A) $1,027.86 B) $680.70 C) $1,375.02 D) $746.50 E) $962.06
90)
The annual Federal Unemployment Tax Return is:
A)
Form W-4.
B)
Form W-2.
C)
Form 104.
D)
Form 940.
E)
Form 1099.
91)
The Wage and Tax Statement given to each employee annually is:
A)
Form W-4.
B)
Form 1040.
C)
Form W-2.
D)
Form 941.
E)
Form 940.
92)
A bank that is authorized to accept deposits of amounts payable to the federal government is a:
A)
Federal Reserve Bank.
B)
Federal depository bank.
C)
National bank.
D)
FDIC insured bank.
E)
Credit union.
93)
An employer’s federal unemployment taxes (FUTA) are reported:
A)
Semiannually.
B)
Annually.
C)
Monthly.
D)
Weekly.
E)
Quarterly.
94)
The rate that a state assigns reflecting a company’s stability or instability in employing workers is
the:
A)
Pay rate.
B)
Tax withholding rate.
C)
FICA rate.
D)
Credit rating.
E)
Merit rating.
95)
Employer payroll taxes:
A)
Are payable for up to a maximum $117,000 of employee earnings.
B)
Are paid by the employee.
C)
Are added expenses beyond that for the wages and salaries earned by employees.
D)
Represent the social security taxes withheld from employees.
E)
Represent the federal taxes withheld from employees.
96)
All of the following are employer payroll taxes except:
A)
Federal income tax equal to that withheld from employees.
B)
Medicare tax equal to that withheld from employees.
C)
State unemployment tax.
D)
Social Security tax equal to that withheld from employees.
E)
Federal unemployment tax.
97)
FUTA taxes are:
A)
Social Security taxes.
B)
Employee income taxes.
C)
Medicare taxes.
D)
Unemployment taxes.
E)
Employee deductions.
98)
Which of the following is not true regarding the unemployment insurance program?
A)
It provides unemployment benefits to qualified workers.
B)
It adjusts rates paid by employers based on their merit rating.
C)
It is administered by each state.
D)
It requires withholding from the employee wages.
E)
It is a joint federal and state program.
99)
The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both taxes are applied to the
first $7,000 of an employee’s pay. Assume that an employee earned total wages of $9,900. What is
the amount of total unemployment taxes the employer must pay on this employee’s wages?
A) $534.60. B) $594.00. C) $0.00. D) $420.00. E) $336.00.
100)
The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both taxes are applied to the
first $7,000 of an employee’s pay. Assume that an employee earned total wages of $2,900 in the
current period and had cumulative pay for prior periods of $5,800. What is the amount of
unemployment taxes the employer must pay on this employee’s wages for the current period?
A) $174.00. B) $0.00. C) $348.00. D) $420.00. E) $72.00.
101)
An employee earned $43,300 working for an employer in the current year. The current rate for
FICA Social Security is 6.2% payable on earnings up to $118,500 maximum per year and the rate
for FICA Medicare 1.45%. The employer’s total FICA payroll tax for this employee is:
A) $3,312.45.
B) $5,638.05.
C) $8,950.50.
D) $2,684.60.
E) $0, since the FICA tax is only deducted from an employee’s pay.
102)
An employee earned $128,500 working for an employer in the current year. The current rate for
FICA Social Security is 6.2% payable on earnings up to $118,500 maximum per year and the rate
for FICA Medicare 1.45% of all earnings. The employer’s total FICA payroll tax for this employee
is:
A) $9,210.25.
B) $9,830.25.
C) $8,950.50.
D) $879.75.
E)
$0, since the FICA tax is only deducted from an employee’s pay.
103)
An employee earned $62,500 during the year working for an employer. The FICA tax rate for
Social Security is 6.2% of the first $118,500 of employee earnings per calendar year and the FICA
tax rate for Medicare is 1.45% of all earnings. The current FUTA tax rate is 0.6%, and the SUTA
tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee’s pay.
What is the amount of total unemployment taxes the employee must pay?
A) $434.00 B) $56.00 C) $378.00 D) $0.00 E) $101.50
104)
Gary Marks is paid on a monthly basis. For the month of January of the current year, he earned a
total of $8,288. FICA tax for Social Security is 6.2% on the first $118,500 of earnings each
calendar year and the FICA tax for Medicare is 1.45% of all earnings. The FUTA tax rate is 0.6%,
and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an
employee’s pay. The amount of Federal Income Tax withheld from his earnings was $1,375.17.
What is the amount of the employer’s payroll taxes expenses for this employee? (Round your
intermediate calculations to two decimal places.)
A) $420.00 B) $2,009.21 C) $2,506.48 D) $1,131.31 E) $1,054.04
50
105)
Triston Vale is paid on a monthly basis. For the month of January of the current year, he earned a
total of $5,210. FICA tax for Social Security is 6.2% on the first $118,500 of earnings each
calendar year and the FICA tax for Medicare is 1.45% of all earnings. The FUTA tax rate is 0.6%,
and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an
employee’s pay. The amount of Federal Income Tax withheld from his earnings was $885.70. What
is the amount of the employer’s payroll taxes expenses for this employee?
A) $1,284.27 B) $398.57 C) $711.17 D) $312.60 E) $1,596.87
106)
An estimated liability:
A)
Is a liability that may occur if a future event occurs.
B)
Is not recorded until the amount is known for certain.
C)
Can be the result of a lawsuit.
D)
Is an unknown liability of a certain amount.
E)
Is a known obligation of an uncertain amount that can be reasonably estimated.
107)
Estimated liabilities commonly arise from all of the following except:
A)
Vacation benefits.
B)
Warranties.
