
NOTE: In the following problems, use the net FUTA tax rate of 0.6% on the first
$7,000 of taxable wages.
Faruga Company had FUTA taxable payrolls for the four quarters of 2015 of $28,400;
$19,600; $16,500; and $8,900, respectively. The company was located in a state that
was subject to a FUTA credit reduction of 0.3%. What was the amount of Farugas first
required deposit of FUTA taxes?
A discretionary bonus is included in an employees regular rate of pay.
Even if a state repays its Title XII advances, all employers in that state are subject to a
credit reduction in the year of the advance.
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 to 2 decimal places before multiplying by one
and one-half to determine the overtime rate).
2) If the third decimal place is 5 or more, round to the next higher cent.
3) 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. Fall is
paid a biweekly salary of $937.50. Overtime is paid for hours beyond 40 in each
workweek. One week, Fall works 3 hours overtime.
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.
Only six states do not impose a state unemployment tax on employers in their state.
The Self-Employment Contributions Act imposes a tax on the net earnings from
self-employment derived by an individual from any trade or business.
The Social Security Act ordered every state to set up an unemployment compensation
program.
If an employee, who works two or more separate jobs, pays OASDI taxes on wages in
excess of the taxable wage base, the employee is entitled to a refund of the
overpayment.
FUTA and SUTA coverages extend to U.S. citizens working abroad for American
employers.
If an employee has more than one employer during the current year, the taxable wage
base applies separately to each of those employers, unless one employer has transferred
the business to the second.