All states have set their minimum wage to be the same as the federal government.
a. True
b. False
An employer must file an information return under all of the following conditions
except:
a. to report $1,000 of compensation paid to an individual who is not an employee.
b. to report the wages totaling $600 paid to an independent contractor during the
calendar year.
c. to report dividends totaling $600 paid to an individual during the calendar year.
d. to report commissions of $500 paid to a selfemployed salesman.
e. An information return must be filed under each of the above conditions.
The FLSA requires that:
a. employers use time cards to record the employees’ time worked.
b. employers use the continental time system to record all time worked by employees.
c. employers keep records that show the hours each employee worked each workday
and each workweek.
d. employees sign each clock card.
e. none of the above.
Christmas gifts, excluding noncash gifts of nominal value, are taxable wages for
unemployment purposes.
a. True
b. False
Since notforprofit corporations are exempt from federal income taxes, they are not
defined as employers under the federal income tax withholding law.
a. True
b. False
Training sessions are counted as working time when the following condition is met:
a. the employee’s attendance is voluntary.
b. the employer requires the employee’s 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 employee’s work.
Title VII of the Civil Rights Act protects all employees from arbitrary dismissal.
a. True
b. False
In the case of a 401(k) plan, employees age 50 or over can shelter an extra $10,000 of
their wages from federal income tax.
a. True
b. False
HTMLENTITY#8203HTMLENTITYForm I9 Employment Eligibility Verification, is
required due to which of the following acts:
a. HTMLENTITY#8203HTMLENTITYImmigration Reform and Control Act of 1986
b. HTMLENTITY#8203HTMLENTITYCivil Rights Act of 1964
c. HTMLENTITY#8203HTMLENTITYAge Discrimination in Employment Act
d. HTMLENTITY#8203HTMLENTITYAmericans with Disabilities Act
e. HTMLENTITY#8203HTMLENTITYNone of the above
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.
On August 1, Hunt filed an amended Form W4 to show a decrease in the number of
allowances claimed. Hunt’s employer must put the new withholding allowance
certificate into effect before the next weekly payday on August 3.
a. True
b. False
Companies usually provide a separate column in the payroll register to record the
employer’s payroll taxes.
a. True
b. False
When employees spend time changing clothes on the employer’s premises, this time
must be counted as part of their principal activities for which they are always fully
compensated.
a. True
b. False
When recording the deposit of FUTA taxes owed, the proper entry is:
a. FUTA Tax Expense
Cash
b. Payroll Taxes
Cash
c. Payroll Taxes
FUTA Taxes Payable
d. FUTA Taxes Payable
Cash
e. FUTA Tax Expense
FUTA Taxes Payable
If married employees do not claim their marital status on Form W4, the employer must
withhold according to the withholding tables for single employees.
a. True
b. False
The payroll taxes account is an expense account that is debited for the FICA, FUTA,
and SUTA taxes on the employer.
a. True
b. False
In January 2018, workers who receive the minimum hourly wage are paid $6.10 an
hour.
a. True
b. False
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. True
b. False
Beech refuses to state her marital status on Form W4 which she gave to you, the payroll
manager, when she was hired. You should:
a. tell Beech that it is OK since you know that she was recently divorced and is
reluctant to talk about it.
b. inform Beech that she will have to write the IRS and give her reasons for refusing to
state her marital status.
c. tell Beech that you will have to withhold income taxes as if she were married and had
claimed one allowance.
d. tell Beech that you will have to withhold income taxes according to the withholding
table for a single employee with no allowances.
e. advise Beech to write “It is no business of yours.” in the margin of her Form W4.
Under the Equal Pay Act:
a. employers must pay a married male a higher wage rate than a single female if both
are performing equal work.
b. whitecollar workers are exempt from its requirements.
c. wage differentials based on a seniority system are allowed.
d. if there is an unlawful pay differential, employers may reduce the higher rate to equal
the lower rate.
e. none of the above.
Payments made to a worker’s spouse for hospital expenses in connection with an
accident disability are not considered wages under FICA.
a. True
b. False
The Affordable Care Act defines applicable large employers (ALEs) as employers with:
a. 15 or more fulltime employees during the previous year.
b. 1 or more fulltime employees during the previous year.
c. 200 or more fulltime employees during the previous year.
d. 50 or more fulltime employees during the previous year.
e. 200 or more full and parttime employees during the previous year.
Directors of corporations who only attend and participate in board of directors’
meetings are not covered as employees under FUTA.
a. True
b. False
HTMLENTITY#8203HTMLENTITYWhat tax act levies a tax on employers to pay
state and federal administrative expenses of the unemployment program?
a. HTMLENTITY#8203HTMLENTITYFederal Income Tax Act
b. HTMLENTITY#8203HTMLENTITYFederal Unemployment Tax Act
c. HTMLENTITY#8203HTMLENTITYFederal Wage and Hour Law
d. HTMLENTITY#8203HTMLENTITYEstate Unemployment Tax Acts
e. Workers’ Compensation Laws
The withholding of federal income and FICA taxes from a tipped employee is made
from the employee’s wages that are under the employer’s control.
a. True
b. False
In the adjusting entry to accrue wages at the end of the accounting period, there is no
need to credit any tax withholding accounts.
a. True
b. False
The employees of a semiweekly depositor are paid every Tuesday. The accumulated
payroll taxes must be deposited on or before the following Friday.
a. True
b. False
To curb the practice of employees filing false Forms W4, the IRS requires that an
employer submit to the agency a copy of each Form W4:
a. the IRS has requested in writing.
b. on which an employee, usually earning $180 each week at the time Form W4 was
filed, now claims to be exempt from withholding.
c. on which an employee claims to be single but has 9 withholding allowances.
d. on which a married employee claims no withholding allowances.
e. on which a recently divorced employee claims 5 withholding allowances and
authorizes an additional $10 to be withheld each week.
If an employer pays unemployment taxes to two states, it will have the same SUTA tax
rate in both states.
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. Michael Mirer worked for Dawson Company for six months
this year and earned $11,200. The other six months he earned $6,900 working for
McBride Company (a separate company). The amount of FUTA taxes to be paid on
Mirer’s wages by the two companies is:
a)Dawson Company __________.
b)McBride Company __________.
The Fair Labor Standards Act is commonly known as the Federal Wage and Hour Law.
a. True
b. False
Which of these accounts shows the total gross earnings that the employer incurs as an
expense each payday?
a. Payroll Taxes
b. Federal Income Taxes Payable
c. Wages Expense
d. Salaries Payable
e. None of the above
The Affordable Care Act does not make a distinction between large and small
employers.
a. True
b. False
Employees who are receiving remedial education may work up to 10 hours overtime
each week without receiving overtime pay.
a. True
b. False