C)
Income taxes.
D)
Employee benefits.
E)
Unearned revenues.
108)
Employees earn vacation pay at the rate of one day per month. During the month of July, 25
employees qualify for one vacation day each. Their average daily wage is $100 per day. What is the
amount of vacation benefit expense to be recorded for the month of July?
A) $25,000 B) $250 C) $2,500 D) $25 E) $100
109)
Employees earn vacation pay at the rate of one day per month. During the month of June, 10
employees qualify for one vacation day each. Their average daily wage is $150 per day. Which of
the following is the necessary adjusting journal entry to record the June vacation benefits?
A)
Debit Payroll Tax Expense $1,500; credit Payroll Taxes Payable $1,500.
B)
Debit Prepaid Vacation Benefits $1,500; credit Vacation Benefits Payable $1,500.
C)
Debit Vacation Benefits Expense $1,500; credit Vacation Benefits Payable $1,500.
D)
Debit Vacation Benefits Payable; credit Vacation Benefits Expense $1,500.
E)
Debit Vacation Benefits Expense $1,500; credit Prepaid Vacation Benefits $1,500.
110)
Employee vacation benefits:
A)
Increase net income.
B)
Are recorded as an expense when the employee retires.
C)
Are estimated liabilities.
D)
Are contingent liabilities.
E)
Are recorded as an expense when the employee takes a vacation.
111)
A company sold $12,000 worth of bicycles with an extended warranty. The company’s experience
is that warranty expense averages 2% of sales. The company should:
A)
Consider the warranty expense a remote liability since the rate is only 2%.
B)
Recognize warranty expense and liability in the year of the sale.
C)
Consider the warranty expense a contingent liability.
D)
Recognize warranty expense at the time the warranty work is performed.
E)
Recognize warranty liability when the company purchases the bicycles.
112)
A company sold $12,000 worth of bicycles with an extended warranty. The company’s experience
is that warranty expense averages 2% of sales. The current period’s entry to record the warranty
expense is:
A)
Debit Prepaid Warranties $240; credit Warranty Expense $240.
B)
Debit Sales Allowances $240; credit Estimated Warranty Liability $240.
C)
Debit Estimated Warranty Liability $240; credit Cash $240.
D)
Debit Warranty Expense $240; credit Cash $240.
E)
Debit Warranty Expense $240; credit Estimated Warranty Liability $240.
113)
The deferred income tax liability:
A)
Is a contingent liability.
B)
Can result in a deferred income tax asset.
C)
Is recorded whether or not the difference between taxable income and financial accounting
income is permanent or temporary.
D)
Is never recorded.
E)
Results from the income tax expense reported on the income statement differing from the
amount of income taxes payable to the government.
114)
A company estimates that warranty expense will be 4% of sales. The company’s sales for the
current period are $185,000. The current period’s entry to record the warranty expense is:
A)
Debit Estimated Warranty Liability $7,400; credit Warranty Expense $7,400
B)
Debit Warranty Expense $7,400; credit Sales $7,400.
C)
Debit Warranty Expense $7,400; credit Estimated Warranty Liability $7,400.
D)
Debit Estimated Warranty Liability $7,400; credit Cash $7,400.
E)
No entry is recorded until the items are returned for warranty repairs.
115)
A company has a selling price of $1,800 each for its printers. Each printer has a 2 year warranty
that covers replacement of defective parts. It is estimated that 2% of all printers sold will be
returned under the warranty at an average cost of $150 each. During November, the company sold
30,000 printers, and 400 printers were serviced under the warranty at a total cost of $55,000. The
balance in the Estimated Warranty Liability account at November 1 was $29,000. What is the
company’s warranty expense for the month of November?
A) $60,000 B) $55,000 C) $45,000 D) $26,000 E) $90,000
116)
Springfield Company offers a bonus plan to its employees and the amount of the employee bonuses
for the current year is estimated to be $32,500 to be paid during January of the following year. The
journal entry on December 31 to record the bonuses is:
A)
Debit Unearned Bonuses $32,500; credit Bonus Payable $32,500.
B)
No entry since the bonuses are not paid until January.
C)
Debit Employee Bonus Expense $32,500; credit Prepaid Employee Bonus $32,500.
D)
Debit Estimated Bonus Payable $32,500; credit Cash $32,500.
E)
Debit Employee Bonus Expense $32,500; credit Bonus Payable $32,500.
117)
A payroll register does not include:
A)
Hours worked.
B)
Deductions.
C)
Pay period dates.
D)
Prior year’s earnings
E)
Gross pay and net pay.
118)
The wage bracket withholding table is used to:
A)
Compute Medicare withholding.
B)
Compute unemployment taxes.
C)
Prepare the W-4.
D)
Compute social security withholding.
E)
Compute federal income tax withholding.
119)
A table that shows the amount of federal income tax to be withheld from an employee’s pay is the:
A)
W-4.
B)
Form 941.
C)
Wage bracket withholding table.
D)
W-2.
E)
Tax table.
120)
Companies may use a special bank account solely for the purpose of paying employees, by
depositing an amount equal to the total employees’ net pay into the account each pay period and
drawing the employees’ payroll checks on the account. This account is a(n):
A)
Payroll bank account.
B)
Federal depository bank account.
C)
Employee’s Individual Earnings account.
D)
Payroll register account.
E)
Employees’ bank account.
121)
If a company uses a special payroll bank account:
A)
There is no need to issue W-2‘s.
B)
The company does not need to issue paychecks.
C)
The company draws one check for the entire payroll on the regular bank account and deposits
it in the payroll bank account.
D)
The company must use a federal depository bank for the payroll bank account.
E)
There is no need for a payroll register.